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Five years ago, France enacted its anti-corruption legislation, Sapin II.1 The law introduced a number of important innovations, including the ability for companies to be offered and to negotiate a French-style deferred prosecution agreement (“DPA”) called a Convention judiciaire d’intérêt public (“CJIP”). On 26 June 2019, the Parquet national financier (“PNF”) and the Agence française anti-corruption (“AFA”) issued a first set of guidelines (“First Guidelines”) setting forth the conditions companies must meet to be eligible to enter into a CJIP.
The PNF has gained substantial experience since the First Guidelines were issued, as 12 CJIPs have been offered to companies and validated by the courts in the time since. On 16 January 2023, the PNF issued new guidelines (“New Guidelines”) whose objective is to ensure “transparency and predictability.”2 The good news for corporates is that the New Guidelines offer more protections for companies and their advisers who engage in discussions with the PNF. The bad news is that they also impose tougher penalty calculations. However, the New Guidelines outline the penalty discounts companies can receive from being proactive in cooperating with investigations, self-reporting wrongdoing, sharing findings of internal investigations, and having robust compliance programmes in place. It is evident that the New Guidelines are inspired by US the Department of Justice3 and UK Serious Fraud Office practices.
To help readers understand the New Guidelines, we provide an overview of key points and the impact of the New Guidelines on companies.
Engaging with the PNF
The New Guidelines encourage companies and their legal advisers to “get in touch with the PNF,” to have “informal discussions” with them, and to let them know “if they wish to benefit from a CJIP.”
The PNF has gone a step further than the First Guidelines by giving assurances that settlement discussions will be confidential even if no agreement is ultimately reached. The PNF is sending a clear message encouraging companies and their legal advisers to self-report wrongdoing.
The additional assurances provided suggest that sensitive information disclosed during the settlement discussions is less likely to be used against companies as the discussions will remain confidential. The New Guidelines make it clear that documents provided by the company to the PNF during settlement negotiations such as emails, accounting documents, presentations and notes taken by the company’s lawyers will not be added to the case file unless the company agrees.4
The Director of the PNF has made it clear that he wants there to be “reciprocal trust during the negotiation process.”5
Principle of “good faith”
The New Guidelines explain that “companies must demonstrate good faith” in order to benefit from a CJIP.6 Companies will demonstrate good faith if they:
Calculation of financial penalties
Under the First Guidelines, the fine that could be imposed on a company was capped at 30 percent of a company’s annual revenue over the last three years. The PNF calculated fines as a multiple of the benefit to the company from criminal conduct and the multiple was determined by a number of aggravating and mitigating factors. The First Guidelines, however, remained silent on the impact of each aggravating and mitigating factor.
The New Guidelines aim to increase transparency by providing additional information on the methodology used by the PNF when assessing financial penalties. The New Guidelines go further than the First Guidelines in two respects:
It will be important for companies to carefully and thoroughly identify and weigh the various cost-benefit considerations accompanying a decision to self-disclose wrongdoing. The New Guidelines make it very clear that companies that demonstrate good faith and are pro-active in identifying, disclosing and remedying any wrongdoing will benefit from substantial fine reductions.
Admitting the allegations
The PNF makes it clear in its New Guidelines that when a company “systemically contests” the facts and allegations, this can be interpreted as “a lack of desire to benefit from a CJIP which, in turn, is likely to lead to the PNF withdrawing the company’s eligibility to benefit from a CJIP.”8 Problematically, this language fails to appreciate the long term impact for companies on admissions that the PNF may require, especially the impact on ongoing litigation, future class actions and ongoing commercial relationships. It will therefore be a balancing act for a company and its legal advisers to consider the extent to which they should contest some allegations as companies will need to demonstrate to the PNF that they wish to benefit from a CJIP whilst protecting their long-term commercial interests.
Access to the case file
The New Guidelines make it clear that the PNF will determine on a case-by-case basis whether all or part of the documents of the case file should be made available to the lawyers representing the company. In making its decision, the PNF will consider whether giving access will prejudice the investigation. If access is given, the company or its lawyers will be entitled to make a copy. This is a key development as it will enable a company and its legal advisers to potentially have access to the case file much earlier than it currently would, and in turn will make companies aware of allegations against them and charges they may face.
If the CJIP is negotiated at the prosecution stage (“stade de l’instruction”), the parties that have been indicted or that have the status of assisted witness will have access to the case file9 and will be entitled to make a copy.
The New Guidelines indicate that “a few days” before the CJIP validation hearing will take place, the PNF will publicly disclose the date of the validation hearing and the name of the company which has been offered a CJIP. There is therefore likely to be more press interest during the validation hearing than previously. It will therefore be important for a company and its legal advisers to have developed an effective communications plan before any CJIP is finalised and validated.
The PNF has indicated that it expects companies to cover the costs incurred by the AFA for the time spent by experts assessing the company’s compliance programme.10 This is a new development which could lead to substantial costs for companies. Companies are therefore advised to have comprehensive and adequate compliance programmes in place and to invest in remedying any deficiencies identified during the CJIP negotiation process.
Coordination with foreign prosecuting agencies
The New Guidelines reiterate that the PNF will coordinate with foreign prosecuting authorities as needed, ensure that a “coherent” one-day global settlement is entered into, and that one comprehensive compliance programme is implemented which will be supervised by the French anti-corruption agency.11
In the New Guidelines, the PNF confirm that efforts will be made to ensure that companies are not prosecuted twice for the same set of facts (respect of the principle of ne bis in idem). If a CJIP is concluded and the PNF receives a request for mutual legal assistance for facts covered by the CJIP, the PNF will only provide the mutual legal assistance upon receiving assurances from the foreign prosecuting authorities that they will not to pursue the company for the same set of facts as those in the CJIP.
Though not legally binding, the New Guidelines provide much-needed clarity for companies seeking to resolve an investigation by entering into a CJIP. Among other things, the New Guidelines make it clear that a passive approach will be punished and that companies hoping to resolve investigations on favourable terms should perform thorough internal investigations, self-report wrongdoing and cooperate with the authorities.
The PNF has also sought to increase transparency and predictability with its New Guidelines and provide additional comfort to companies and their legal advisers to trust the French DPA negotiation process.
The New Guidelines overlap significantly with similar guidance issued by the US Department of Justice and the UK Serious Fraud Office, providing further evidence of the French commitment to joining the ranks of the US and the UK in fighting corporate corruption. The French authorities are sending a clear signal that France has and will continue to develop its white-collar enforcement capability, and that it will continue to actively enforce Sapin II.
Companies should be prepared for increased scrutiny in this aggressive enforcement environment.
1) Loi n° 2016-1691 du 9 décembre 2016 relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique, in force as of 1st June 2017.
2) Comments made by the Head of the PNF, Mr Bohnert, on 16 January 2023.
3) For additional information on developments in the United States, please read “More Cooperation Please: DOJ Revises Corporate Enforcement Policy to Encourage Even Greater Cooperation”.
4) p.11 of the New Guidelines.
5) Comments made by the Head of the PNF, Mr Bohnert, on 16 January 2023.
6) p.9 of the New Guidelines.
7) p.13 of the New Guidelines.
8) p.12 of the New Guidelines.
9) Article 114 of the Code of Criminal Procedure and p. 12 of the New Guidelines.
10) p.19 of the New Guidelines.
11) p.5 of the New Guidelines.