14 July 2017

The Sapin II law, a new source of liability for companies and individuals

Bastille Day Newsletter 2017 - Legislative Updates


The “Sapin II” law has been designed as a defensive law against the extraterritoriality of foreign legislation (FCPA, UKBA). This new legislation is aimed at strengthening French judicial sovereignty by preventing – through the consolidation of the anticorruption framework – the sanctioning of French companies by foreign judicial and regulatory authorities. The law also aims at avoiding leaking of strategic information and economic espionage when a foreign monitor is appointed.

Starting on June 1st, 2017, large French companies and foreign subsidiaries of French groups (over 500 employees and an average annual turnover over €100 million) have to implement mandatory compliance programs to prevent and detect corruption (code of conduct, internal reporting procedure, risk mapping, etc.).

Compliance with these provisions will be monitored and sanctioned by the new French Anticorruption Agency (AFA) – whose organization is somewhat clarified by the Decree of March 15, 2017 – endowed with increased resources and headed by judge Charles Duchaine. The AFA will have the power to impose injunctions and fines of up to 200.000€ for individuals and €1 million for legal persons.

An additional compliance-related penalty (monitorship) may also be imposed to legal persons convicted for offences of corruption or influence peddling.

If medium and small-sized companies do not yet fall within the scope of this compliance obligation, they are already subject to the implementation of internal reporting procedures.

Companies with over 50 employees will have to ensure whistleblower protection (broadly defined by the law) and implement graduated internal reporting procedures under the penalty of incurring civil or criminal liability. Companies will have to guarantee the anonymity of the whistleblowers and of the person identified as well as the confidentiality of information.

The “Sapin II” law also introduces into French law the possibility of signing a convention judiciaire d’intérêt public (‟French DPAˮ) – proposed by the Public Prosecutor before the initiation of criminal proceedings or by the investigating magistrate when an instruction is ongoing – for select probity offences [See on this topic “CJIP: the French DPAˮ].

The “Sapin II” law also provides a framework for lobbyists with the creation of a digital register of “interest representatives” (i.e., lobbyists) to the High Authority for the transparency of public life (HATVP). The draft Decree which has been leaked to the press, however, shows significant shortcomings. Interest representatives will have no obligation to mention their public statements, the names of parliamentarians met or the date of their meetings, and the information covered by the register would only be published once a year.

The “Sapin II” law finally prohibits all – direct or indirect – advertisements for high-risk financial products sent by email and likely to reach individual investors. Operators incur a fine of up to €100.000. The French Financial market authority (AMF) recently defined the categories of financial contracts covered by this measure (binary options, contracts for difference (CFD) and financial currency contracts (Forex)).

These new compliance obligations imposed on companies are part of a wider trend towards transparency and corporate accountability, as outlined by the enactment of the law No 2017-399 on the duty of care of mother companies on March 27 [See on this topic “Duty of care of parent and contracting companies law”].

Related content

La 32e chambre correctionnelle du tribunal judiciaire de Paris se prononce pour la première fois en matière de délit de manipulation de marché
7 July 2023
The Paris Criminal Court issues its first decision on a market manipulation case
On 25 May 2023, the Paris Criminal Court (32nd Chamber) ruled for the first time on the offence of market...
CumEx files
13 January 2022
CumEx files, from tax optimization to tax fraud?
A look back at the revelations of the "CumEx files" and key take aways on these practices of tax optimization...
Press review
Press review
22 September 2023
Press review – Week of 18 September 2023
This week, the Navacelle press review looks back at the adoption of the eighth version of the European Administrative Cooperation...
La Cour de cassation reconnaît à la justice française la compétence universelle dans le cadre de crimes commis en Syrie.
18 September 2023
French Supreme Court (Court de Cassation) recognizes the universal jurisdiction of the French judicial courts...
In two rulings handed down on May 12, 2023, the French Supreme Court (Cour de Cassation) clarifies the conditions under...
Press review
press review
15 September 2023
Press review – Week of 11 September 2023
This week, the Navacelle press review looks back at the decision of a Brazilian Supreme Court judge to overturn the...
Press review
Press review
8 September 2023
Press review – Week of 4 September 2023
This week, the Navacelle press review discusses the guide published by the European Commission for EU operators on the best...
Bastille day newsletter 2023
14 July 2023
Bastille Day Newsletter 2023
On this 14th of July, lawyers at Navacelle offer you, as it does every year, a selection of noticeable events...
Judicial public interest agreements (CJIP)
13 July 2023
[Infography] Focus on Judicial public interest agreements (CJIP)
Since its creation by the Sapin II law of 9 December 2016, the Judicial Public Interest Agreement (“Convention Judiciaire d’Intérêt...
Focus on the French financial markets authority activity (AMF)
13 July 2023
[Infography] Focus on the French financial markets authority activity (AMF)
The French Financial Markets Authority (“AMF”) intensive enforcement activity again demonstrates the regulator’s ambition to continuously strengthen market surveillance, through...
13 July 2023
[Infographie] Focus on the French data protection authority activity (CNIL)
Over the past months, the French Commission Nationale de l’Informatique et des Libertés (“CNIL”), regulator of personal data, imposed tremendous...
13 July 2023
Overview of arbitration case law
French case law rendered this past year has notably addressed the enforcement regime against assets frozen because of international sanctions,...
13 July 2023
AFA and PNF publish a guide to anti-corruption internal investigations
On 14 March 2023, the French Anti-Corruption Agency (“AFA”) and the French National Financial Prosecutor's Office (“PNF”) jointly published a...
13 July 2023
PNF updates its guidelines for judicial public interest agreements
In January 2023, the National Financial Prosecutor published its new guidelines on judicial public interest agreements, which are intended to...
13 July 2023
The French Supreme Court confirms in its decision “La Chaufferie de La Défense” that the...
In a decision dated 9 November 2022, the criminal chamber of the French Supreme Court confirmed its case law on...