Settlement opportunities in France: Change on the horizon?

Dan Benguigui

Legislation recently (or about to be) adopted in France will strengthen the French legal systems’ opportunities to settle white collar investigations.

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The “Sapin II” Bill

Named after France’s Minister of Finance, Michel Sapin, the bill adopted by France’s National Assembly on 14 June 2016 and currently examined by the Senate, will introduce a new type of settlement for entities under investigation for corruption, influence peddling, and related offences. Inspired by the US (and, more recently, UK) practice of entering into Deferred Prosecution Agreements, the new ‘public interest judicial agreement’ (convention judiciaire d’intérêt public) will allow firms to settle corruption charges brought against them in France, by agreeing to:

  • a criminal fine (amende pénale d’intérêt public) of up to 30% of the company’s average annual turnover over the past three years.
  • implementation of a compliance program aimed at preventing and detecting acts of corruption, under the watch of the newly-created French “National Anti-corruption Agency” (Agence Nationale Anticorruption), inspired by the US FCPA monitoring program; and
  • indemnification of victims for harm suffered within a one-year period.

These measures do not, however, preclude victims from pursuing the firm for civil damages.

Public interest judicial agreements would not constitute a criminal conviction for a firm and would not appear on the criminal record in France. However, there is still likely to be some publicity around these agreements (as is the case in the US and the UK). Any settlement, including the identity of the parties concerned and the amount of the fine would be published on the National Anti-Corruption Agency’s web site.

 

The Market Abuse Bill

shutterstock_315886463On 21 June 2016, France adopted a new Market Abuse Bill, shortly before the implementation of the new EU Market Abuse Regulation on 3 July 2016. This bill revamps France’s administrative settlement (composition administrative) procedure for market abuse investigations led by the French markets regulator (the Autorité des Marchés Financiers, or AMF). The Market Abuse Bill opens the door to new settlement opportunities for small-scale market abuse cases, which may include insider trading, market manipulation and unlawful disclosure of inside information.

The Market Abuse Bill aligns the treatment of AMF investigations with that afforded to the most serious market abuse cases which are handled by French criminal authorities (where the accused may settle the case by way of a criminal guilty-plea, or comparution sur reconnaissance préalable de culpabilité).

 

Next steps and more information

The white collar crime team at Allen & Overy Paris is closely monitoring the progress of the Sapin II and Market Abuse Bills and their practical impact on white collar investigations. Please do not hesitate to get in touch if you would like further information.

 

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