Publication
11 April 2022

The post-Sapin 2 law: merely modifications or a real revolution?

The law of 9 December 2016, known as the Sapin 2 law, opened a new era in the fight against corruption in France[1]. Five years after its entry into force, assesments and proposals for new legislation in this area have been published. A bill "aimed at reinforcing the fight against corruption" presented on 19 October 2021 by Mr Raphaël Gauvain, then announced as the "Sapin 3 law", does not seem to fit into the legislative debate in view of the busy parliamentary calendar between now and the presidential elections. This Sapin 3 law, which is not expected to be discussed any time soon, nevertheless raises the question of whether the changes considered by these various assessments and proposas herald a revolution or merely practical modifications.

 

After several years of application of the Sapin 2 law, France, subject in 2021 to two new evaluations of its anti-bribery regime by the OECD[1] and the Group of States against Corruption (GRECO)[2], has also undertaken a parliamentary information mission on the evaluation of the impact of the Sapin 2 law. This evaluation concluded with an information report presented on 7 July 2021 by Mr Raphaël Gauvain and Mr Olivier Marleix, containing fifty proposals aimed at “giving a new start to France’s anti-corruption policy”[3]. It directly inspired the bill “aimed at reinforcing the fight against corruption” presented on 19 October 2021 by Mr Raphaël Gauvain, respectively on 3 and 9 December 2021 [4].

This superposition of analyses, recommendations and proposals has shown the need for complementary measures to those enacted by the Sapin 2 law, but are these simple adjustments or a revolution in anti-corruption legislation?

 

The adjustments made to the provisions of the Sapin 2 law in the name of a better fight against corruption

Extending the scope of anti-corruption compliance obligations to subsidiaries of foreign groups of companies established in France and to public actors

Article 17 of the Sapin 2 law obliges the managers of companies having their registered office in France or belonging to a group of companies whose parent company has its registered office in France, which employ at least 500 employees and generate an annual turnover of more than €100 million, to take measures to prevent and detect corruption committed in France or abroad[5].

Both the information mission on the evaluation of the impact of the Sapin 2 law[6] and the bill “aimed at reinforcing the fight against corruption” suggested removing the requirement that the parent company’s headquarters be located in France [7].

Such a proposal makes it possible to re-establish equality for economic operators acting on French soil – provided that their parent company meets the thresholds of 500 employees and €100 million in turnover – which had previously been altered by the difference in treatment between French companies and subsidiaries of foreign groups established in France[8].

In addition to the obligations imposed on private operators, the analyses, evaluations and proposals made have focused on public actors, who are highly exposed to probity violations because of their functions and decision-making capacities.

The information mission on the assessment of the impact of the Sapin 2 law[9] and the draft law thus suggested that the measures provided for in Article 17 of the Sapin 2 law should apply to public institutions and that the obligation should be placed on the managers of these public players[10].Going even further than the text of the Sapin 2 law and following the recommendations of the French Anticorruption Agency [11]. it was suggested to add the implementation of internal controls and audits in addition to anti-corruption accounting controls and the development of awareness-raising actions in addition to those for the training of managers and other personnel most exposed to corruption risks[12].

 

The extension of the Public Interest Judicial Agreement (CJIP) to the offence of favouritism and the modification of its regime

The proposed law, in line with the recommendations made by the information mission on the assessment of the impact of the Sapin 2 law, provides for a series of changes to improve the CJIP regime.

In order to avoid any trivialisation of the CJIP, the draft law envisages an extension of the scope of application to the offence of favouritism [13].It also envisages an increase in the time allowed for legal persons to execute a compliance sanction from three to five years ordered under a CJIP[14], as well as the possibility for the public prosecutor’s office to request an extension of the duration of the CJIP with the agreement of the legal person and the validation of the judge [15] in order to allow for the full execution of the CJIP and to ensure the success of the system [16].

Above all, it is planned to give the legal person access to the case file from the moment it is informed of the public prosecutor’s proposal to initiate a CJIP, and to extend the protection of the documents and information exchanged in the event of a waiver during the negotiations or a refusal of the public prosecutor’s proposal [17].This moment also marks the new possibility for the public prosecutor, with the agreement of the legal person, to appoint a third person to represent the company in the negotiations of the agreement [18].

For the OECD, such measures would “help to increase the use of this instrument for non-trial resolution of [foreign bribery] cases”[19].

 

The new cooperation between enforcement authorities in the implementation of anti-corruption compliance obligations.

The information mission on the evaluation of the impact of the Sapin 2 law initially intended to create a new authority, called the High Authority for Probity, competent to control the respect of compliance obligations of private and public actors [20].

The bill “aimed at strengthening the fight against corruption” envisages instead a review of the division of tasks between the French Anticorruption Agency and the High Authority for Transparency in Public Life (HATVP). The French Anticorruption Agency would see its missions of administrative coordination and strategic planning, advice and control of economic actors, as well as monitoring and control of the blocking law confirmed [21].The HATVP would be entrusted with the tasks of advising and controlling public actors, as well as drawing up recommendations and controlling the quality and effectiveness of measures to prevent and detect corruption implemented by public actors [22].In this respect, the HATVP would be endowed with a power of control, a right of communication and a power to impose sanctions through the creation of a sanctions committee [23].

The HATVP’s new mission of advising and controlling public actors, which necessarily implies ensuring consistency with the French Anticorruption Agency’s mission of advising and controlling economic actors, responds to Group of States against Corruption’s (GRECO) concern, which recommended strengthening cooperation between the French Anticorruption Agency and the HATVP in the implementation of their competences with regard to persons holding senior executive positions[24].

 

Improving the use of negotiated justice for natural and legal persons through a better articulation between the CJIP and the CRPC.

The OECD report highlights the criticism of the use of CRPC in parallel with CJIP negotiations, especially when these are not approved as in the Bolloré case. It is concerned about the consequences of such a situation on the possibility for prosecutors and investigating judges to conclude CRPC’s and on a blocking of the level of cooperation necessary to conclude a CJIP[25].The OECD then recommended that France include natural persons in the PIC procedure or ensure further coordination between the “non-trial resolution mechanisms applicable to natural and legal persons respectively” [26].

The information mission on the evaluation of the impact of the Sapin 2 law is not in favour of extending the CJIP to natural persons, as this would lead to a lack of conviction for an offence as serious as corruption[27]. It has therefore proposed to improve the link between these two procedures by creating a procedure of CRPC specific to corruption and other offences against probity where the risks of refusal of approval would be limited [28].

 

The reinforcement of the obligations linked to the register of interest representatives as a guarantee of the transparency of public decisions.

The bill suggests modifying the definition of interest representatives to reduce them to legal persons under private law, public establishments or public groupings carrying out an industrial or commercial activity, and the bodies mentioned in Chapter I of Title I of Book VII of the “Code de commerce” and in Title II of the “Code de l’artisanat”, whose main or regular activity is to influence the public decision [29].

The draft law also calls for an increase in the frequency of declarations and the information to be transmitted, except for actions carried out on low-stake decisions for public decision-makers belonging to local authorities or inter-municipalities [30].

It also provides, if the HATVP’s sanctions commission were to be set up, for the administrative sanctioning of interest representatives who do not comply with their obligations by a penalty payment in the event of non-compliance with a prior formal notice, possibly followed by a fine of up to 4% of annual worldwide turnover or 50% of the expenses incurred in implementing the interest representation actions concerned, and for the publication of either of these decisions [31].

 

Potential revolutions in the debate

 The possibility of modulating the anti-bribery compliance measures provided for by the Sapin 2 law according to the level of risk exposure.

Unlike what is foreseen for private actors, the proposed law “aimed at reinforcing the fight against corruption” foresees the possibility for public officials to implement only some of these measures “depending on the nature of the entity and the level of exposure of the entity to the risk of corruption or breach of probity to which it is exposed”[32], according to a decree of the Council of State.

This gives rise to the new idea of a “flexible” regime with measures to be implemented to varying degrees depending on the sector of activity, size or any other relevant criterion applied to private actors, which could be a means of obliging small and medium-sized enterprises to put in place measures to prevent and detect corruption by avoiding an “all or nothing” policy.

 

The possibility of criminal liability of the legal person in case of failure to comply with the anti-corruption compliance obligations provided for by the Sapin 2 law.

The proposed law “aimed at reinforcing the fight against corruption” provides for a relaxation of the conditions for the criminal liability of legal persons by allowing them to be held criminally liable in case of failure to supervise the behaviour of their employees, which would have allowed the commission of one or several offences [33].

The OECD indicates that it would have liked the text to go beyond the lack of supervision and that a link be made between the liability of legal persons and the establishment or failure to establish a compliance program [34].

 

The entry of the internal investigation in the law

The practice of internal investigation has been taken into account in the joint guidelines of the PNF and the French Anticorruption Agency, which state that it is “expected that the legal person wishing to benefit from a CJIP” has carried out such an investigation [35]. However, the latter is not yet standardised, with the exception of the dedicated ethical rules issued by the Paris Bar Association, and in practice borrows from other laws, such as legislation on the protection of personal data and case law on social matters.

The proposed law “aimed at strengthening the fight against corruption” provides for its inclusion in the code of criminal procedure when it is initiated by a legal person accused of one or more offences. The law would then provide for a real internal investigation regime with a reasonable time limit for the summons, notification of rights when the person is summoned, the drafting of a report, read over and signed by the person interviewed, and access to the file [36].

In conclusion, most of the measures identified demonstrate the desire for a future text to complete, correct, formalize and clarify the meaning given to the French fight against corruption by the Sapin 2 law. Some of them, however, carry the seeds of a revolution, such as the possibility of modulating the anti-corruption measures to be taken, facilitating the criminal liability of the legal person or providing a legislative framework for the internal investigation. It remains to be seen what a potential Sapin 3 law will contain.

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