According to Transparency International, France is lagging behind other countries on international anti-bribery standards. In the 2015 Corruption Perceptions Index France only ranked 23rd; far behind other European countries such as Denmark, Germany, the United Kingdom and the Netherlands. However, in launching a new bill on transparency, the fight against bribery and modernisation of the economy, the French government has displayed its willingness to develop a new set of tools to improve the fight against bribery. For companies doing business in France, this legislation looks set to introduce new compliance requirements, in particular a compulsory internal code of conduct and whistleblowing system.
The new bill, known as Sapin II (in reference to the Minister responsible for its enactment, Michel Sapin, who was also responsible for the enactment of an anti-corruption law in 1993), was adopted by the Council of Ministers on 30 March 2016. Sapin II is now tabled for discussion at the National Assembly where debates are to take place from June 2016.
New anti-bribery agency
One of the main changes brought by Sapin II is the creation of a new public agency, the National Agency for Prevention and Detection of Bribery(Agence nationale de détection et de prévention de la corruption), which is to replace the Central Service for Prevention of Bribery (Service central de prévention de la corruption).
This agency will have, with respect to private corporations, the following prerogatives:
- regulation of the corporate duty of vigilance in connection with the prevention and detection of bribery practices;
- supervision of corporate compliance, including through the implementation of a compliance programme; and
- monitoring of compliance with Act N°. 68-678 of July 26 1968 relating to the carrying out of foreign authorities’ decisions requiring French companies to implement anti-bribery compliance programmes.
New obligations on large companies: codes of conduct and whistleblowing procedures
More importantly, if Sapin II is enacted in the version adopted by the Council of Ministers in March 2016, large companies with more than 500 employees and generating an annual turnover higher than 100 million euros in France – which concerns approximately 1,600 companies – will be under an obligation to implement internal anti-bribery policies in France and in foreign countries.
Although Sapin II‘s scope may not be as extensive as the USA Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act 2010, measures will have to be complied with across all undertakings controlled by such French companies (when they have consolidated accounts), which could therefore include foreign companies.
These companies will be required inter alia to:
- adopt an internal code of conduct defining which types of behaviours are prohibited inside the company, as they might be considered as unlawful;
- set up a whistleblowing system allowing employees to report behaviours that breach such code of conduct.
Interaction with competition law
These measures could prove to be a useful addition to the existing compliance measures endorsed by the French Competition Authority (Autorité de la concurrence). Despite their different nature, both corruption and anti-competitive behaviours have the effect of reducing the economic performance of businesses and governments. This is particularly true in the context of public procurement contracts and international commercial transactions, where both corruption and anti-competitive behaviours distort competition and hinder the efficient mobilisation of resources and means for sustainable economic development.
As a consequence, the adoption of a compulsory compliance programme could lead some companies to reflect on unlawful economic behaviours in general, prompting them to adopt anti-trust compliance programmes or strengthening those already in place.
In addition, the setting up of whistleblowing systems may result in an increase in the number of anti-competitive practices that are exposed and ultimately
prosecuted, in particular in the context of public procurement contracts, where an undeniable overlap exists between the fight against corruption and the fight against collusion. Lastly, Sapin II could result in fostering close co-operation between prosecutors and the FCA, as is already the case in Germany.
With Sapin II still being in the early stages of the legislative proceedings, its scope is liable to be modified. It remains to be seen what happens next…
If you would like to find out more on how Sapin II could affect your business – and how to comply – contact our experts below.