15 Jun 2020
The prosecution of French companies by the U.S. for their business practices abroad has long been a sore point for some in France. Now, France’s top law enforcement official has released guidance suggesting that it could adopt an approach to corporate corruption and bribery championed by the country it once criticized.
The French Ministry of Justice this month sent a memo to prosecutors outlining how it plans to investigate and prosecute illegal bribes paid by French companies to secure business in foreign countries.
The techniques and tools outlined closely resemble the ones used for nearly two decades in the U.S., where prosecutors have tried to encourage companies to detect and voluntarily disclose allegations of bribery, and reward the ones that do with more lenient settlements and discounts on fines.
The memo even hints that French prosecutors may do exactly what many in the country found so controversial about the U.S. approach: They could prosecute foreign companies for misconduct in countries outside of France, even if the companies have only tenuous links to France.
The U.S.’s practice of prosecuting French companies has long riled members of France’s political and business establishments.
In the mid-2000s, the U.S. Department of Justice began actively enforcing the Foreign Corrupt Practices Act, an antibribery law that prohibits the payment of bribes by companies with ties to the U.S.
The enforcement effort wasn’t just focused on American companies. U.S. prosecutors secured hundreds of millions of dollars in fines against a number of French companies, including transportation company Alstom SA and oil and gas company Total SA .
Last year, a member of France’s parliament wrote a report that addressed the issue, arguing that France needed to develop legal tools to protect its companies from laws in other countries that target extraterritorial conduct.
Meanwhile, France has taken strides toward strengthening its own anti-corruption regime. The country created a dedicated unit of prosecutors to handle cases of major economic crime. It also passed a new anti-corruption law, known as Sapin II, which requires French companies or subsidiaries of a certain size to maintain compliance programs and internal controls to prevent crimes.
But the memo issued June 2, which was signed by French Minister of Justice Nicole Belloubet, may be the strongest signal yet that France is looking to start policing its own companies with tools popularized by the U.S.
“It’s a very important policy and political signal,” said Nicola Bonucci, a managing director at law firm Paul Hastings LLP in Paris. “The guidance is a way to say to the rest of the world, including to the U.S., ‘From now on the French are going to take care of [misconduct by] French companies.’”
By Dylan Tokar, The Wall Street Journal, 12 June 2020
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