The Risk & Compliance Institute held its 2nd congress on 29 and 30/09/20 in Paris
Paris, September 29, 2020
Under the pressure of public opinion and the watchful eye of governments, which have gradually become aware that corruption is destroying citizens' confidence in institutions, business law has undergone notable changes. In France, as elsewhere in the world, and in particular in the countries of Europe, increasingly restrictive standards have been issued to fight against corruption and breaches of the duty of probity.
Compliance was originally very strongly inspired by Anglo-Saxon business law. The fight against corruption has long remained the prerogative of the United States, with the adoption of the Foreign Corrupt Practices Act (“FCPA”) in 1977. This law was first established as the most important, if not the only one. extensive regulations against international corruption.
Indeed, until the adoption of the OECD Convention on the fight against bribery of foreign public officials in international business transactions in 1997 - ratified by France in 1999 - only the American FCPA testified to a desire to prevent and effectively sanction corruption, thus contributing to the emergence of an Anglo-Saxon concept of compliance. Based on severe and negotiated justice, in particular through the application of the Deferred Prosecution Agreement; this "economic vision of law" led the DOJ to initiate proceedings against European companies, in an extraterritorial framework, on the grounds that corruption was insufficiently prevented and punished in France and more generally within the Union European, thus generating distortions of competition between companies, in a now globalized market.
In the absence of the will of the Union institutions to correct this imbalance, the United States has continued to assert its role of "global policeman", by subjecting European companies that do not comply with their law and to economic sanctions. decided unilaterally by them to considerable fines. This was particularly the case for companies such as Alcatel-Lucent, Technip, Total, Alstom, Société Générale.
This American use of compliance, as the armed wing of a foreign policy with determined objectives, has contributed to the imbalance of the Euro-Atlantic relationship, as the inability of France, and of most European countries, to conduct a comprehensive and coherent anti-corruption policy strongly emphasized. France's accession to international conventions - in particular the OECD Convention in 1999 and the Council of Europe Criminal Law Convention on Corruption in 2008 (even though the convention had been signed in 1999) - did not happen. is accompanied neither by the adoption of a sufficient domestic legislative arsenal nor by the effective implementation of the measures recommended by international organizations.
In France, the desire to reach the level of the best international standards led the legislator to take new measures from the beginning of the 2010s: this was notably the case of the laws of October 11 and December 6, 2013 relating to the transparency of public life and the fight against tax fraud and serious financial delinquency.
France's formal entry into the modern era of compliance dates from the adoption of the law of 9 December 2016 on transparency, the fight against corruption and the modernization of the economy, known as the Sapin law. II, which introduces into French law a set of rules intended to prevent corruption and influence peddling, in particular by the implementation of a compliance plan in companies of a significant size under the control of the Agency French Anti-Corruption (“AFA”).
Three years after its entry into force, the first results of the application of the Sapin II law are positive. French companies have generally adapted well to the new legislative and regulatory framework and AFA's activity is gradually gaining momentum.
This first legislative movement in the fight against corruption now deserves to be supplemented by new provisions, both at French and European level. In the coming weeks, Le Club des juristes will publish a report making proposals in this direction.
In French law, it would be appropriate, for example, to change the status of whistleblowers by rapidly transposing the European directive of 23 October 2019 on the protection of persons who report violations of Union law. It would also be advisable to support the merger of the AFA with the High Authority for the Transparency of Public Life, to improve the readability of the register of interest representatives and to ensure the rise of the Judicial Convention of public interest ("CJIP").
Improving compliance mechanisms under French law also means supporting the rise of the compliance manager in the company and creating an anti-corruption framework adapted to local authorities, which takes into account their size and their specific operating characteristics.
However, the most important stake in the years to come is the strengthening of a European model of fight against corruption.
The asymmetric relationship between the United States and Europe can only be corrected by the implementation of a renewed European system, efficient and adapted to the constraints of the internal market. The rebalancing of the Euro-Atlantic relationship also supposes a profound change in the legal tools of the European Union.
The European Union has already been able to adapt to offer a coordinated response to the challenges common to all Member States.
This was particularly the case for the fight against money laundering and the financing of terrorism (“LCB-FT”), or even for data protection.
In the fight against money laundering and the financing of terrorism, the European Union adopted its first directive in 1991. In the aftermath of the 2015 attacks and the “Panama Papers” scandal, the Commission wished to introduce a fifth AML directive. FT, adopted on May 30, 2018 and entered into force on July 9, 2018. It was transposed into French law, by the ordinance of February 12, 2020 strengthening the national system for the fight against money laundering and the financing of terrorism. The objective was in particular to harmonize the due diligence measures to be implemented with regard to business relationships or operations involving high-risk third countries and also to extend the obligations of prevention to service providers linked to digital assets.
In terms of the fight against corruption, Transparency International pointed out, in January 2019, the absence of a comprehensive and coherent policy to prevent and fight against corruption at the level of the European Union. Despite this, the new Commission did not see fit to make the fight against corruption a priority.
However, corruption represents an obstacle to the proper functioning of the internal market by creating distortions of competition between companies which practice it and others. It also facilitates the infiltration of criminal groups into European economies and contributes to endangering democracies by strengthening the crisis of confidence which is currently damaging the relationship between citizens, their public institutions and the market.
It is therefore essential that the Union adopt a comprehensive anti-corruption policy, articulated around four objectives:
(1) the establishment of a “level playing field” between the different Member States of the Union;
(2) the resolution of possible conflicts of jurisdiction at European level;
(3) the defense of European companies in the world by rebalancing the asymmetry of the Euro-Atlantic relationship that exists in matters of extraterritoriality; and
(4) the promotion of European standards and practices in the fight against corruption in the world, as an element of securing establishment and investment strategies.
Achieving these objectives requires the implementation of a policy of harmonizing European law and improving cooperation between the Member States in the fight against corruption.
I. Harmonization of European law on the fight against corruption
Today, European law only considers the fight against corruption within a relatively narrow framework which does not explicitly include acts of transnational bribery of a foreign public official in its field of action and does not impose any sufficiently firm obligations to Member States.
The European system in this area is relatively small. It consists :
(1) of the Convention of 26 May 1997 on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union;
(2) of the framework decision of 22 July 2003 on the fight against corruption, which requires Member States to put in place effective and proportionate sanctions for acts of corruption occurring in the private sector; and finally
(3) of the directive of 5 July 2017 on the fight against fraud affecting the financial interests of the Union, which criminalizes the offense of corruption only when it precisely harms those financial interests.
To strengthen this mechanism, as well as its implementation, a European anti-corruption package should be adopted and anti-corruption clauses inserted in acts of European private law.
The European anti-corruption package would consist of three directives.
A first directive could require member states to comply with the principles and recommendations set out in the 1997 OECD Convention on Bribery of Foreign Public Officials in International Business Transactions. Once all the principles laid down by these texts have been transposed into union law, transnational bribery of foreign public officials will thus be more systematically taken into account, thus contributing to the strengthening of the internal market.
A second directive will replace the framework decision of 22 July 2003 on the fight against corruption in the private sector, which is currently insufficiently implemented by the Member States. It will thus be a question of better integrating the criminalization of passive and active bribery in the private sector in European law, so as to fight more effectively against intra-European transnational bribery and to propose solutions of jurisdiction appropriate to allow the States members to crack down on corruption offenses that affect their territories, although committed outside it.
A third directive should require Member States to subject companies of significant size to obligations to prevent and detect corruption, which is recommended in particular by the Recommendation of the OECD Council of 26 November 2009. The effectiveness of these measures was highlighted by an OECD study carried out in 2017, entitled "The Detection of Foreign Bribery", which established in particular that foreign bribery mechanisms were, for 24% of them, detected following a self-denunciation or the action of a whistleblower.
The directive could also require Member States to designate an authority in charge of monitoring compliance with the obligations to prevent and detect corruption imposed on companies meeting certain threshold conditions, while leaving them free to choose this. authority, which could be administrative or judicial.
At the same time, anti-corruption clauses could be inserted in acts of secondary European law.
First, in acts of secondary sectoral European law, making the exercise of certain regulated activities subject to authorization, such as in banking, investment services and insurance. Such clauses already exist in certain directives, such as the directive of July 26, 2014 on the award of public contracts, which requires contracting authorities to exclude an economic operator who has been the subject of a conviction for corruption, from participating to a procurement procedure.
Therefore, the insertion of such clauses in acts of secondary sectoral European law, making the exercise of certain regulated activities conditional on authorization, would help restore a balanced relationship between the European Union and the United States, as well as other powers and competitors, in the fight against corruption.
Secondly, a conditionality clause relating to the fight against corruption should be systematically imposed by the European Union in new generation economic partnership agreements concluded with third countries.
This type of clause is inspired by the "fundamental rights and rule of law" clause, which allows third countries which do not respect certain commitments made in terms of fundamental rights to forfeit the advantages granted to them. Similar clauses relating to corruption or, more broadly to “governance”, have already been incorporated in a partnership and cooperation agreement concluded with Indonesia in 2009, or in the economic partnership agreement concluded with Japan in 2019.
II. Improving cooperation between Member States in the fight against corruption
The adoption of an anti-corruption package under European law should be accompanied, on a procedural level, by strengthening cooperation between the Member States in the fight against foreign bribery.
Ultimately, improving cooperation requires extending the competence of the European Public Prosecutor's Office.
The European Public Prosecutor's Office was created by the regulation of October 12, 2017, which entered into force on November 20, 2017. It will be set up at the earliest on November 20, 2020. Within the European Union, the European Public Prosecutor's Office is responsible for with regard to offenses committed in twenty-two Member States out of a total of twenty-eight. In addition, the material jurisdiction of the public prosecutor's office is limited to offenses "affecting the financial interests of the Union" resulting in financial damage exceeding 10,000 euros. It follows, in particular, that acts of foreign bribery, which do not harm the financial interests of the European Union, fall outside the competence of the European Public Prosecutor's Office.
However, possibilities for extending the competence of the European Public Prosecutor's Office are conceivable. According to the regulation, the European Public Prosecutor's Office is also responsible for any other criminal offense inextricably linked to criminal behavior falling within the jurisdiction of the Public Prosecutor's Office. A first avenue would therefore consist in recommending a broad interpretation of the concept of “an offense inextricably linked” to another offense falling within the competence of the European Public Prosecutor's Office. However, this concept appears to be particularly complex and, in any event, closely linked to the existence of a predicate offense affecting the financial interests of the European Union.
Another avenue could consist in making prevail a broad interpretation of the concept of “protection of the financial interests of the Union”. However, such an interpretation would be insufficient to establish the competence of the European Public Prosecutor's Office with regard to acts of foreign bribery, with no apparent link with the protection of the Union's financial interests.
Finally, a last way, undoubtedly more radical, would consist in unbinding the competence of the European Public Prosecutor's Office of the only protection of the financial interests of the Union and to extend it to the acts of transnational corruption not affecting them. However, this can only happen through a legislative act.
For the time being, and given the limited material competence of the European Public Prosecutor's Office, it is essential to strengthen cooperation between the Member States.
The European Area of Freedom, Security and Justice (“AFSJ”), developed on the basis of the Amsterdam Treaty of 1997, offers Member States possibilities for cooperation in law enforcement matters. Acts of corruption can thus, from now on, give rise to a European investigation order, the issuance of a European arrest warrant, acts of cooperation within the framework of Eurojust and acts of cooperation within the framework of Europol.
Eurojust pursues, in the exercise of its mission, three main objectives provided for by the regulation of 14 November 2018: (1) to promote and improve coordination between the competent judicial authorities of the Member States, in particular as regards serious forms of organized crime; (2) promote and improve cooperation between the same authorities, in particular by facilitating the implementation of international legal assistance and the execution of extradition requests; (3) support the same authorities, in order to enhance the efficiency of their investigations and prosecutions.
In addition, the European Union has a mechanism for resolving conflicts of jurisdiction between Member States in law enforcement matters. The framework decision of November 30, 2009 establishes the application of the principle "non bis in idem" within the European Union and encourages "to reach a consensus on any effective solution aimed at avoiding the negative consequences arising from the existence of such parallel proceedings' and to encourage, as far as possible, the concentration of such proceedings in a single Member State.
However, despite these mechanisms, which would be likely to facilitate the repression of cases of foreign bribery, it appears that Eurojust's activity remains mainly focused on other forms of organized crime, such as fraud and money laundering. of capital, drug trafficking or human trafficking.
Under these conditions, it would undoubtedly be more effective for the cooperation between the Member States in the fight against foreign bribery to be reinforced within Eurojust, which constitutes the natural framework for the resolution of conflicts of jurisdictions in criminal matters, in the awaiting the rise of the future European Public Prosecutor's Office. To do this, Member States should express a clear political will to make this subject a priority for the agency.
To end on a positive note, on March 4, 2019, an agreement was reached between the Hempel company, the German prosecution and the Danish prosecution. The company agreed to pay the sum of $ 33.4 million for acts of corruption it had committed in Germany and Asia. Such an agreement to suspend proceedings, admittedly made outside the framework of the European Union, illustrates the European movement of inter-state cooperation in the fight against corruption. This is the first time that a joint resolution agreement has been concluded between two European prosecutors without the intervention of the United States. If the conclusion of agreements to suspend proceedings between European public prosecutors' offices were to be repeated, this could be an interesting alternative solution to the resolution of conflicts of jurisdiction.
It would be better, however, for this distribution of powers to be organized at European Union level.