Introduction

Matrix organization

Mergers by absorption

Risks related to the expansion of the scope of criminal liability of legal entities

Validity conditions

Proof of delegation

Exemption from individual liability of delegator

Attribution of offense to legal entity

Delegations of authority

Criminal risk management within business organizations

Complicity in crimes against humanity

Breaches of secrecy

Personal data breaches

Theft

Extortion

Blackmail

Fraud

Misappropriation

Receiving/concealment of unlawfully obtained property (recel)

Attacks on automated data processing systems

Money laundering

Misappropriation by public official (concussion)

Corruption and influence peddling

Unlawful acquisition of an interest

Favoritism

Forgery and use of forgeries

Violation of Criminal Code

Offenses under the Monetary and Financial Code

Offenses under the Commercial Code

Environmental Code violations

Offenses arising from other codes

Types of offenses

Offenses under the Criminal Code, the Commercial Code, or the Environmental Code, Criminal procedure

White Collar Crime (en cours)

The expansion of commercial, economic, and financial activity during the 20th century, accompanied by growing economic and financial delinquency, gave rise to an economic public policy , the result of a state-driven, interventionist approach to regulate business life. Criminalization was chosen as the spearhead for its transparency and moralization.

The criminalization of business law occurred progressively, beginning with the application of certain offenses from ordinary criminal law to business matters, such as theft, extortion, blackmail, fraud, or breach of trust. While this application of ordinary criminal law to business was initially possible, since these offenses can also be committed in the course of business activities and, consequently, also harm economic public order, the principle of strict interpretation of criminal law, governing the entirety of criminal matters (Article 111-4 of the Criminal Code), quickly prevented their extension and encountered obstacles in their transposition to new economic criminal behaviors.

Faced with the impossibility of extending the offenses of ordinary criminal law to the new and multiple situations perceived by the State as infringing on economic public order, given the principle of strict interpretation of criminal law, specific charges were established by the legislator to provide a better adapted and more focussed criminal response to business life. A special white collar crime law has thus emerged and has progressively diversified, mostly outside the Criminal Code, encompassing the entirety of economic and business law.

Securities law, which was regulated early on with the framework for solicitation for futures market operations in 1885 , has gradually been subject to specific regulations, ultimately resulting in a unique regime within the Monetary and Financial Code following the adoption of the Financial Security Act of 1 August 2003 .

In company law, faced with the inadequacy of the offense of fraud, the legislator, through the law of 17 July 1856 on limited partnerships with shares, criminalized the distribution of fictitious dividends. This offense was subsequently extended to public limited companies by the law of 24 July 1867  and to limited liability companies by the law of 24 July 1966 . Similarly, the insufficiency of the offense of breach of trust to address the diversity of behaviors constituting misuse of corporate assets led to the adoption of the decrees of 8 August and 30 October 1935, which introduced into the Law of 24 July 1867 on commercial companies  the offense of misuse of corporate assets, credit, powers, and votes, which could be committed against public limited companies and limited liability companies. This offense was subsequently extended to limited partnerships with shares and simplified joint-stock companies by the Law of 24 July 1966 on commercial companies  and to European companies by the Law of 26 July 2005 for confidence and modernization of the economy . All these offenses are now included in the Commercial Code.

However, despite its specialization and deployment outside the Criminal Code, white collar crime law has proven inadequate and insufficient to ensure compliance with economic public order and the effectiveness of criminal charges. Given the particularities of economic and financial delinquency, it seemed relevant, even necessary, to rethink a more appropriate state response to this type of delinquency and to regulate business life more flexibly.

Public policy is characterized by “the  competitive functioning of markets” and "the integrity of financial markets": see, Cass. Ass. plén., 7 January 2011, LawLex201100000031JBJ; Cons. constit., 13 May 2011, LawLex201100000905JBJ; 12 October 2012, LawLex201200002129JBJ; 18 March 2015 LawLex202200011270JBJ; Cass. com., 12 May 2015, LawLex201500000598JBJ; Cons. constit., 14 October 2015, LawLex201500001251JBJ; 7 January 2016, LawLex201600000016JBJ.

Law of 28 March 1885 on futures markets, OJ of 8 April 1885.

Law of 2003-706 of 1 August 2003 on financial security, OJ of 2 August 2003.

Law of  of 24 July 1867 on commercial companies.

Law of 66-537 of 24 July 1966 on commercial companies, OJ of 26 July 1966.

Law of 24 July 1867 on commercial companies.

Law of 66-537 of 24 July 1966 on commercial companies, Art. 460 and 464-1.

Law of 2005-842 of 26 July 2005 for confidence and modernization of the economy, OJ of 27 July 2005.

Emergence of white collar crime law

Criminal law lies at the intersection  at the crossroads of fundamental rights and freedoms. It encompasses a distinct set of rules and principles, such as the principle of criminal legality (Art. 111-2 and 111-3 Criminal Code), the strict interpretation of criminal law (Art. 111-4 Criminal Code), the personal nature of criminal liability (Art. 121-1 Criminal Code), and the intentionality of offenses (Art. 121-3, para. 1, Criminal Code), governing the entirety of the subject-matter and aiming to strike a balance between respecting public order and the rights and freedoms of offenders. These principles, however, demonstrate the strict and rigid nature of criminal law, which proves unsuitable for business law, which is constantly evolving and more inclined to establish rules of legitimacy for behaviors based on developments, requiring the implementation of flexible and adaptable regulation.

The principle of criminal legality, which involves the creation of a normative text (law or regulation) to prohibit and punish behavior, and the principle of strict interpretation of criminal law, which prevents the extension or transposition of existing offenses to new situations, have gradually led to a concerning legislative inflation in the field of white collar crime. The mass of disorganized, heterogeneous, and scattered incriminating texts across numerous codes makes the subject difficult to read, delineate, and understand.

The application of the principle of intentionality of the offense in business matters has led the courts to infer the moral element, which is supposed to be always characterized since “there is no crime or offense without the intention to commit it” (material offenses were removed from the legislative system in 1994), directly from the materiality of the offense, considering the status of the defendant as a business leader or professional. The trial courts almost systematically characterize the professional's intent, considering that due to their status, they could not have been unaware of the violation of the law. The same applies to the status of a business leader, as the commission of the offense by the subordinate, in the absence of a delegation of authority, allows the courts to reveal a conscious breach of their duties of care and supervision, which are intrinsic to their functions.

If the principle that “no one can be criminally liable except for their own actions,” established by Article 121-1 of the Criminal Code, initially designed solely for natural persons, has long been transposed and adapted to legal entities, it remains a principle highly debated by doctrine. Indeed, while the legislator has established the criminal liability of legal entities, personal and indirect, for offenses committed on their behalf by their organs or representatives (Art. 121-2 Criminal Code), and ended, by the law of 9 March 2004 , the principle of specialty, which required that the law or regulation specifically provide the cases in which the legal entity could be criminally liable, certain judicial interpretations, such as the extensive definition of the concepts of organs and representatives , the fact that courts are satisfied with simple fault to engage their criminal liability (unlike the indirect liability of natural persons, for which they rigorously require the characterization of a qualified fault ), or the acceptance of the criminal conviction of an absorbing public limited company to a fine and confiscation for acts constituting an offense committed by the absorbed public limited company before the merger by absorption , seem to directly clash with the principle of the personality of criminal liability and ultimately highlight the existence of a severe repressive system for company directors and legal entities when their criminal liability is at stake.

Law No 2004-204 of 9 March 2004 adapting justice to changes in criminality, Art. 54, OJ of 10 March 2004, in force on 31 December 2005.

Cass. crim., 21 May 2014, LawLex202200009206JBJ; 17 October 2017, LawLex202300014030JBJ.

Cass. crim., 24 October 2000, LawLex202300014031JBJ.

Cass. crim., 25 November 2020, LawLex202200001375JBJ.

Relative inadequacy of criminal law in business life

The inadequacy of criminal law in addressing economic delinquency led the legislator to initiate a movement of partial decriminalization, consisting of a “decriminalization” of certain actions, particularly in competition law and company law. Thus, a large number of anticompetitive practices were decriminalized by the Ordinance of 1 December 1986  and a certain number of offenses under company law by the laws of 15 May 2001  and 1 August 2003 , as well as by the ordinances of 25 March 2004  and 24 June 2004  and by the law of 22 March 2012 .

Decriminalization has not, however, taken the form of a straightforward removal of criminal offenses, but rather led to their replacement with other repressive mechanisms. Thus, alongside an exclusively criminal response under the jurisdiction of criminal courts, civil or administrative responses have been established, under the jurisdiction of civil or administrative courts.

If corporate law seems to have favored a civil response, competition law, securities law, and personal data law have, on the other hand, opted for an administrative response, most often in the hands of independent authorities or the government authorities. Entrusting the prosecution of offenses to relatively autonomous entities composed of specialized agents undeniably presents advantages in terms of the efficiency of control. However, the undertakings prosecuted obviously do not have the same guarantees of defense rights as they would benefit from in a criminal procedure.

Ordinance No 86-1243 of 1 December 1986 on the freedom of prices and competition, OJ of 9 December 1986.

Law No 2001-420 of 15 May 2001 on new economic regulations, OJ of 16 May 2001.

Law No 2003-706 of 1 August 2003 on financial security, OJ of 2 August 2003.

Ordinance No 2004-274 of 25 March 2004 on the simplification of law and formalities for undertakings, OJ of 27 March 2004.

Ordinance No 2004-604 of 24 June 2004 on the reform of the regime of securities issued by commercial companies, OJ of 26 June 2004.

Law No 2012-387 of 22 March 2012 on the simplification of law and the reduction of administrative procedures, OJ of 23 March 2012.

The emergence of para-criminal sanctions

Public authorities, increasingly struggling to suppress white collar crime, are now resorting to self-regulation mechanisms established and implemented by the undertakings themselves, which are more focused on criminal risk prevention than on enforcement.

Compliance or conformity thus consists of implementing, within an undertaking, a set of measures and processes aimed at ensuring compliance with certain rules, as well as detecting and revealing possible breaches, and, above all, preventing both criminal risk and potential reputational damage to which the undertaking would be exposed in case of non-compliance.

If compliance is generally based on a voluntary approach by undertakings that choose to deliberately adhere to the rules they have themselves established, the legislator nevertheless imposes legal obligations for the implementation of compliance programs, particularly in the fight against corruption and integrity, since the Sapin II Law , in large companies employing at least 500 employees and French groups whose companies employ at least 500 employees and achieve a combined turnover of at least EUR 100 million .

These large structures are now required, at the risk of incurring their civil liability, to implement an internal compliance system designed “to prevent and detect the commission, in France or abroad, of acts of corruption or influence peddling” , consisting of a code of conduct, an internal alert system, a risk mapping, procedures for evaluating the situation of both clients and suppliers with regard to the risk mapping, accounting control procedures, a training system for personnel most exposed to the risks of corruption and influence peddling, as well as a disciplinary regime ensuring compliance with the code of conduct and a system for internal control and evaluation of the measures that have been implemented.

Through this more fexible so-called soft law, an undeniable transformation in the handling of economic and business crime is underway, with undertakings being assigned an increasingly significant role both in the development of the norm and its enforcement.

Law No 2016-1691 of 9 December 2016 on transparency, the fight against corruption, and the modernization of economic life, OJ of 10 December 2016.

Law No 2016-1691 of 9 December 2016, Art. 17.

White Collar Crime (en cours)

1. Emergence of white collar crime law

2. Relative inadequacy of criminal law in business life

3. The emergence of para-criminal sanctions

4. Towards greater flexibility in the law