Last week, FRA Partner Yousr Khalil joined the panel ‘French DPAs and international cooperation’ during the first GIR Live Conference in Paris. Two years after the French anti-corruption law Sapin II came into force, speakers have shared interesting insights around the challenges and lessons learnt from their experience with the evolving French regulatory environment.
Below are some of the key insights from the three panels and keynote address of the conference.
The conference was chaired by Stéphane Bonifassi, Bonifassi Avocats, and Jonathan Mattout, Herbert Smith Freehills.
The first session examined changes and responses within the French investigation sphere, following the implementation of Sapin II law. Panel experts Karen Coppens, Dechert, Antoine Kirry, Debevoise & Plimpton, and Nicolas Brooke, Signature Litigation, discussed among other topics:
- The obligation for companies to investigate, under the Sapin II law and the challenge of defining the proportionality of such an investigation;
- The impact of culture and human factors in internal investigations;
- Employees’ rights and obligations to collaborate in an internal investigation and precautionary steps when conducting witness interviews;
- The potential expectation from French enforcement authorities to require companies to perform their own internal investigations, before or during the external investigation; and
- The impact of GDPR on internal investigations.
The timing of the conference and the topic of the panel were fortuitous, for later in the day French Anti-Corruption agency (AFA) issued its guidance on the elements required for obtaining a French DPA (CJIP), where it notes among other points the expectation from the companies to conduct an internal investigation before or during the external investigation.
The second session focused on the rise of the AFA, its missions and how those would be carried out. The panel, composed of Ludovic Malgrain, White & Case, Emmanuel Moyne, Bougartchev-Moyne, and Sophie Scemla who discussed in particular:
- The process and practical aspects of an inspection carried out by AFA;
- The rights of the inspected entities and how to properly anticipate a control;
- The AFA’s rights to request and obtain information in relation to an internal investigation and the threat to Privilege when Attorney work product is requested by the agency;
- The AFA’s duty to report to the public prosecutor and the difficulty for companies to understand whether AFA’s role is to assess the compliance program or to investigate; and
- The newly enforced extraterritoriality clause, allowing AFA to extend its inspection to foreign subsidiaries.
The last panel was composed of Yousr Khalil, FRA, Astrid Mignon-Colombet, Soulez Larivière & Associés, and Stéphane de Navacelle, Navacelle. They discussed different aspects of the French version of DPAs (CJIP) such as:
- The value of self-reporting to French authorities and the appropriate strategy and timing to do so;
- The conditions to be offered a CJIP and how companies can initiate the process;
- The framework of French monitorships, in comparison with FCPA monitorships;
- The implications of a settlement with multiple authorities; and
- The different criteria used by authorities to calculate penalties in multijurisdictional investigations.
More so than the first panel, the topic of the third panel was the essence of the recently released AFA guidance on the CJIP, which highlights the following important factors when considering the gain calculation and the related monitorships:
- A CJIP can only be offered to companies not to individuals;
- The amount of the penalty is capped at 30% of the annual average turnover for the three years preceding the date the breach or misconduct was identified;
- The inclusion of future profits not already recorded in the company’s account at the date of the CJIP in the gain calculation; and
- The duration of the monitorship that is set to a minimum of a 2 years and a maximum of 3 years except in case of conviction for corruption when the monitorship would last up to 5 years.
The final keynote speaker, Nicola Bonucci, Director for Legal Affairs, OECD, spoke about the changes observed since the implementation of the OECD Anti-Bribery Convention 20 years ago. In his address, he insisted on substantial progression of the perception of corruption issues and how such cases were handled, mentioning (i) the expectations and accrued scrutiny by media and the civil society, as well as (ii) the increased cooperation between jurisdictions. Nicola Bonucci then listed some future challenges, including the need for:
- Including new major economic players (in particular China);
- An effective implementation of the legislation;
- A better use of existing resources such as studies or researches; and
- A stronger focus on soliciting parties (the demand side) during investigations (that, to-date, account for 20% of cases only).
He also mentioned a revision of the Convention, which would consider those evolutions, and concluded by stating that the OECD, having identified those challenges, will face them in order to best reflect the changes of the global environment.
In a nutshell, as thoroughly demonstrated by the experts during this first GIR Live Paris, the rapidly changing French regulatory environment over the last two years keeps raising many challenges for companies, their counsels and advisers. For companies to navigate these challenging waters and proactively manage regulatory compliance requirements imposed by Sapin II through the AFA reviews, they must take a risk based, flexible approach to building and maintaining an adequate compliance program.
FRA is a global market leader working with our clients to identify, analyze, and mitigate the risks associated with international regulatory compliance obligations, litigation, internal and external multi-jurisdictional investigations. We offer extensive data privacy and protection and jurisdiction-specific experience such as blocking statute, banking secrecy, commercial secrecy, global privacy legislation and security risks, state sponsored and other hacking, leaks, data loss, and excessive data retention. Unlike traditional accounting firms, we operate purely in the forensic space and generally have no conflicts.