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The French Anticorruption Agency's Sanctions Committee's first decision: An analysis

Maria Lancri (mlancri@squairlaw.com) is Attorney at Law for Squair in Paris, France.

The Sanctions Committee of the French Anti-Corruption Agency (AFA) issued its first decision on July 4, 2019.[1] Since mid-2017, the French Sapin II[2] law has required large French companies (i.e., companies incorporated in France with more than 500 employees or belonging to a group of more than 500 employees, and achieving a consolidated turnover of more than 100 million euro; also, French subsidiaries of foreign groups) to implement an anticorruption compliance program comprising eight items:

  • A code of conduct

  • A whistleblowing scheme

  • Risk mapping

  • Third-party due diligence

  • Accounting control procedures

  • Training program

  • A disciplinary system

  • An internal audit and evaluation mechanism[3]

The French Sapin II law was created in response to the OECD heavily criticizing France for failing to fight efficiently against corruption, although corruption offenses are part of the criminal code; other countries, like the US, have only guidelines issued by a regulatory body. Additionally, the AFA was created to prepare guidelines to assist both administrations and private companies in “preventing and detecting cases of corruption and influence peddling”[4] and related offenses. These guidelines provide companies with the AFA’s expectations of what a “good” compliance program looks like.

The Sapin II is a sort of experimentation:

  • No other law stipulates within the law the elements of an anticorruption compliance program; in other countries, this is being done through guidelines issued by the administration or prosecutors’ offices.

  • The law provides for a control of the viability of said programs and potential sanctions outside of any investigation or sanction of actual corruption cases. The AFA’s agents therefore have no other system of law to rely on or to compare with the French system.

Some French companies had already implemented an anticorruption compliance program prior to the Sapin II law, mainly when they added activities overseas like in the US or the UK, and were influenced by what other systems had developed. Others created their programs when the law was enacted.

Considering how new this requirement was for most companies, they had not yet fully developed their programs when the controls started.

The companies chosen for these controls have different backgrounds and are active in different markets. The AFA claims that the companies are selected to allow the agency to acquire a good knowledge of the French market. The AFA may also select companies when their behavior has been flagged.

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