NDS Anticorruption

September 3rd, 2020

The “Sapin 1” law, enacted in 1993, aimed to reinforce anti-corruption measures albeit limited to the extent of French territory. In December 2016, the “Sapin 2” law was enacted, creating provisions allowing to tackle corruption on an international scale.

As such, “presidents, chief executives and managers of a company employing at least 500 employees, or belonging to a group of companies of which the parent company has its registered office in France and employs at least 500 employees, and whose turnover or consolidated turnover exceeds 100 million euros, are required to adopt measures aiming to prevent and detect the commission, in France or abroad, of acts of corruption or trading in influence (…)”.

These provisions impact companies directly under the scope of this legislation… and indirectly affect those who wish to ensure voluntary compliance as part of a more proactive approach. 

In the face of probity requirements, companies are required to implement on an internal level a coherent anti-corruption compliance program comprised of at least 8 components: 

1. A code of conduct defining and illustrating the various types of prohibited behaviours potentially constitutive of acts of corruption or trading in influence. The code of conduct, incorporated into the company bylaws, is subject to the consultation procedure by employee representatives;
2. An internal whistleblowing mechanism allowing the gathering of reports by employees of potential conducts or situations conflicting with the code;
3. A risk assessment map, regularly updated, identifying, analysing and ranking the company’s risk exposure to external requests for corruption purposes;
4. Evaluation procedures of clients, first-rank suppliers and intermediaries with regards to the risk assessment map;
5. Accounting control procedures, both internal and external, tracing facts of corruption or trading in influence;
6. A process of employee training for executives and employees which are most exposed to risks of corruption or trading in influence;
7. A disciplinary regime allowing to sanction employees in the event of a breach of the code of conduct;
8. An internal control and evaluation procedure of implemented measures.

Notwithstanding presidents, chief executives and managers, the company itself is liable as a legal entity, and incurs significant penalties. In the event of an infringement, the disciplinary commission of the Agence française anticorruption has the power to enact:

• An administrative penalty towards the company, ranging from a warning to an injunction;
• A financial penalty, of which the amount can reach a maximum of 200,000 euros for private persons and 1,000,000 euros for legal entities.

As a reminder, the legislator has planned that the act of resisting the effective implementation of an anticorruption program is punished by a 2 year sentence of imprisonment and a 50,000 euros fine for directors… and by a fine reaching up to 1,000,000 euros or double the benefits made from the corruption practices for legal persons.

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Company culture on this subject, at the heart of current concerns, should therefore be in line with legal and regulatory requirements. Moreover, boards of directors should seize these matters and ensure the compliance of implemented programs. 

For any further questions or to accompany you in these steps:

Florence Achache, Partner: fachache@ava-law.com 01 53 53 47 53

Alexia Germont, Partner: agermont@ava-law.com 01 53 53 47 53 

Nicolas Valluet, Partner: nvalluet@ava-law.com 01 53 53 47 53