Introduction

Scope of application

Compliance program

Protection of whistleblowers

Audit and sanctions

Rules arising from the Sapin II Law

EU law

French law

Rules derived from competition law

Sapin II Law/Competition

Scope ratione personae

Scope ratione materiae

Scope

Development of plan

Measures included in plan

Inclusion in management report

Vigilance plan

Injunctions

Civil liability

Sanctions

Duty of vigilance (devoir de vigilance)

CSR programs

Reporting

Communication

Reporting and communication

Judicial sanctions

Risk to reputation, strategy and stability

Corporate Social Responsability (CSR)

Middlenext Code

IFA Corpus

AFEP - MEDEF Code

Types

Principles of governance

Principles incorporating CSR values

Principles

Comply or explain

Binding force

Private codes of conduct

Compliance

Compliance, which traditionally refers to a company's ability to adhere strictly to the regulatory standards applicable to it, today also reflects its ability to adopt a proactive approach by putting in place a set of measures and processes enabling it to detect possible and potential breaches of the rules, and above all, to prevent both the criminal risk and the potential financial and reputational damage to which it may be exposed. While, historically, compliance may have been perceived by businesses as an administrative constraint, recent national and international financial, environmental and ethical scandals have highlighted the serious consequences of non-compliance.

The origins of compliance lie in the Foreign Corrupt Practice Act (FCPA), adopted in the United States in 1977 to combat influence peddling of foreign government officials, and in the UK Bribery Act (UKBA) adopted in the UK in 2010, which criminalizes several forms of corruption, as well as failures by commercial organizations to tackle influence peddling. In France, the Sapin II Law  of 9 December 2016  is the founding legislation in this area. It imposes an obligation to adopt an anti-corruption compliance program on large undertakings employing at least 500 employees, or belonging to a group of companies of which the parent company is headquartered in France, with a workforce of the same size, and generating over EUR 100 million in sales or consolidated sales, on penalty of incurring heavy financial penalties. The compliance system, which is intended to prevent and detect corruption and influence peddling (bribery) in France and abroad, includes risk mapping, a code of conduct, an internal alert system, and procedures for assessing the situation of both customers and suppliers, a disciplinary procedure to ensure compliance with the code of conduct, and a system for the internal monitoring and evaluation of the measures implemented.

The Sapin II Law created the French Anti-corruption Agency (Agence française anticorruption  - AFA), a national body charged by the government with overseeing the compliance programs set up by undertakings and public bodies under its Article 17. The AFA has its own Sanctions Committee, which by law has the exclusive power to impose sanctions in the event of non-adherence to compliance measures. It can issue warnings, injunctions or financial penalties to the offending entity. According to its latest published activity report , in 2022, it carried out 36 own-initiative inspections, eighteen of which concerned undertakings subject to the third paragraph of Article 17 of the Law, with sales ranging from EUR 434 million to EUR 81 billion and a workforce of between 800 and 300,000 employees, 10 of which were French subsidiaries of foreign groups.

The requirement for compliance is not confined to anti-corruption issues: today, it permeates all sectors of activity and many branches of law, such as competition law. In effect, compliance with competition rules not only promotes fair competition and a healthy market economy that benefits all stakeholders, but also optimizes the management of financial and reputational risks. Both the European Commission  and the French Competition Authority  strongly encourage undertakings to set up a competition law compliance program, either on their own or as part of a general compliance policy. While these regulatory authorities have undoubtedly endeavored in recent years, through the publication of reports and recommendations, to provide undertakings with the best possible guidance in setting up such systems, compliance remains a complex and costly process, requiring the mobilization of vast human and financial resources on the part of undertakings. Nevertheless, it needs to be recognized that compliance is not just about avoiding legal sanctions, and that it represents an opportunity to strengthen corporate culture, improve organizational performance and contribute to a more transparent and responsible business environment. Adopting a proactive approach to compliance can, ultimately, be a powerful driver in terms of performance, competitiveness and growth.

Law 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernization of economic life, OJ 0287 of 10 December 2016.

EU Commission guidance: Compliance Matters - What Companies can do Better to Respect EU Competition

French Competition Authority, Framework document of 24 May 2022 on competition compliance programs.

Corporate compliance

5. Corporate compliance