Analysis
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

Analysis
Lobbying : Declaration obligations of interest representatives in France
14 July 2022
Lobbying: Declaration obligations of interest representatives in France
Highlight on the disclosure obligations imposed on interest representatives in France, as provided for by Law 2013-907 of October 11, 2013, as amended by Law 2016-1691 of...
Publication
The Guide to Sanctions -GIR (2022)
10 July 2022
The Guide to Sanctions (2022) – GIR
Navacelle co-author of the third edition of the Global Investigation Review's Guide to Sanctions.
Press review
2 December 2022
Press review – Week of 28 November 2022
In this press review, you will discover several important judicial events: the French Supreme Court clarified the status of victim of an act of terrorism and the compensa...
Press review
Week of 21 November 2022
25 November 2022
Press review – Week of 21 November 2022
In this press review, you will discover the opening of a preliminary investigation by the French National Financial Prosecutor’s Office for misappropriation of public f...
Event
Ifaci demain en main - vignette
24 November 2022
Roundtable – Allegations – Investigations : The edges of tomorrow
Stéphane de Navacelle will participate in IFACI's annual conference: "Demain en mains" on the theme "Allegations - Investigations : The edges of tomorrow ", Monday 28 No...
Analysis
23 November 2022
The CJEU limits generalized data retention in surveillance
On 20 September 2022, the Court of Justice of the European Union issued two rulings concerning the conditions under which member states are allowed to retain traffic data...
Analysis
21 November 2022
Judicial Agreement of Public Interest for aggravated tax fraud laundering and illegal canvassing
Credit Suisse escapes prosecution and agrees to pay a public interest fine of 123,000,000 euros under the 13th deferred prosecution agreement concluded by the National an...
Press review
Week of 14 November 2022
18 November 2022
Press review – Week of 14 November 2022
In this press review, you will find three significant events: the first conviction in France of a former Liberian rebel leader by the Paris criminal Court; the sanction o...
Analysis
Autorité de la concurrence - Google
18 November 2022
Recent sanctions against Google by the French Competition Authority: ad servers and related rights
In 2021, the French Competition Authority imposed several fines on Google for anti-competitive practices related, on the one hand, to the remuneration of the related righ...
Event
17 November 2022
Identification of the contractual actors of Compliance
Julie Zorrilla participated in the Colloque "Contract and compliance: the actors and their strategies" at the University of Nîmes.
Analysis
17 November 2022
The cumulation of criminal and administrative sanctions in tax fraud
The judges of the Court of Cassation recently ruled on the cumulation of criminal and fiscal sanctions in tax fraud cases. This decision confirms the case law which permi...
Event
16 November 2022
Cambridge Forum: Mutual legal assistance has gone rogue!
Why bother with MLATs when local law is global and prosecutors trade information on WhatsApp ?
Press review
Week of 7 November 2022
14 November 2022
Press review – Week of 7 November 2022
In this press review, you will find clarifications from the Court of Cassation on the legality of an extradition of an EU national to another Member State, even in the ab...
Event
9 November 2022
Webinar: A comparative approach to professional secrecy and attorney-client privilege in criminal proceedings
Stéphane de Navacelle spokes at the Mondaq and Monfrini Bitton Klein webinar on "professional secrecy and attorney-client privilege in criminal proceedings".