Enacted in December 2016 in France, the Sapin II Law came in the wake of a series of robust and well-known anti-corruption legal frameworks in other countries, such as the Foreign Corrupt Practices Act in the US (1977) and the UK’s Bribery Act in 2010. The fourth anniversary of Sapin II’s entry into force is an opportunity to look back on some of the concrete, significant changes it has ushered in, as well as the likely coming developments in the regulatory environment.
A new approach to corporate compliance programs
The Sapin II Law significantly changed France’s legal approach to corporate compliance programs by requiring companies or groups of companies of a certain size incorporated or headquartered in France (“affected companies”) to implement a specific internal compliance program.
This compulsory internal compliance must be designed to prevent and detect the commission, in France or abroad, of corruption and influence peddling, and the law requires companies to implement:
- a specific code of conduct
- an internal whistleblowing system
- risk mapping
- due diligence procedures regarding clients, first-tier suppliers and intermediaries
- accounting control procedures
- regular training sessions for employees
- a disciplinary system to sanction breaches of the code of conduct and
- an internal control and audit process of the anticorruption program.
Sapin II also created a new authority, the French Anticorruption Agency (AFA), to advise stakeholders involved in the prevention and detection of breaches of probity, monitor Affected Companies’ compliance with the anti-corruption compliance program requirements, and sanction those deemed non-compliant.
Like both the American and British authorities, the AFA releases guidelines – originally issued in 2017 and updated in January 2021 – which lay out the AFA’s expectations for an effective compliance program and provide additional guidelines and practical tools.
Between June 2017 and December 2020, the AFA conducted 125 audits, including 84 audits of private entities. To date, only two of these audits have resulted in an official referral to the AFA’s Sanctions Committee; only one has led to the imposition of an administrative sanction. Such sanctions can be as high as €200,000 for individuals and €1 million for legal entities. The relatively low number of sanctions imposed by the Sanctions Committee so far is likely due to the recent entry into force of the law and a certain leniency on the part of the AFA's agents during the first wave of audits.
The most recent guidelines published by the Agency in January 2021, notably, mark an end to this grace period and reveal that the AFA’s expectations regarding the adequacy and effectiveness of anticorruption compliance programs are now higher. Foreign companies in particular should pay close attention the requirements of the Sapin II Law, because these may apply to their French subsidiaries (and their own subsidiaries, French or foreign).
New reporting channels, closer collaborations, new form of settlement
While the AFA is not competent to prosecute and sanction companies or individuals for criminal wrongdoing, article 40 of the French Criminal Procedure Code requires AFA agents to refer to the relevant prosecutor’s office instances of non-compliance with Sapin II uncovered through whistleblower reports or audits conducted by the AFA. This provision means that these audits are new reporting channels for often complex and concealed criminal offenses.
The AFA also intends to work closely with other French enforcement authorities, as illustrated by the cooperation protocols it executed with the French Financial Markets Authority, the High Authority for the Transparency of Public Life, and the National Financial Prosecutor's Office (PNF).
These developments are part of an unprecedented evolution of the white collar criminal enforcement landscape in France, which has resulted in greater collaboration with foreign enforcement authorities (as illustrated notably by widely reported multijurisdictional cases handled by the PNF, the US Department of Justice and/or the UK’s Serious Fraud Office) and the introduction into the French legal system of a new form of criminal settlement available to legal persons, the Judicial Public Interest Agreement (CJIP), in large part inspired by American and British deferred prosecution agreements.
The CJIP allows a company, in certain cases and subject to judicial approval, to settle criminal charges in exchange for payment of a public interest fine to the French Treasury (up to 30 percent of the average annual turnover of the legal person based on the last three years of income); implementation – at the company’s expense – of a compliance program under the supervision of the AFA for a three-year period; and compensation of the loss incurred by the potential victims of the offence within one year. The scope of the CJIP was recently extended by a law enacted in December 2020 allowing settlement of environmental offenses.
To date, 12 CJIPs have been ratified, including seven to settle charges of corruption or influence peddling with settlements ranging from €420,000 to €3.6 billion, which is greater than any prior court judgment.
A stronger, broader arsenal
While some uncertainties remain, such as the liability of individuals who do not fall under the scope of CJIP, the Sapin II Law and the guidelines published by the AFA provide French law with a comprehensive anti-corruption framework. Drawing on the American and British models, France has significantly strengthened and broadened its prevention and enforcement arsenal for the fight against cross-border economic and financial crimes.
Learn more about the implications of the Sapin II Law and the AFA’s guidelines by contacting any of the authors or your usual DLA Piper attorney.
 Law No. 2016-1691 of 9 December 2016 on transparency, corruption and modernization of the economy
 Provisions of article 17 applies to (i) any company based in France with at least 500 employees and an annual turnover of more than €100 million as well as (ii) any company belonging to a group of companies that employs at least 500 employees worldwide, but whose parent company is headquartered in France and with a consolidated turnover of more than €100 million
 Article 17, 3° of the Sapin II Law
 French Anticorruption Agency, Guidelines to help Public and Private Sector Entities to Prevent and Detect Bribery, Influence Peddling, Extorsion by Public Officials, Illegal Taking of Interest, Misappropriation of Public Funds and Favoritism, January 2021
 AFA, Annual report 2020, page 20
 Decision No. 19-01 of 19 July 2019 and decision No. 19-02 of 7 February 2020
 To be implemented, a CJIP requires an order from a judge, validating the agreement between the company and the prosecution. The judge's validation order of the CJIP does not require an admission of guilt from the company and does not have the effect of a conviction. Therefore, the CJIP will not appear in the criminal record of the company. However, the validation order, the amount of the public interest fine and the CJIP are published on the websites of the Ministries of Justice and Budget.
 The Sapin II Law initially limited the scope of the CJIP to corruption, influence peddling, tax fraud and money laundering.