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

Legal entities are also subject to the penalty set out in Article 131-39-2 of the Criminal Code, introduced by the Sapin II Law , which requires them to submit, for a maximum period of five years, to a compliance program to be monitored and implemented by the AFA. This penalty is a way to force legal entities that have committed acts of corruption to put in place internal mechanisms to prevent such acts from happening again.

The compliance sanction is intended to apply to both public and private entities, irrespective of their size, legal form, sector of activity or nationality. The scope of this penalty is thus not restricted to the perimeter of Article 17 of the Sapin II Law, i.e. only to undertakings with at least five hundred employees, or belonging to a group of companies whose parent company has its registered office in France and whose workforce comprises at least five hundred employees, and whose sales or consolidated sales exceed EUR 100 million. Unlike the obligation to comply prescribed by the latter text, this sanction constitutes a penalty stricto sensu, issued by the criminal court and punishing the commission of the offense of corruption.

The offenses concerned are active corruption of French public officials committed by private individuals under Article 433-1 of the Criminal Code, active corruption of foreign public officials or officials of a public international organization under Article 435-3, and active and passive bribery of private individuals not holding a public office under Articles 445-1 and 445-2 of the Criminal Code .

While Article 131-39-2 of the Criminal Code caps the duration of the compliance sanction at five years, a circular dated 31 January 2018  specifies that it can be terminated early, by a reasoned decision of the sentence enforcement judge, acting on a request from the public prosecutor, when three conditions are cumulatively met: the sentence has been served for at least one year, reports sent to the public prosecutor show that the convicted legal entity has taken appropriate measures and procedures to prevent and detect the commission of acts of corruption, and no further monitoring appears necessary.

Furthermore, Article 764-44(1) of the Code of Criminal Procedure stipulates that AFA is required to send a report to the public prosecutor once the time-limit for implementing the measure has expired. Failure to carry out or properly carry out this compliance sanction, which is assessed, when the sentence has been handed down against a company falling within the scope of Article 17 of the Sapin II Law, in the light of the measures and procedures already implemented in application of this law, constitutes a new offense, provided for in Article 434-43-1 of the Criminal Code, which punishes both the legal entity convicted and its bodies or representatives who are natural persons. According to this article, individuals can face up to two years' imprisonment and a fine of EUR 50,000. Legal entities are also liable to this fine, which may be increased to the amount of the fine incurred for the offense for which they were convicted and which gave rise to the compliance sanction, as well as any other sanctions imposed. Both individuals and corporate bodies are liable to the additional sanction of posting or making public the ruling .

Law No 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernization of economic life, known as the Sapin II Law, Art. 18.

Criminal Code, Art. 433-26, 435-15 and 445-4.

Circular from the Directorate of Criminal Affairs and Pardons on the presentation and implementation of the criminal provisions set out in Law 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernization of economic life CRIM/2018-01/G3 of 31 January 2018.

Penalty overseen by French Anti-corruption Agency (Agence française anticorruption - AFA)

15. Penalty overseen by French Anti-corruption Agency (Agence française anticorruption - AFA)