By the Compliance Lady
Five years after Sapin 2 law was born, Bruno Le Maire’s cabinet gives the green light for what sounds like a new “Sapin 3” law. The Sapin 2 law marked a real turning point in the fight against corruption in France by introducing significant changes into law, creating the French Anticorruption Agency (AFA), and adding a preventive dimension that did not exist elsewhere: the obligation for certain private companies to put in place anti-corruption measures.
In their report delivered on July 7, 2021, Deputies Raphaël Gauvain and Olivier Marleix, co-rapporteurs of the French National Assembly’s Law Commission in charge of evaluating the Sapin 2 Law, made a positive assessment of the Sapin II law, but note that France has not made any progress in the international indices of perception of corruption since 2015. They noted that in 2020, France was ranked 23rd on Transparency International’s CPI , the same level as in 2015.
They are therefore making 50 proposals to give the Sapin 2 law a new lease of life to strengthen the fight against corruption in France. Proposed bill n ° 4586 is directly inspired by the report.
Some of the proposed changes are certainly noteworthy for compliance officers and anticorruption practitioners. Below are some relevant snippets
1. Change in AFA’s scope and creation of a new Authority
Whilst AFA’s performance was saluted in the report for having made it possible “to install and give credibility to the system resulting from the Sapin 2 law, from the point of view of companies as well as of our foreign partners” , the report considers that the system should be further strengthened.
The report is suggesting redefining and refocusing AFA’s missions on administrative coordination. The AFA would, going forward, be mainly in charge of centralizing and sharing information to prevent and detect corruption. AFA’s role as strategic advisor would be abolished.
The AFA’s advisory and monitoring functions on anti-corruption compliance programs are suggested to be transferred to the Haute Autorité pour la transparence de la vie publique, or the High Authority for transparency in public life in English (HATVP) – an agency currently responsible for identifying and preventing potential conflicts of interest among French civil servants.
The report suggests creating a single independent administrative agency for integrity matters.
2. Sapin 2 will apply to more entities
Among the other points to be improved, the scope of entities subject to the prevention and detection obligations provided for in article 17 of the Sapin 2 law would be extended. Currently, the law permits “small” French subsidiaries (less than 500 employees, less than 100 million euros in revenues) of “large” foreign groups to not be subject to Article 17 of the Sapin 2 Law.
The report recommends removing the condition relating to the location in France of the head office of the parent company, in order to subject to the obligations provided for in Article 17 the small subsidiaries of large foreign groups established in France, as soon as the parent company exceeds the thresholds provided for by the Sapin 2 law (more than 500 employees and at least 100 million euros in turnover).
This would open the door to equal treatment between small subsidiaries of large groups located in France, whether the parent company is established in France or not.
In addition, the deputies note that article 3 of the Sapin 2 law provides that the competence of the French Anti-Corruption Agency extends to public entities, but the law does not specify, the nature of the obligations owed to it nor does it provide for any sanction in the event of an insufficiency or a failure to comply with these obligations.
Consequently, they consider necessary to create compliance obligations adapted to public administrations, which would be adapted to their size and the risks to which they are exposed.
3. More of the Convention judiciaire d’intérêt public (CJIP)
Since its implementation by the Sapin II law, the CJIP (the French equivalent of the Deferred Prosecution Agreement, or DPA) has had significant success. CJIPs just like DPAs are used as an alternative to prosecution and allow legal persons suspected of financial offenses to opt for a negotiated solution with the prosecution rather than face a criminal trial. The rapporteurs insisted on the need to promote the CJIP as it provides transactional justice and ensures the speedy resolution of cross-border disputes.
The rapporteurs wish to enhance the CJIP by extending it to the offense of “favoritism” and by further protecting the documents and information communicated by the legal person to the judicial authorities during the negotiation phase.
The rapporteurs did not recommend to extend the CJIP to individuals. They favor the creation of a Comparution sur reconnaissance préalable de culpabilité (CRPC) specific to corruption offenses, subject to the voluntary disclosure and cooperation of the individual. .
The rapporteurs suggested that internal investigations conducted within the framework of a CJIP should be supervised by giving the public prosecutor’s office the possibility of appointing an ad hoc representative in charge of the internal investigation and by introducing new rights for the individuals brought in for questioning (right to be assisted by a lawyer, right to know the facts with which they are accused, etc.).
Finally, the commission is suggesting to offer more guarantees to companies during the negotiations , in order to encourage voluntary self disclosures. Example of guarantees could include (i) a better consideration of the degree of cooperation and (ii) a reduction of the fine according to a scale that would be made public.
4. More protections for whistleblowers
The rapporteurs deemed that the risks of retaliation against whistleblowers and the lack of financial support constitute obstacles to the effective use of whistleblowing channels.
The report highlighted that at the time when France must transpose the European directive of 23 October 2019 on Whistleblowers, it is essential to ensure better protection for whistleblowers to reinforce the existing whistleblowing framework. The proposed transposition law which is due to be discussed next November in the National Assembly is directly inspired by the Gauvain-Marleix report and takes up a large number of its proposals.
It was suggested in the report to create a more incentive-based system and offer better protection to whistleblowers by amending existing admissibility criteria.
The criterion of “disinterestedness”, considered to be too vague, was asked to be removed. Reporting procedures would be simplified by abolishing the current obligation to first have the whistleblower report wrongdoing internally, and instead authorizing whistleblowers to contact directly the authorities, provided specific conditions are met ensuring their anonymity and the confidentiality of the documents transmitted.
A list of reprisals against which whistleblowers would be protected were detailed, and the creation of a dissuasive civil sanction and an offense of “retaliation against a whistleblower” were suggested.
The Defender of Rights would be charged to express his opinion on the good faith of a whistleblower, as well as to monitor the processing of alerts.
From Sapin 2 to Sapin 3?
All these proposed changes certainly promise to enhance the fight against corruption in France. I shall carefully monitor future parliamentary discussions on the upcoming “Sapin 3” Law and advise on its future outcome.