Analysis
14 July 2019

Anticorruption Agency (AFA) and Financial Prosecutor (PNF) take a stance in favor of DPAs though Guidelines

Bastille Day Newsletter 2019 - Legislative, Regulatory & Policy Updates

 

The number of French DPAs – the Convention Judiciaire d’Intérêt Public (“CJIP”) – is on the rise, both domestically and as part of cooperation in global enforcement. To some extent, the French guidelines show considerable proximity with what is happening other side of the Atlantic Ocean and the English Channel.

The AFA & PNF strengthen the French prosecutor’s power to settle

On June 27, 2019, the National Financial Prosecutor (“PNF”) and the French Anti-corruption Agency (“AFA”) released guidelines that details the CJIP mechanism. In this regard, companies are required to cooperate and to initiate internal audits.

The guidelines begin with a reminder of the negotiation process and identifies what needs to be achieved to secure a CJIP.

It also highlights the advantages of a CJIP for a company. Several additional penalties regularly issued by tribunals such as exclusion from public tender for instance, cannot be imposed through a CJIP.

One of the focal points of the guidance is the assessment of the fine. The amount of the fine will be determined by several criteria including the benefits resulting from the misconduct, overall revenue, and the severity of the misconduct.

PNF and AFA clearly encourage legal entities to self-report facts and to cooperate with French prosecuting authorities. This constitutes a major change in the French criminal system where previously, there was not much room for cooperation, discussion and negotiation with Prosecutors (except in a very limited way with the French plea bargaining, the Comparution sur reconnaissance préalable de culpabilité (“CRPC”).

Furthermore, the guidance underlines the idea that the CJIP favors international coordination between foreign authorities prosecuting the same facts.

By aligning itself with the US approach, France attempts to protect itself from DOJ prosecution – major sanctioning authority with its tendency to apply extraterritoriality.

Brief contrast & compare with DOJ April guidance

On April 30, 2019, the Criminal Division of the DOJ published updated guidance on the “Evaluation of Corporate Compliance Programs1.” Unlike French Sapin II law2, the Foreign Corrupt Practice Act (“FCPA ”) provides that corporate compliance programs must be evaluated exclusively in the context of criminal investigations.

This new guidance emphasizes the role of the prosecutor when evaluating the effectiveness of corporate compliance programs. There are “common questions that [the DOJ] may ask in the course of making an individualized determination”. According to this guidance, prosecutors are required to consider three questions:

(i) “Is the corporation’s compliance program well designed?”
(ii) “Is the program being applied earnestly and in good faith?’ In other words, is the program being implemented effectively?
(iii) “ Does the corporation’s compliance program work in practice?

The guidance uses these questions as the framework for the 12 most common compliance concerns3. It sets out the criteria for a well-designed compliance program and instructs the prosecutor to assess the effectiveness of internal compliance programs – strengthening its decisions with the examination of compliance programs’ efficiency4.

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