Over the past twenty years this, the first international anti-corruption instrument, has been followed by the introduction of corresponding legislation in many countries.
The recent surge in new anti-corruption legislation and regulatory compliance, combined with the extraterritorial application of existing foreign laws (FCPA, UKBA, French Sapin 2 law), provides the incentive managers need to make (compliance a cornerstone of good corporate governance, failing which they are likely to expose their company, its employees and themselves to civil or criminal proceedings in France and/or abroad.
A conviction for bribery of a foreign public official in the United States, the UK, France or elsewhere can result in severe penalties (imprisonment, monetary sanctions and exclusion from public procurement).
On November 8, 2016, France modernized its anti-corruption enforcement regime and adopted the Law on Transparency, the Fight against Corruption and the Modernization of Economic Life (known in France as the “Sapin 2 Law,” named after Michel Sapin, the former finance minister).
The Sapin 2 Law became effective on November 10, 2016. Pursuant to this law, companies with over 500 employees – or belonging to a group with at least 500 employees – and with a turnover of at least €100 million, are required to adopt compliance policies and procedures. As a result, executives can now be held liable in the event of their company’s failure to comply with the law.
The main provisions of the Sapin 2 Law include:
- Mandatory compliance programs for companies with over 500 employees and €100 million in revenue
- Creation of a new anti-corruption agency (the French Anti-Corruption Agency (AFA)) to monitor corporate implementation of the now-mandatory anti-corruption compliance programs
- Deferred prosecution agreements, similar to those used by the DOJ, allowing prosecutors to fine companies for wrongdoing without a criminal conviction
- Introduction of prosecution agreements, i.e. the Judicial Public Interest Agreement (CONVENTION JUDICIAIRE D’INTÉRÊT PUBLIC – CJIP)
The Sapin 2 Law institutes preventive measures, similar to the American and British statutory provisions (FCPA, UKBA), to strengthen the government’s arsenal of anti-corruption tools. It complies with the OECD Convention on Combating Bribery of Foreign Public Officials and should be applied in light of the standards set by ISO 37001 on anti-bribery management systems.
The French Anti-Corruption Agency (AFA), an innovation of the Sapin 2 Law, issued eight “recommendations” for action that companies must implement:
- a risk mapping
- an ethics code and an anti-corruption code of conduct
- an internal whistleblowing mechanism
- risk assessment mechanisms
- third-party Due Diligence processes
- accounting control procedures
- employee training on corruption risks
- reporting chains and procedures for internal reporting of suspected illicit activity
If companies fail to meet these compliance “recommendations,” the AFA’s Sanctions Commission can impose fines, per breach, of up to €200,000 on individuals and €1 million on entities and issue warnings or injunctions ordering companies to adopt adequate compliance programs and publish the decisions.
