As previously mentioned, France has explicitly positioned itself as one of the key stakeholders in enforcing transnational bribery law at the international level in 2019-2020.
In addition, the country has been stepping up the prevention of and fight against corruption at the national level over recent years, as evidenced also by the data of the AFA report.
Verifications and sanctions
The report states that in 2019 in accordance with the powers given to AFA, the agency initiated:
1) 20 verifications of entities of the private sector, including:
- 3 global verifications (the verification of all areas of activity) of major French companies in the CAC 40 Index (Cotation Assistée en Continu);
- 12 verifications of specific areas of activity of the companies that operate in corruption-prone sectors;
- 5 verifications of the implementation of recommendations by the companies that were subject to verification in 2017-2018;
2) 16 verifications of public bodies and entities, including:
- 11 global verifications (1 central administration body, 2 key participants of the 2024 Olympics, 1 sport federation, 1 public entity, 1 foreign company, 2 regions, 2 departments, 1 public housing authority);
- 5 verifications of the implementation of recommendations;
3) 4 verifications of the implementation of court decisions in the public interest (Convention Judiciaire d’Intérêt Public, CJIP) made in 2018-2019.
Besides that, in 2019 it was the first time that the AFA Sanctions Commission took the decision to impose sanctions on an entity for not having adopted corruption prevention measures**.
The above-mentioned decision concerned the imposition of the maximum fine of 1,000,000 EUR on Sonepar because of its failure to implement the AFA recommendations made in the conclusion of a verification conducted in 2017. In particular, the agency stated that the company had not used the methodology of risk mapping recommended by it, had not provided its staff with the necessary indications in its code of conduct as to how they should have acted in conflict-of-interest situations, had not remedied the shortcomings of the accounting system, had not established an internal auditing system, and had not adopted necessary measures for assessing corruption risks that might arise both in the activities of the company and those of the third parties.
However, the decision of the Commission stated that the AFA guiding principles were not legally binding and could not be applied retroactively. Moreover, although the company did not follow the guiding principles, its programme complied with the Sapin II law. As a result, the decision to sanction Sonepar was eventually overruled.
Guidance and support
AFA also drafted a series of guidance materials in 2019, including:
- Practical guide to organising a corporate compliance system (Guide pratique relatif à l’organisation de la fonction conformité en entreprise);
- Directions on implementing court decisions adopted in the public interest (Lignes directrices sur la mise en œuvre de la convention judiciaire d’intérêt public), together with the National Financial Prosecutor’s Office;
- Guide to managing corruption risks in the public procurement cycle (Guide pour maîtriser le risque de corruption dans le cycle de l’achat public), developed with the support of the Department of Public Procurement and published in 2020;
- Practical guide to conducting anti-corruption verifications in the context of mergers and acquisitions (Guide pratique “Les vérifications anticorruption dans le cadre des fusions-acquisitions”), amended after public consultations and released in 2020;
- Practical guide for corporate gift and courtesies policy (Guide pratique sur les politiques cadeaux et invitations en entreprise), released for public consultations;
- AFA has also initiated the drafting of a practical guide to countering corruption in SMEs; in addition, it developed a booklet for SMEs on how to counter corruption, circulated to professional associations, some of which subsequently forwarded it to their members.
In 2019, two public bodies, the Ministry of National Education, Youth, Higher Education and Research and the Ministry of Armed Forces, reached out to AFA to receive the support in stepping up their efforts in countering corruption. They were provided with the assessment of corruption risks, also in the educational entities managed by the Ministry of Education.
AFA also mentions yet another time the advantages of introducing anti-corruption measures for the entities, including SMEs, which are not legally obliged to do so:
1) The liability for corrupt practices and the consequences of their employment are the same for all companies independently of their size, whilst the adoption of anti-corruption measures helps reduce the risks that employees resort to such practices;
2) An anti-corruption programme, which large companies are obliged to introduce, should provide for the due diligence assessment of the third parties; therefore, a company should establish a system of anti-corruption measures so that major clients and suppliers are more willing to work with it;
3) Financial services providers (banks or private investors) increasingly include the criterion of abiding by anti-corruption measures in the requirements applied to their clients or subjects of investment; as a consequence, the adoption of such measures becomes an imperative to receive funding;
4) Companies that conduct their activities in the international market may be accused of corruption by the authorities of foreign countries (for instance, the United States or the United Kingdom), meanwhile an effective anti-corruption system may help reduce the amount of fines.
In 2019, AFA took over the chairmanship of the released in 2020.
Besides that, based on the conducted verifications, AFA draw in its report some conclusions regarding the quality of introduction of anti-corruption measures in France.
1. The private sector – major trends:
- the management is increasingly involved in anti-corruption activities (although it still remains insufficient);
- certain measures of anti-corruption infrastructure, such as the adoption of a code of conduct, training and the establishment of internal channels for reporting acts of corruption are easier to implement compared with others, including the assessment and mapping of corruption risks and due diligence of the third parties. The latter are extremely important for ensuring stability of the corporate anti-corruption system, but they still suffer from methodological flaws in too many cases;
- the number of violations related to the failure to adopt anti-corruption measures and procedures is decreasing; at present, the shortcomings that are being detected concern in most cases the failure to abide by and implement these measures and procedures.
2. The public sector – major observations:
- low maturity of public bodies in terms of preventing and detecting corruption offences;
- the measures for preventing and detecting offences are isolated; often, they are neither fully implemented nor based on risk assessment;
- the restrictions and obligations related to the prevention of corruption, in particular, the prevention of conflict-of-interest situations, are unevenly fulfilled;
- the control over corruption risks is insufficient: 1) as a rule, risk assessment is applied to the functions of allocating EU funds, internal budget and accounting controls, whilst the assessment of other functions is rarely conducted; 2) few public bodies have adopted codes of conduct; 3) functions of internal control and/or audit in the public sector remain inadequate; 4) measures against fraud do not always take into consideration the risk of internal complicity.
*AFA was established in accordance with Law No. 2016-1691 of 9 December 2016 “On Transparency, Fight against Corruption and Modernization of Economic Life” (Loi n° 2016-1691 du 9 décembre 2016 relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique). The agency is subject to the authority of the French Minister of Justice and is responsible for the coordination of and control over the prevention of and fight against corruption, provision of guidance support to bodies and entities, and monitoring of the fulfillment of obligations to introduce anti-corruption measures by entities. It also participates in investigations into and prosecution for the violations of anti-corruption legislation.
**In France, the obligation to adopt corruption prevention measures is imposed on the entities whose number of employees exceeds 500 persons and whose annual turnover is more than 100,000,000 EUR. In the event that this obligation is not met, the following penalties may be imposed:
- The obligation to improve the anti-corruption compliance system within a certain period of time (up to three years),
- A fine: for natural persons (corporate management) – up to 200,000 EUR, for legal persons – up to 1,000,000 EUR.
- The information on inadequate anti-corruption measures adopted by an entity may be officially published by the AFA decision.