The increase in foreign discovery procedures targeting French companies has led the French legislator to introduce various legal instruments designed to mitigate the risks associated with the dissemination of confidential or sensitive information abroad through such proceedings.
Therefore, in 1968, a “Blocking Statute” was adopted in order to frame discovery or pre-trial discovery requests for the collection of evidence in foreign legal proceedings. Consequently, the law prohibits French persons from communicating various strategic information or seeking to obtain such information in the context of foreign proceedings, without prejudice to the international mutual legal assistance treaties.
Nonetheless, this law has regularly been bypassed. Indeed, US courts have long pointed to the lack of enforcement of this law to require French persons to circumvent it in their relationships with US authorities. Indeed there have been only very few French cases in which the application of this law has resulted in sanctions and solely a small sanction is incurred.
Since then, the French government has reinforced the impact of the “Blocking Statute”. In 2016, a decree has created the Service de l’Information Stratégique et de la Sécurité Economiques, (Strategic Information and Economic Security Department – “SISSE”), attached to the Ministry of the Economy, and has entrusted it with the task of overseeing the application of the law to preserve France’s sovereignty. Since 2019, the SISSE’s responsibilities have been expanded to identifying sectors and entities likely to have relevant information pertaining to France’s economic interests. The SISSE is also responsible for educating and informing people about economic security issues.
To further develop this approach, a decree applicable since 1 April 2022, strengthens the role of the SISSE. Now, persons targeted by foreign discovery requests must inform the SISSE of such a request, transmit the request to the SISSE, and provide it with a file of the case. In order to increase its efficiency, the SISSE must fulfill its function in conjunction with the Ministry of Justice, the Ministry Foreign Affairs or any other interested Ministry, taking into account the sector of activity of the person concerned.
The file to be sent to the SISSE must contain at least the following elements:
- The registration number of the company holding the requested documents and information (Trade and Companies Registry “RCS”);
- The organizational chart identifying the individuals or legal entities controlling the company, as well as the legal entities controlled by it within the meaning of Article L. 233-3 of the French Commercial Code;
- A brief description of the activities carried out by the company in France and in the country of the applicant;
- The list of the company’s main French and foreign competitors;
- The reasons for the request for disclosure made by the applicant to the company;
- The correspondence between the applicant and the company;
- The contact details of a designated person within the company.
This file will allow the SISSE to provide a formal opinion in less than a month on the applicability of the “Blocking Statute” in the specific instance. The opinion may be communicated to the foreign authorities in case of refusal to transmit the information to them.
It should also be noted that the SISSE has published a practical guide in conjunction with the French Association of Private Companies (AFEP) and the French Employers’ Federation (MEDEF), to help companies comply with their obligations under the “Blocking Statute”.
This is a useful reform as it clarifies the obligations of French companies subject to requests for information and discovery in the context of foreign proceedings.