French Government to introduce Deferred Prosecution Agreements?

UPDATE: The bill was presented at a ministerial council at the end of March 2016, but without the provisions relating to DPAs, due to opposition from the Council of State. It is possible that, during the parliamentary debates to come, representatives could seek to reintroduce provisions to allow DPAs in France.

The French Government continues to work on a new anti-corruption bill. The law would provide for an independent anti-corruption State Agency, increased protection for whistleblowers and a national online register for lobbyists.

To the surprise of many observers, a new kind of sanction has apparently also been introduced into the bill in January 2016. A kind of “Deferred Prosecution Agreement” (DPA), as exists in the United States, the Netherlands, Switzerland, Great Britain and Germany, will form part of the bill to be presented at France’s Council of Ministers on 23 March 2016. To date, no written draft of the bill has been made public but some pieces of information have been leaked to the French press.

What might a French DPA look like?

The form of DPA apparently being considered would allow companies to pay a fine, instead of being prosecuted, if they are suspected of corruption. According to unofficial sources, the fine could be up to 30% of an average of the annual turn-over of a company over the past three years. The company would also have to implement internal compliance program improvements. These would have to be supervised by a monitor, who would either be independent or from the future French State Agency against corruption. Companies would therefore avoid a criminal sanction - if all parties to the proceedings accept the DPA. The fine would have to be approved by the French Prosecutor and its content would be published on a public website.

It is not yet known whether individuals will be able to enter into DPAs, or whether they will be reserved for corporate defendants as is the case in the UK. Regardless of this, if a company enters into a DPA, criminal sanctions could still be imposed upon individuals such as the senior executives of the company.

French law already contains a mechanism which allows companies to negotiate their fines with criminal courts (“comparution sur reconnaissance préalable de culpabilité”, article 495-7 and following of the Criminal Code). This provision was approved in 2004 and held to be constitutional by the French Constitutional Council in decision QPC no 2010-77, dated 10 December 2010, “Mme Barta Z”. However, in addition to being too slow and complex, this procedure still involves the company being convicted, which can result in it being excluded from public procurement contracts in many countries and greater reputational damage. The same procedure has also existed since 16 October 2015 (law no 2014-896 dated 15 August 2014 and decree no 2015-1272 dated 13 October 2015), but only for minor offences in order to avoid over-burdening the courts.

Introducing DPAs for major offences would therefore represent a major change for international companies. It would also bring the possibility of significant change to France’s enforcement of criminal law: France has not convicted a single company for corruption of foreign public officials in the last 15 years, though some of France’s biggest international companies have paid huge fines in the United States for such offences. The bill still has a way to go, but a feeling that the US is profiting through France’s lack of enforcement activity may drive reform and help bring anti-corruption enforcement home to France.

UPDATE: The bill was presented at a ministerial council on 30 March 2016, but without the provisions relating to DPAs, due to opposition from the Council of State on 24 March 2016. During the first parliamentary debates, representatives reintroduced provisions to allow DPAs in France. See our article “French Bill Sapin II” for further information on these new provisions.