On Tuesday, November 8, 2016 France passed its new anti-corruption legislation, to improve its commitment to business ethics, the prevention of fraud and prohibiting the bribery of foreign public official. The new anti-corruption law, which has taken over a year to revise and implement, is intended to reach the same standards and levels of enforcement as the United Kingdom’s Bribery Act (“BA”) and the American Foreign Corrupt Practices Act (“FCPA”). The most interesting aspect of the new law is that it permits corporate defendants to enter into negotiated resolutions, in a form that is commonly known as Deferred Prosecution Agreements (“DPAs”).
France has long been criticized for its weak anti-corruption law and enforcement activities. The Organization for Economic Cooperation and Development (“OECD”) working group on bribery said recently that about 24 new corruption cases were opened in the past two years by French authorities yet no French corporation had been convicted of any foreign bribery offence. In 2014, however, the United States Department of Justice (“DOJ”) secured three of the ten biggest Foreign Corrupt Practices Act (“FCPA”) enforcement actions against French companies by means of DPAs. French corporate giants Alston paid $772 million, Total SA, paid $398 million and Technip SA, paid $338 million. France is the only country whose corporations have appeared on the DOJ’s FCPA top ten list, three times.
New French law introduced DPAs with a view to securing a more expeditious and just resolution to corruption investigations and charges. The French DPA system has followed the lead of the United Kingdom, under the BA, as enforced by the Serious Fraud Office (“SFO”) requiring all DPAs to be approved in a public hearing, under statutory authority, in front of a French judge. This is intended to enhance openness, transparency, and maximum motivation for French corporations and executives to comply with the anti-corruption law.
The French law also establishes a new anti-corruption agency (“Agence française anticorruption“, the “Agency”) under the authority of the French Minister of Justice and Minister of Budget, tasked with the mission of aiding the competent authorities to prevent and detect acts of corruption, influence peddling, extortion, misappropriation of public funds, and other related misconduct. Similar to the DOJ in the United States, France’s new Agency will review the quality and effectiveness of companies’ anti-corruption programs and will exercise investigative powers to request documentation as part of its review. The Agency will also publish information relating to the prevention and detection of corruption, and issue an annual report describing its activities.
Further, the new French law provides for whistle blower protection, to ensure that those who report corruption activity to French authorities are not punished or dismissed from their employment. The provisions of the new legislation, also provide for penalties for corporations if they are convicted. Monetary penalty may be up to 30% of the company’s annual revenue. With this type of large penalty, French authorities contemplate that increased anti-corruption policies, training, and compliance will take place by French corporations and corporate executives, who may now be exposed to these enforcement measures.
Canada continues to be one of a small and shrinking group of members of the OECD who have not established, either through legislation or regulatory policies, a DPA system. It remains to be seen if the new Liberal government of Justin Trudeau will change the Corruption of Foreign Public Officials Act and introduce a process for DPAs.