Articles

A Rule of Law Webathon

Lawyers Around the World
Around the Clock for the Rule of Law
A Rule of Law 24-hour Webathon – 4/5 May 2021

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The Rule of Law is not merely the stock and trade of lawyers. It is our core value, the fulcrum of our profession and the polestar of our activity.  It is the social fabric that undergirds human rights, democratic principles, economic opportunity, social development, and the fundamental freedoms we all recognise as self-evident.  And with the world now facing unprecedented challenges, lawyers remain the first line of defence against efforts to undermine, circumscribe, or defeat the Rule of Law.  To underscore the critical importance of that mission, and the unwavering commitment shared by lawyers around the world, we have chosen to come together in an extraordinary way.

Three of the world’s major international lawyers’ associations — AIJA HRC (Association Internationale des Jeunes Avocats Human Rights Committee), UIA IROL (Union Internationale des Avocats Institute for the Rule of Law), and ABA SIL (American Bar Association – Section of International Law) – have joined forces to launch the first 24-hour Webathon in defence of the Rule of Law.

We are proud to present a continuous series of two-hour panel discussions that will move like the sun across the planet, spanning continents and time zones. 

Each panel will address a different aspect of the challenges faced by the Rule of Law and will be hosted by a leading bar or international law association,  including: the Law Society of England and Wales, the Barcelona Bar Association, Barra Mexicana de Abogados, the Inter-American Bar Association, the American Bar Association, the California Bar Association, the Law Council of Australia, LAWASIA, the NUPL (Philippines), the Society of Indian Law Firms, the Bar Association of India, the Deutscher Anwaltverein, the Warsaw Bar and the Paris Bar.

TheWebathon will roll from 2:00 PM GMT on 4 May through 2:00 PM GMT on 5 May.

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The last panel will be hosted by the Paris Bar and will take place on May 5, 2021 from 2:00 to 4:00pm (CEST). It will be held in French and in English and will be translated live. It will focus on the issue of justice amid military conflict, particularly on whether the Rule of Law goes out the Window in times of war.

Programme of the Paris Bar panel:

Moderator: Stéphane de Navacelle, AIJA HRC Co-Chair; Former Member of the Paris Bar Council (Co-Président du Comité des droits de l’homme de l’Association internationale des Jeunes Avocats (AIJA); Ancien membre du Conseil de l’Ordre des Avocats de Paris).

Speakers:

  • Marie O’Leary, Counsel, International Criminal Court (Avocat, Cour pénale international);
  • Matthieu Bagard, Paris Bar Attorney, Avocats Sans Frontières France Secretary (Avocat au Barreau de Paris, Secrétaire, Avocats Sans Frontières France) ;
  • Ghislaine Doucet, Doctor of Law, specialized in international humanitarian law, terrorism and international criminal law, Senior Legal Advisor to the ICRC Delegation in France (Docteur en droit, spécialisée en droit international humanitaire, terrorisme (DIH) et en droit international pénal, Conseiller juridique principal de la Délégation du CICR en France) ;
  • Amélie Férey, Postdoctoral researcher (CERI), IRSEM resident (Chercheuse postdoctorale au Centre de Recherches Internationales de Sciences Po (CERI), résidente à l’Institut de Recherche stratégique de l’École Militaire (IRSEM)).

Closing remarks: Olivier Cousi, President of the Paris Bar (Bâtonnier du Barreau de Paris).

GMT

Local time/date

Local organization

Panel

14:00

 

15:00 – 17:00
(BST) – May 4

Law Society of England and Wales

Panel # 1 – Rule of Law Colloquium: Why Is the Rule of Law Relevant Today and What Can We Do to Protect it?

16:00

18:00 – 20:00
(CEST) – May 4

Barcelona Bar Association

Panel # 2 – Gender Equality and the Rule of Law: Two Sides of the Same Coin.

18:00

13:00 – 15:00
(CDT) – May 4

Inter-American Bar Association – IABA

Panel # 3 (in Spanish) – Rule of Law and Democracy: Challenges of Fragile Systems in the Americas (Venezuela, Argentina, Mexico and Others)

20:00

16:00 – 18:00
(EDT) – May 4

American Bar Association, International Law Section

Panel # 4 – Developing Strategies and Programs to Support the Rule of Law.

22:00

15:00 – 17:00
(PDT) – May 4

California Bar Association

Panel # 5 – Attorney Discipline and the Independence of the Bar: Should Courts Play a Role?

00:00

10:00 – 12:00
(AEST) – May 5

New South Wales Council for Civil Liberties

Panel # 6 – Black Lives Matter: an Australian Perspective.

2:00

11:00 – 13:00
(JST)
10:00 – 12:00
(CST) – May 5

LAWASIA

Panel # 7 – Electoral Democracy and the Rule of Law.

4:00

12:00 – 14:00
(PHST) – May 5

National Union of Peoples’ Lawyers (NUPL, Philippines)

Panel # 8 – Persecution of Lawyers by State Actors: The Role of the International Bar.

6:00

11:30 – 13:30
(IST) – May 5

Society of Indian Law Firms (Silf) & Bar Association of India

Panel # 9 – Corporate Social Responsibility: Changing Perspectives to recognize Rule of Law and Human Rights as Essential Components of Good and Fair Business Environment.

8:00

10:00 – 12:00
(CEST) – May 5

Deutscher Anwaltverein

Panel # 10 – Access to Justice for Refugees During COVID – past, present and future.

10:00

12:00 – 14:00
(CEST) – May 5

Warsaw Bar

Panel # 11 – The Role of Lawyers in Protecting the Judiciary.

12:00

14:00 – 16:00
(CEST) – May 5

Paris Bar
Barreau de Paris

Panel # 12 (in French) – Justice Amid Military Conflict: Does the Rule of Law Go Out the Window in Time of War?

Justice et conflit armé : L’Etat de droit passe-t-il à la trappe en temps de guerre ? (en français)

Recent developments on corporate criminal liability in France and EU legal cooperation in cross border investigation

Recent developments on corporate criminal liability in France
and EU legal cooperation in cross border investigation

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On April 20, 2021, Julie Zorrilla and Stéphane de Navacelle spoke to recent developments on successor company corporate criminal liability, Plea Bargaining and DPAs in France as well as EU legal cooperation in cross border investigation at the invitation of the American Bar Association International Criminal Law and International Anti-corruption committees.

Stéphane de Navacelle: For this presentation, we thought we would address three issues which are relevant for our group.

(i) The first one is a decision by the Supreme Court when it comes to the criminal liability transfer of the surviving entity. Up until this recent decision, the liability would die with the corporate and very often, we would find ourselves in challenging positions in criminal procedures, keeping corporate entities artificially alive or for the purpose of the investigation, so we didn’t seem as if we were trying to elude liability. Now the situation is much clearer, in the sense that it will not have any effect on criminal liability. You can find that in the compliance programs expectations – when it comes to the due diligence that is warranted in M&A – which are set forth by the French Anticorruption Agency, it really opens a whole new area of concern for practitioners and we can see it shift, to quite some extent, from the investigation defence work to M&A anticorruption compliance checks.

(ii) The second issue is one of concern for anyone working on plea deals in France. It concerns the rejection of plea deals for individuals by a Paris court in a prominent corruption case, while the DPA for the corporate was approved by the homologation judge. That refusal to homologate cannot be appealed. In effect, the PNF has lost a lot of its bargaining power. It does tell you something about judges’ lack of approval of these very recently introduced plea deals.

(iii) The last issue is a new example of the effective use of EU legal cooperation mechanism to dismantle crypto-network EncroChat.”

 

I.  Criminal liability transfer in case of a merger and acquisition of a public limited liability company

Stéphane de Navacelle: “On November 25, 2020, the French judicial Supreme Court ruled that in the event of a merger by acquisition of a public limited liability company, the criminal liability of the acquiring company could be incurred for acts committed by the acquired company before the merger. It is however expected that it will be broader than just that.”

The acquiring company can only be condemned to a financial sanction such as a fine or asset forfeiture.

Except if the merger is solely designed to avoid criminal liability of the acquired company, financial sanctions may be combined with additional sanctions (dissolution of the company, ban from public procurements, etc.).

“It really enhances the need for proper due diligence. We have seen case law increase and geographically move to investments that took place in Africa post 2008-2010 crisis, when there was a rush of growth and probably insufficient due diligence. That’s sort of coming back to bite those investors who likely overpaid if the turnover was allowed thanks to inappropriate payments or fraud.

The decision is a landmark in France because in many ways, it breaks with the traditional view of corporate criminal liability. It is surviving the death of the corporate. It’s creating a system that is really distinct from physical people as compared to moral entities.”

Key takeaways: Specific caution and due diligence.

 

II. Rejection of plea deal by French court in a prominent corruption case

Julie Zorrilla: “We would like to talk about another recent French caselaw in white collar crime.

In a recent matter dated January 26, Vincent Bolloré, one of the richest businessmen in France, appeared before a Homologation Judge to homologate a plea deal and settle allegations of corruption and embezzlement involving public procurement contracts in Togo.

Before going into details regarding the facts and events of this case, I would like to give you some context regarding the applicable legal framework in such context.

As you may know, French criminal law does not have a very long-standing tradition of negotiated justice. Basically, in France we currently have a French guilty plea and a DPA.

The French guilty plea (“Comparution sur Reconnaissance Préalable de Culpabilité” or “CRPC”) was first introduced in 2004 for minor offenses. It then was broadened in 2011 for a wide scope of criminal offences, including white-collar crimes. The French guilty plea is applicable to both natural and legal persons and allows a defendant, in exchange of his acknowledgement of guilt, (1) to strike a deal with the Prosecutor and (2) to be offered a reduced sentence (which cannot exceed half of the prison sentence incurred, nor can it be more than 3 years). Once the Prosecutor and the defendant agree on a sentence, the CRPC agreement must be homologated by a Judge.

This guilty plea is and will be over time, more and more used alongside the French DPA. The French DPA which stands for “Convention Judiciaire d’Intérêt Public”, or “CJIP” was implemented in 2016 by the Sapin II Law. It is a mechanism applicable only to companies in cases of offences against probity. Indeed, if a CJIP can bring an end to legal proceedings initiated against legal persons for probity offences, private individuals (such as current or former executives or employees involved in the allegations) can still find themselves criminally liable before French Courts for the same offenses.

The procedure of CRPC thus appears to be an alternative to a traditional court hearing for these private individuals when the legal entity carries out an internal investigation in order to conclude a CJIP which, according to the guidelines of the French National Financial Prosecutor Office (“PNF”), must establish individual liabilities. 

In the case at hand, this is exactly what happened: the CRPC of Vincent Bolloré was negotiated while his companies settled a CJIP.

This case is very interesting as after having Mr. Bolloré publicly acknowledge his guilt in Court before the Homologation Judge, the Judge refused to homologate the CRPC agreement as he held that the conduct of Mr. Bolloré “seriously undermined the public economic order” and “undermined Togo’s sovereignty”. Thus, according to the Judge, this conduct warranted a public trial.

As the Judge refused the homologation, the case will consequently be referred to trial.

In principle, if a CRPC fails to succeed, the Parties are not allowed to report any information about the CRPC procedure during a subsequent trial.

However, and due to (1) the high-profile nature of the defendant, (2) the fact that the Homologation hearing, and (3) the fact that the acknowledgement of guilt was widely reported in the press, one can wonder how the Judges at the subsequent trial, could ignore these elements when judging Mr. Bolloré.

As we must explore all possible options with our clients, we thought that it could be interesting to share with you this case law. Thus, it should be kept in mind that there is a risk to a public acknowledge of guilty when negotiating a plea agreement in France.”

Key takeaways: Take this risk into account when negotiating a plea agreement in France and explore all possible options.

Stéphane de Navacelle: “Thank you Julie. I think when you look at it from a US perspective, it must be mesmerizing to think that all the work that you have done, your investigation as a lawyer for the corporate and so on, can virtually be set aside by an independent judge down the road.

We are dealing with one of the wealthiest individuals in France who has an empire, as we say it in France, in transportation and media and controls a great number of major ports in West Africa and therefore goods going in and out, and so on. (…) The maximum fine for an individual under the statute was 375,000 €, a very limited amount given net worth, who was worth several billions. We have mentioned in the past how these laws are very recent and there is very little case law to turn to. The judges generally feel that there is, in this criminal law compromise, compromission, i.e., something ugly.

Here, they agreed to a deal, they had run a deal with the judge who was on board with the homologation. There was probably a large pressure on the judge not to approve ultimately the deal which may have led to him recusing himself. This also poses a real issue from an ethics perspective. If you knew before going in that you were going to refuse the deal, was it  ethical in terms of due process when you know that the individuals are going to have to face trial after conceding to guilt.

But, ‘voilà’, France is learning the hard way from Mr. Bolloré. It’s not because you have a very clear policy coming from the highest authorities in France that you will have every judge on board with your plan. This is something that we repeatedly warn our clients about when we start working on these deals, but now we have a perfect case to point to. In a cross-border context, I think this is much less likely and it sort of refers back to the fact that we adopted in 2016 our own FCPA, ‘Sapin II’, really to make it as a useful tool in cross-border contexts.”

Question: “Ordinarily in the United States, the prosecutor will speak for the plea bargain. Did they speak in this case? Did they argue forth?

Stéphane de Navacelle: “Yes they did. Because of the substitution of the homologating judge, the PNF himself – the head of the national financial prosecutors – came to defend the deal at the hearing. Instead of having one of his deputies do that as it would ordinarily be the case. As Julie mentioned, this decision cannot be appealed. The PNF did not appeal but attacked the decision as an abuse of power. So basically, it’s a prosecutor challenging the decision before the Supreme Court.

The prosecutor’s challenge relies on the facts that the homologation decision of the DPA, refers to the entire deal, including the CRPC – the plea bargaining – for Mr. Bolloré and the two other individuals. It reflects that it is likely that the judge changed the ruling part of the decision but not the description. It’s on that basis that the prosecutors are appealing the approval decision, that it is an abuse of power because the three plea bargaining of the individuals and the DPA were part of a global package. Obviously, no law provides for a global package. It will be interesting into seeing how the Supreme Court will navigate between legal rational and realpolitick.

 

III. Effective use of EU legal cooperation mechanism lead to dismantling of crypto-network EncroChat

Stéphane de Navacelle: “Some of you may have seen we now have an operational European prosecutor who was an amazing anticorruption Romanian prosecutor. She has announced that she will be operational on June 1st with several prosecutors from each of the EU countries involved (…).”

“We thought it would be interesting for us, from a procedural point of view, to talk about the EncroChat case, which anyone in the UK knows about quite well. Encrochat is an encrypted mean of communication allegedly used solely by criminal organizations. Basically, Encrochat does what Signal and Telegram do, but with the hardware as well. Basically, if you use their hardware as well as their software, you will have the encryption in the hardware, so the enforcement authorities or whoever wants to access your information first has to actually access the hardware before the information is deleted from the hardware, which is almost impossible.”

The Encrochat servers were based in France and the French authorities were able to hack the EncroChat encrypted network which was hosted on servers located in France, through obtaining a device before everything was deleted from it. The product of that led to hundreds of arrests because thousands of phones were used in the UK, mostly by drug dealers. In effect, the gendarmerie was recording to all of those conversations live.

Key takeaways: Hundreds of successful and coordinated arrests in several countries.

We have been involved in one of the numerous cases, trying to deconstruct, in a sense of trying to understand how the corporation worked. This is still a developing matter so we don’t know exactly know what is going to come out of it. What is certain is that at least one UK Court has approved the way that the cooperation between the Europeans authorities worked. In this instance, the hacking of the EncroChat encryption network resulted from a joint effort from French and Dutch authorities which formed a Joint Investigation Team (JIT) between judges, prosecutors and law enforcement authorities. These JITs are put together for specific purposes and for a limited period of time and they are supported by agencies such as Europol and Eurojust to provide logistical support.

Our sense is that one of the consequences of this is that due process and the rights of the defence have been trampled in a way. This obviously raises a lot of concern amongst the European defence bar. In this specific matter, the UK judge considered the fact that the French authorities accepted the way the information was collected as appropriate. If it was good enough for the French, it was good enough for them. But the French were not using it in French courts. The phones were not used in France so they did not have the same obligations in terms of due process.

The UK issued a European Investigation Order (EIO) to France in 2020 to obtain evidence already collected as part of this EncroChat investigation. It is a judicial decision which has been issued or validated by a judicial authority of a Member State to have one or several specific investigative measures carried out in another Member State to obtain evidence in an ongoing criminal investigation.

Key takeaways: usefulness of this legal cooperation mechanism to conduct efficient and speedy investigations in the context of cross-border crime.

We see here a trend that is similar to the one we have seen in the European arrest warrants, where because the request comes from another EU country, the diligence and the due process pros are virtually – ‘voided’ would be too strong – impeded upon. That’s extremely worrisome.

ABA International Criminal Law Committee monthly Call, 20/04/2021

Press release – Leading White Collar Firm Navacelle Becomes First French Law Firm to Adopt Theolex

Press release
Leading White Collar Firm Navacelle Becomes First French Law Firm to Adopt Theolex

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PARIS. Theolex, a French legaltech startup that uses artificial intelligence (“AI”) to develop legal analytics for cross-border investigations, announced today that leading French white-collar boutique Navacelle has signed up to be its client, becoming the first French firm to do so.

Theolex, which was initially an innovation project at Société Générale (“SG”) in Paris, signed its first contract with SG in February 2020, and with global law firm Mayer Brown LLP in October 2020. Martine Dolladille, the founder of Theolex stated: “We are thrilled to have Navacelle become the newest client of Theolex. Since its inception in 2010, Navacelle has become one of the leading white collar and compliance practices in France, and we look forward to working with Navacelle lawyers in developing this evolving technology even further.”

Stéphane de Navacelle, Founding Partner stated: “We are thrilled to work with Theolex to help deliver data-driven analytics in our client advocacy, especially in the cross-border investigations space. We are especially pleased to be working with a legaltech that was developed in France, and uses tomorrow’s technology to help us offer innovative legal services to our clients globally.” Stéphane de Navacelle is one of the leading experts in France in internal investigations, has authored the Paris Bar report on ethical guidelines for lawyers carrying out internal investigations, as well as co-authored the French chapter in The Practitioner’s annual Guide to Global Investigations, published by the Global Investigations Review (GIR) since 2016.

Joydeep Sengupta, an advisor of Theolex, stated: “Theolex has been developed organically from the lived experience of cross-border investigations faced by global financial institutions in France, so I am very pleased to see it being adopted by Navacelle, whose founder is a thought-leader in France in the field of internal investigations.”

An Artificial Intelligence-Driven Legal Analytics Tool

Theolex is a transformative legal technology under development that allows legal, compliance, and risk professionals to analyze large volumes of documents using AI. This innovative technology can be applied to both national and cross-border compliance, regulatory investigations and disputes practices. It can be tailored to law firms, financial institutions, corporations, courts and the media.

Theolex provides a significant efficiency gain and cost saving to lawyers and their clients in the context of cross-border investigations, litigation and compliance. It centralizes publicly available negotiated settlements, such as deferred prosecution agreements, regulatory decisions and compliance guidelines. It performs benchmarks and cross-border comparisons to develop legal strategy, and enhances the analysis by correlating multiple data points to support legal arguments and identify future enforcement risks. It can be a powerful tool in providing strategic guidance to boards of directors, general counsels and external counsel.

Importance of Artificial Intelligence and Legal Risk Analytics

AI is transforming the practice of law, by developing data driven insights into legal and compliance risk. Law firms specialized in the field of compliance and investigations are betting on this development.

Impact on Multi-billion Dollar Financial Crime Compliance and Legal Risk Industry

The Financial Crime Compliance industry is worth USD 137 billion in Europe alone, and USD 181 billion globally1. In cross-border compliance investigations for financial institutions, penalties can often be in the hundreds of millions or even billions of dollars. Having quick access to synthesized and analyzed comparisons of the entirety of comparable provisions in similar negotiated agreements makes the lawyer’s arguments more coherent and persuasive, and can tilt the scale in the final negotiated amounts and conditions. The current Covid-19 crisis has made cost and efficiency advantages of technological innovation all the more important.

Contact: Martine Dolladille, Founder
Phone:+33 6 17 15 25 73
email: martine.dolladille@theolex.com

The Practitioner’s Guide to Global Investigations – The Practitioner’s Guide to Global Investigations (France)

The Practitioner’s Guide to Global Investigations (France)

Stéphane de Navacelle, Julie Zorilla, Clémentine Duverne and Sarah Reilly.

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General context, key principles and hot topics

1 Identify the highest-profile corporate investigation under way in your country, describing and commenting on its most noteworthy aspects.

The French judiciary’s battle against corruption and financial crime has continued in 2020.

Since the law of 9 December 2016 addressing transparency, anti-corruption and economic modernisation (known as the Sapin II Law) entered into force, 11 judicial public interest agreements (CJIP) have been agreed to by corporations. In the past year, five CJIPs have been signed, two of which stand out.

On 29 January 2020, Airbus SE (Airbus) agreed to a CJIP with the French National Financial Prosecutor (PNF). The CJIP put an end to a joint investigation being carried out by the PNF and the UK Serious Fraud Office (SFO) into bribery of foreign public officials, misuse of corporate assets, breach of trust, conspiracy to defraud, money laundering of the proceeds of these offences, forgery and use of forged documents. The US Department of Justice (DOJ) opened a parallel investigation into violations of the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations, for which the PNF shared part of its evidence from its investigation. Airbus agreed to targeted compliance verifications being carried out for a period of three years and to pay a public interest fine of almost €2.1 billion to the French Treasury, reflecting the disgorgement of profits derived from the offences and considering certain aggravating and mitigating factors. This CJIP exists alongside two other deferred prosecution agreements concluded with the SFO and the DOJ. The above-mentioned fine is part of a larger package of €3.6 billion shared with these authorities.Legal professionals consider this CJIP as a step forward for negotiated justice, namely on account of the unprecedented scope of the investigation – three and a half years of investigations covering Airbus’s conduct in more than 20 countries. Airbus’s ‘exemplary level of co-operation’ with the French and UK joint investigation team was praised by the PNF, as the corporation conducted a thorough internal investigation and implemented corrective compliance measures, justifying a 50 per cent reduction of the theoretical maximum of the fine. This CJIP also illustrates the willingness of investigating and prosecuting authorities toco-operate beyond national borders. The French authorities came out as major players in this multi-jurisdictional investigation – the PNF coordinating the investigation with its counterparts and France’s Anti-Corruption Agency (AFA) being trusted by the foreign authorities as the sole auditor of Airbus’s compliance programme and future conduct.

On 4 May 2020, the Swiss company Swiru Holding AG agreed to a CJIP offered by the public prosecutor of Nice. Swiru Holding acknowledged its guilt – a precondition to the signing of the CJIP within the framework of an investigation led by an investigative judge – and agreed to pay a €1.4 million fine for complicity in tax fraud, in addition to the payment of €10.4 million to the tax authorities. Swiru Holding had been indicted in November 2019 by the investigative judge after the investigation had revealed that a large part of the price of a villa acquired by the company had been concealed by the seller. The public prosecutor of Nice is the fourth authority that has signed a CJIP, joining the PNF and the public prosecutors of Paris and Nanterre, thereby showing a wider use of this transactional tool in France.

Alongside the signing of CJIPs, the investigative and judicial authorities in France continue to investigate corporations for offences, such as the investigation and charges of money laundering and financing of terrorism brought against global manufacturer LafargeHolcim.

The AFA, which can be called on to monitor sanctioned companies by CJIP, continues to initiate its own controls – a form of preventive corporate investigation, as the uncovering of any potential offences must be reported to the public prosecutor – and to sanction corporations via its Sanctioning Committee, having issued two decisions during the past year.

Future corporate investigations and settlements could be based on a wider array of offences, such as human rights violations and serious environmental damage, as the scope of the CJIP is likely to be extended in the near future.

2 Outline the legal framework for corporate liability in your country.

Corporations can be held liable on both civil and criminal grounds.

Corporate civil liability is incurred via contract or outside the framework of a contract (a tort). Corporations can be held criminally liable for offences committed on their behalf by their organs or representatives (i.e., individuals who have executive, administrative, managerial or control functions or those who act pursuant to a valid delegation of power). Corporate criminal liability does not exclude liability of the individual having committed the offence or an accomplice to the offence, since the highest French judicial court (Court of Cassation) gives weight to management endorsement of corporate misconduct. Although corporate criminal liability can also be found independently of individual liability, the Criminal Division of the Court has nevertheless reasserted that corporate criminal liability requires the identification of an organ or a representative.

Which law enforcement authorities regulate corporations? How is jurisdiction between the authorities allocated? Do the authorities have policies or protocols relating to the prosecution of corporations?

Corporations are regulated by judicial authorities – with investigative and prosecutorial functions – but also administrative and regulatory authorities. For the most part, jurisdiction between the authorities is dependent on subject matter, with numerous opportunities for co-operation and competition.

Jurisdiction of the judicial courts is usually defined by the location of the offence or the location of the corporate headquarters.

Moreover, specialised interregional courts have jurisdiction over complex economic and financial matters, or multi-jurisdictional matters.<.p>

Furthermore, specialist sections of the prosecution authorities in Paris have national jurisdiction to handle specific offences (e.g., financial crime and corruption, terrorism and crimes against humanity). One example is the PNF, which investigates and prosecutes financial crimes (such as public and private corruption, favouritism, aggravated tax fraud, VAT fraud, insider trading, index fund manipulation). The importance of the PNF was reiterated on 2 June 2020 in a Criminal Policy Circular on the Fight against International Corruption issued by the Minister for Justice. This Circular, addressed to all French prosecutors, sets out the central role of the PNF in the fight against international corruption, given its technical expertise, its visibility and international recognition, and asserts that the PNF must centralise all cases of international corruption and be systematically informed of any credible suspicion of international corruption.

Administrative and regulatory authorities also oversee the activities of corporations. The French Financial Markets Authority (AMF) regulates the integrity of financial markets, ensuring investor protection and information, and preventing market abuse. The French Competition Authority combats antitrust practices and ensures the lawful functioning of the markets by conducting field enquiries, overseeing corporate mergers, and publishing opinions and recommendations. France’s Supervisory and Resolution Authority (ACPR) preserves the stability of the financial system, working with international bodies that supervise insurance and banking industry corporations’ operating conditions and compliance with rules designed to protect customers. The French AFA controls and sanctions corporations covered by Article 17 of the Sapin II Law (i.e., corporations with more than 500 employees, or a group with headquarters in France with more than 500 employees and a turnover that exceeds €100 million) for flawed or insufficient anti-corruption processes and policies, and monitors the implementation of anti-corruption programmes.

The activities of some law enforcement authorities overlap, calling for coordination. The PNF and the AFA published Joint Guidelines on the Implementation of the CJIP in 2019,highlighting their common understanding of their relations with stakeholders in pursuit of a common goal of fighting corruption.

4 What grounds must the authorities have to initiate an investigation? Is a certain threshold of suspicion necessary to trigger an investigation?

Investigations can be initiated by the public prosecutors, or by civil parties via the filing of a formal complaint with an investigating judge.

With respect to public prosecutors, investigations are initiated pursuant to complaint, reporting, voluntary disclosure or flagrante delicto. Prosecutorial discretion with respect to the following steps is considerable. The public prosecutor can choose to prosecute, to settle or to drop the charges, to investigate itself or to pass a case to an investigating judge. There is no minimum threshold of suspicion provided by law for prosecutors to initiate investigative acts and the latter cannot be challenged in court.

With respect to investigating judges, investigations are initiated either through the prosecutor or pursuant to a complaint filed by civil parties. Non-governmental organisations that have been in place for a certain number of years can also file a complaint if the facts of the complaint pertain to the objective of the organisation.

Investigating judges will be seized in rem and their investigative acts will be limited to the facts as presented by the public prosecutors. All investigative acts of the investigating judge can be challenged in court.

Investigations can also stem from administrative or regulatory authorities’ detection of suspicious activities within their material jurisdiction (e.g., AMF, AFA, ACPR).

5 How can the lawfulness or scope of a notice or subpoena from an authority be challenged in your country?

Orders issued by investigating, administrative and judicial authorities must comply with specific formalities and be based on a legal provision.

Notice to attend or a subpoena (i.e., a written notice that requires a party to attend a court hearing or to produce a document to the authorities) can be challenged under French law if the orders are not provided for by law or do not contain the appropriate information to inform the recipients of their rights.

Moreover, the principle of secrecy (e.g., professional secrecy, bank secrecy, defence and security), for instance, is a ground to object to the issuance of an order for the communication of documents – even though recent case law trend has admitted the seizure of documents protected by attorney–client privilege.

In practice, it is rare for legal or administrative orders to be quashed. In criminal law for instance, the quashing of summons to appear will hinge on demonstrating a prejudice to the person concerned by the order – which is difficult to demonstrate in that suspects will often be notified of their rights at some stage in the proceedings.

When a notice or a subpoena is issued by a foreign authority, it is possible to challenge whether it is lawful by opposing the French Blocking Statute (Law 68-678 of 26 July 1968).

The French Blocking Statute prohibits any request for or submission of information or documents of an economic, commercial, industrial, financial or technical nature, whether in writing or orally, either affecting the essential economic interests of France or in view of the information or documents constituting evidence in foreign judicial or administrative proceedings outside the framework of international treaties or agreements.

6 Does your country make use of co-operative agreements giving immunity or leniency to individuals who assist or co-operate with authorities?

There are no formalised co-operative agreements signed with corporations that grant immunity or leniency for individuals who assist or co-operate with authorities.

Nevertheless, the co-operation of individuals with authorities could lead to more lenient sentences. Plea bargaining for individuals is only permitted should they admit guilt; in return, they will receive half of an applicable sentence. Moreover, for offences relating to private and public corruption, a prison sentence can be halved should an involved individual co-operate with the administrative or judicial authorities and contribute to putting an end to the offence or identifying the offenders or accomplices. The Criminal Policy Circular on the Fight against International Corruption issued by the Minister for Justice on 2 June 2020 reasserts this principle.

7 What are the top priorities for your country’s law enforcement authorities?

For several years, in the field of financial crime, the main priority for French enforcement authorities has been the fight against corruption.

This priority was reaffirmed by the Criminal Policy Circular issued by the Minister for Justice on 2 June 2020, which focuses on the fight against international corruption and was adopted in the wider context of the Organisation for Economic Co-operation and Development’s assessment of the anti-corruption arsenal in France.

8 To what extent do law enforcement authorities in your jurisdiction place importance on a corporation having an effective compliance programme? What guidance exists (in the form of official guidance, speeches or case law) on what makes an effective compliance programme?

Within the context of a trial for probity offences, corporations meeting the requirements of Sapin II Law, under Article 17, can request the public prosecutor to offer a CJIP and to impose a lower financial sanction. Nevertheless, this remains at the public prosecutor’s discretion. The public prosecutor considers the ability and willingness of the executive management, once it is aware of the offences that have been committed within the corporation, to implement the necessary corrective measures to enhance the compliance programme. Implementing an effective corporate compliance programme may be a condition of a CJIP and the law enforcement authorities can order the AFA to monitor the compliance programme of a corporation for up to three years.

In practice, should a company enhance its compliance programme in accordance with best practice before a CJIP is signed, the public prosecutor may rule on completion of the structure of the programme, and the AFA will only have to monitor its implementation. In the case of the Airbus CJIP, the AFA had already submitted a preliminary examination report to the PNF.

The first official guidance on the content of an effective compliance programme was provided by the eight pillars of the Sapin II Law, namely code of conduct, whistleblower channel, risk mapping, due diligence on customers, suppliers and third-party agents, internal and external accounting controls, training for high-risk employees, disciplinary sanctions and monitoring and evaluation of measures. Moreover, the AFA has issued several sets of guidelines – including Practical Guide on the Corporate Anti-Corruption Compliance Function and Practical Guide on Implementation of the Compliance Programme Sanction – and practical Q&As for private and public sector entities.

Although AFA recommendations are not legally binding, compliance with them is taken into consideration in the event of subsequent control measures.

Does your country regulate cybersecurity? Describe the approach of local law enforcement authorities to cybersecurity-related failings.

9 Does your country regulate cybersecurity? Describe the approach of local law enforcement authorities to cybersecurity-related failings.

A comprehensive framework addresses cybersecurity at different national levels.

At national level, the National Cybersecurity Agency (ANSSI), established in 2009, is the national authority in charge of cyber-defence and information security. Its purpose is to oversee the activities of government departments, public services, strategic businesses and operators, with the aim of providing a proactive response to cybersecurity matters. It also issues authorisations for exports and imports of goods containing encryption. Alongside ANSSI, other specialist bodies address cybersecurity: the police force (Central Cybercrime Prevention Office) is responsible for fighting crimes linked to information and communication technologies, the National Gendarmerie office is responsible for fighting digital crimes and the Paris Prefecture brigade is responsible for the investigation of information technology fraud.

Should an undertaking’s cybersecurity measures fall short of ensuring data protection, for instance, administrative fines can be incurred.

Moreover, France was the first to require private and public undertakings that operate or use facilities deemed essential for the state’s survival to create information systems and set up effective and mandatory cybersecurity systems. ANSSI, its certified service providers or state services carry out security controls within these undertakings. In the event of non-compliance with any rule, the undertaking will be given notice to comply, or risk a financial sanction pursuant to the Defence Code, which provides for a €150,000 fine for individuals and a €750,000 fine for legal entities.

10 Does your country regulate cybercrime? What is the approach of law enforcement authorities in your country to cybercrime?

The implementation of cybercrime regulations is coordinated by the Interior Ministry in collaboration with ANSSI and dedicated police services. The legal framework for tackling cybercrime has grown in recent years, drawing from the Budapest Convention on Cybercrime of 23 November 2001, which harmonises national laws across Europe, improves investigative techniques and increases co-operation between European states.

Several pieces of French legislation include sanctions for offences constituting cybercrime.

The Criminal Code sanctions hacking and denial-of-service attacks and the Code of Intellectual Property sanctions phishing and possession or use of hardware to commit cybercrime – offenders face imprisonment and fines up to €375,000.

French law provides for extraterritorial application of its provisions in that a cybercrime is considered to have been committed in France if the offence is committed through an e-communication network to the detriment of a person in France or a company with its registered office in France.

Cross-border issues and foreign authorities

11 Does local criminal law have general extraterritorial effect? To the extent that extraterritorial effect is limited to specific offences, give details.

Criminal law can have extraterritorial effect should a crime or misdemeanour be committed abroad by a French national. For misdemeanours (délits) committed abroad, extraterritoriality will apply, provided that the conduct is sanctionable under the legislation of the country in which it was committed (double incrimination). In respect of corruption, whether in a public or private context, the Sapin II Law removes the double incrimination requirement and extends the extraterritoriality effect to French residents or those individuals and corporations that conduct their economic activity on French soil.

Criminal law can also have extraterritorial effect should a crime or misdemeanour that is sanctioned by imprisonment be committed abroad against a French national.

The public prosecutor can only initiate proceedings against an offender once a formal complaint has been filed by a victim or by the concerned foreign authorities.

In specific circumstances, French criminal law can have extraterritorial effect should a crime or misdemeanour be committed abroad by a non-French national, in the event that his or her extradition or transfer to his or her country of origin be refused by the French authorities.

French criminal law can also have extraterritorial effect in other limited circumstances, such as when the fundamental interests of the nation, diplomatic or consular agents or premises are targeted and when crimes and misdemeanours pertaining to acts of terrorism are committed abroad by a French national or a resident on French soil.

12 Describe the principal challenges that arise in your country in cross-border investigations, and explain whether and how such challenges depend on the other countries involved.

The challenges of cross-border investigations mainly occur when the French authorities are not involved in the investigation and prosecution proceedings.

The United States has always encouraged a more hard-line enforcement of international financial and corruption issues globally, whereas the French authorities tend to co-operate with the United States without tackling the issues proactively and independently. The Sapin II Law marks the change in cross-border investigations, in which the French authorities, are much more involved and trusted as international participants. The Airbus CJIP is an illustration of this new status. The PNF coordinated the investigations with the UK’s SFO and US DOJ and was the main point of contact for Airbus.

Even though the French authorities are currently more involved in cross-border investigations, some issues remain. One of the main challenges is to ensure that French corporations and individuals abide by the French Blocking Statute. This statute prohibits the communication of economic, commercial, industrial, financial or technical documents or information to foreign authorities or the use of any such information as evidence in legal proceedings abroad, subject to mechanisms afforded under international agreements or treaties, such as the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the Hague Evidence Convention) or a mutual legal assistance treaty.

To mitigate this challenge when the French authorities are not involved in a request for communication from foreign authorities, French corporations or individuals can seek advice from the AFA or the Strategic Information and Economic Security Service (SISSE) of theMinistry for Economy and Finance.

Another challenge in investigations that cross the borders of the European Union is the protection of personal data. The EU General Data Protection Regulation (GDPR) came into force in France on 20 June 2018 and introduced new rules on communication of personal data to foreign authorities. Article 48 of the GDPR provides that any transfer of personal datamust be based on an international agreement.

13 Does double jeopardy, or a similar concept, apply to prevent a corporation from facing criminal exposure in your country after it resolves charges on the same core set of facts in another? Is there anything analogous in your jurisdiction to the ‘anti-piling on’ policy as exists in the United States (the Policy on Coordination of Corporate Resolution Penalties) to prevent multiple authorities seeking to penalise companies for the same conduct?

The principle of double jeopardy enshrined in Article 14.7 of the International Covenant on Civil and Political Rights, Article 50 of the Charter of Fundamental Rights of the European Union and Article 4 of Protocol No. 7 to the European Convention on Human Rights has been ratified by France. The French state provides an exception in its ratification of Article 4 of Protocol No. 7, limiting the application of ne bis in idem to the field of criminal law. Based on this principle, no individual who has been convicted or acquitted in France by definitive criminal judgment may be prosecuted again for the same offence.

French criminal case law considers, however, that ne bis in idem does not apply when a definitive foreign judgment has been rendered for an offence of which elements occurred in France. For instance, on 14 March 2018, in a decision regarding the Oil-for-Food Programme, the Court of Cassation (the highest criminal court in France) confirmed that Article 14.7 of the United Nations (UN) International Covenant on Civil and Political Rights applies only when both proceedings are initiated in the territory of the same state. Thus, the double jeopardy provision found in a US deferred prosecution agreement (DPA) does not apply.

Owing to the French exception in its interpretation of Article 4 of Protocol No. 7, it is possible in France for an individual or corporation to be sanctioned for the same offence by both judicial and administrative authorities. On 6 June 2019, however, in a case involving two sanctions for market offences – by the AMF and the criminal court – France was convicted by the European Court of Human Rights (ECHR) for violation of the ne bis in idem principle (Nodet v. France, Case No. 47342/14). The ECHR calls on France to ensure that each proceeding is duly considered and that the overall amount of all penalties is proportionate.

14 Are ‘global’ settlements common in your country? What are the practical considerations?

Global settlements are a recent development in France in multi-jurisdictional investigations.

The Société Générale CJIP in 2018 and the Airbus CJIP in 2020, both signed alongside foreign DPAs, demonstrate an intent to reinforce co-operation between cross-border authorities.

The main practical consideration with respect to global settlements is that they can occur in jurisdictions with an entirely different legal system.

15 What bearing do the decisions of foreign authorities have on an investigation of the same matter in your country?

In criminal matters, save for cases in which ne bis in idem applies, the French authorities are free to take a foreign court ruling into consideration to open an investigation. The French authorities conduct their own investigations independently.

In practice, however, the emerging trend is towards co-operation between French and foreign authorities.

Economic sanctions enforcement

16 Describe your country’s sanctions programme and any recent sanctions imposed by your jurisdiction.

The implementation of economic sanctions in France is essentially part of UN sanctions policy and the EU Common Foreign and Security Policy. Restrictive measures, such as asset freezing, embargoes and commercial restrictions, are enforced by a European Council decision supported by EU Regulations and are directly binding on EU Member States. Unilateral measures can also be implemented by national decree or order, even though the European Commission, in a recent non-binding opinion, has considered unilateral asset freeze measures to be incompatible with EU law.

The sanctions may target governments of foreign countries, non-government entities and individuals. France’s Ministry of the Economy and Finance (Directorate-General of the Treasury) and Ministry for Europe and Foreign Affairs oversee the implementation of any sanction decided at European level.

The national sanctions framework relies on three legal codes, namely the Customs Code, the Monetary and Financial Code and the Defence Code.

17 What is your country’s approach to sanctions enforcement? Has there been an increase in sanctions enforcement activity in recent years, for example?

There is no unique approach to sanctions enforcement.

In recent years, measures to fight terrorism financing have increased. For instance, the French Monetary and Financial Code entitles the Minister of Economy and Finance to order the freezing of assets belonging to individuals or legal entities who commit, or attempt to commit, terrorist acts, or who facilitate or participate in such acts. On 17 June 2019, the French Directorate-General of the Treasury published an updated version of the guidelines drafted with the ACPR on the implementation of French economic sanctions.

18 Do the authorities responsible for sanctions compliance and enforcement in your country co-operate with their counterparts in other countries for the purposes of enforcement?

There is no general framework to criminalise the violation of economic sanctions, although a bill for this purpose was considered by the French Parliament in 2016. However, France enforces international and European restrictive measures.

19 Has your country enacted any blocking legislation in relation to the sanctions measures of third countries? Describe how such legislation operates.

As a member of the European Union, France is subject to the EU Blocking Regulation established on 22 November 1996 and updated on 6 June 2018 by the European Commission.

This Regulation is directly enforceable in France. The measure forbids EU citizens from complying with third-country extraterritorial sanctions unless exceptionally authorised to do so by the European Commission, as set forth in Commission Implementing Regulation (EU) 2018/1101.

20 To the extent that your country has enacted any sanctions blocking legislation, how is compliance enforced by local authorities in practice?

Although the Blocking Regulation sanctions EU companies that would comply with third-country sanctions, the measure has much more of a symbolic effect than an economic one.

It has only been applied in 1998 in the context of a complaint filed by the European Communities before the World Trade Organization. As regards the US sanctions on Iran, experts are sceptical about how far Europe will ultimately go to enforce such a rule. It could also prove difficult to enforce, in part because of the international banking system and the significance of the United States in international financial markets.

Before an internal investigation

21 How do allegations of misconduct most often come to light in companies in your country?

Allegations can come to light through various channels.

Article 8 of the Sapin II Law provides for a three-tiered reporting system, by which employees or business partners first must submit an alert to their direct supervisor, employer or designated representative. Second – if no appropriate action is taken or there is a likelihood of imminent danger – the alert must be submitted to the relevant judicial, administrative or professional authority. Third – if no appropriate action is taken or there is a
likelihood of imminent danger – the alert must be made public. Appropriate procedures for collecting reports must be established by legal entities with more than 50 employees, state administrations, municipalities with more than 10,000 inhabitants, public inter-municipal co-operation establishments, departments and regions.

Since the Sapin II Law has been in force, allegations thereby increasingly occur via whistleblowing channels.

Moreover, increasing freedom of the press and protection of journalists’ sources has led the media to reveal facts, resulting in the prosecution of key political figures and corporations in recent years.

Thematic reviews can also be carried out by administrative and regulatory authorities or by statutory auditors that reveal misconduct within corporations.

Information gathering

22 Does your country have a data protection regime?

Yes, France has a data protection regime.

In 1978, France adopted a data protection regime with the Law on Information Technology, Data Files and Civil Liberties.

In 2016, the European Parliament and the Council of the European Union adopted the GDPR, which entered into force on 25 May 2018. The GDPR was incorporated in France’s internal legislative framework by Law No. 2018-493, which was passed on 20 June 2018, amending the existing law, of which some provisions were contrary to the GDPR.

23 To the extent not dealt with above at question 9, how is the data protection regime enforced?

Law No. 2018-493 of 20 January 2018 and the GDPR grant new investigating and sanctioning powers to the National Commission on Computing and Liberty (CNIL).

The right of the individual to information and the right of access, rectification and deletion of personal data are reinforced and the sanctions imposed in the event of obstruction or non-compliance with the legal provisions are increased. The CNIL has the power to impose a periodic sanction (limited to €100,000 per day) in addition to administrative fines (which can be as much as €20 million or 4 per cent of annual global turnover). CNIL agents also have a broader right to survey and investigate places used for the processing of personal data, namely with respect to European coordination.

24 Are there any data protection issues that cause particular concern in internal investigations in your country?

Although there are several data protection issues relevant to internal investigations in France, these are not country-specific, as they result from European regulation (i.e., the GDPR).

The main issue is that lawyers leading internal investigations may find themselves as guarantors of data protection and must reconcile this duty of protection with the duty of professional secrecy. It is necessary to clearly identify the regulations applicable to the use or transfer of data, such as the rules protecting the transfer of data considered to be within the scope of the interests of France (i.e., the Blocking Statute, rules on corporate secrecy), the rules protecting the access, processing and transfer of personal data outside or within the European Union (e.g., transfers based on international conventions), the rules protecting the rights of individuals who are subject to internal investigations (e.g., information provided to individuals regarding their right to access, rectify or delete data) and the rules pertaining to the length of time for which data can be stored.

25 Does your country regulate or otherwise restrict the interception of employees’ communications? What are its features and how is the regime enforced?

When employees use technological devices made available to them by their employer for professional purposes, those devices are presumed to be professional. Employers are therefore permitted to request to consult or access them. The courts, however, have curtailed this right of access based on the right to privacy. Professional emails, text messages or chat applications expressly labelled as private are thereby confidential and not accessible by the employer.

Dawn raids and search warrants

26 Are search warrants or dawn raids on companies a feature of law enforcement in your country? Describe any legal limitations on authorities executing search warrants or dawn raids, and what redress a company has if those limits are exceeded.

Yes, search warrants and dawn raids are a key element of enforcement and evidence gathering by judicial and administrative authorities.

Strict legal provisions apply to search warrants and dawn raids. The latter must be authorised either by the public prosecutor for in flagrante delicto and preliminary investigations or the investigating judge for judicial investigations. In preliminary investigations, the consent of the individuals or corporations to be raided is needed. Should consent not be given, the dawn raid must be authorised by the Judge of Liberties and Custody. Moreover, dawn raids can only be conducted between 6am and 9pm, except in cases of organised crime and terrorism. Minutes of the dawn raid are drafted and signed by the entities or individuals involved in the raid.

Companies subject to dawn raids should ensure that these legal provisions are followed.

Any incident should be recorded in the minutes of the dawn raid and the minutes should not be signed if there is any disagreement regarding the content.

If the legal requirements of a dawn raid have been violated, the nullity of the dawn raid and the ensuing procedural acts, including the seizure of materials, can be requested. The company will be able to request the return of seized materials.

27 How can privileged material be lawfully protected from seizure during a dawn raid or in response to a search warrant in your country?

Privilege only attaches to external lawyer material and not that of in-house counsel.

Privileged material is protected from investigating and judicial scrutiny, save for materials unrelated to defence rights or those establishing the participation of the lawyer in an offence.

Corporations or individuals must thereby indicate the material that is covered by lawyer–client privilege. In the case of seizure of privileged material, the corporations or individuals involved must seek permission to make copies and file a subsequent request to have the privileged material returned.

28 Under what circumstances may an individual’s testimony be compelled in your country? What consequences flow from such compelled testimony? Are there any privileges that would prevent an individual or company from providing testimony?

There are two separate regimes for witnesses and suspects.

During the investigation phase, police officers can summon as a witness any person who they deem fit for the purposes of the investigation. Should a witness refuse to comply, a police officer may notify the public prosecutor, who may compel the person by official notice.

Witnesses who fail to appear or testify before the investigating judge or police officer without proper reason face a €3,750 fine. Before a court, witnesses are always compelled to attend the hearing and testify. The summons issued to a witness must also state that failure to appear, refusal to testify and perjury are punishable by law. Witnesses who refuse to appear without proper reason face a €10,000 fine.

Police officers can detain suspects for the amount of time necessary for the purposes of the investigation and under the limitations of the law and approval of a judge. A suspect can refuse to answer questions based on the right against self-incrimination.

Testimony can also be refused on account of public service (e.g., diplomatic, presidential or parliamentary immunity) or professional secrecy. Testimony revealing information of a secret nature by a person who is in possession of that information, owing to state, professional or temporary function or mission, is sanctioned by imprisonment or a €15,000 fine, save for limited exceptions.

Whistleblowing and employee rights

29 Describe the whistleblowing framework in your country. What financial incentive schemes exist for whistleblowers? What legal protections are in place for whistleblowers?

Until the implementation of the European Directive, which grants broader protection to whistleblowers (e.g., access to free information and advice about the available procedures for protection against any legal action taken against them), the Sapin II Law provides relevant protective measures.

There are no financial incentives for whistleblowers in France. The idea of a financial incentive scheme was considered but the French Constitutional Council ruled against it.

With respect to legal protections, whistleblowers cannot be excluded from recruitment procedures or professional training, cannot be dismissed, or face direct or indirect discriminatory measures. The protection of whistleblowers’ identity must also be guaranteed.

30 What rights does local employment law confer on employees whose conduct is within the scope of an investigation? Is there any distinction between officers and directors of the company for these purposes?

Internal investigations do not benefit from a dedicated legal framework. In September 2016, the Paris Bar adopted a vade mecum of ethical recommendations for investigating lawyers, which was amended in December 2019. On 12 June 2020, the National Council of Bars also published a guide for French lawyers conducting internal investigations. Other legal provisions apply to these internal investigations.

Employees whose conduct is within the scope of an investigation could benefit from several rights, but these are not expressly provided by law. Employees interviewed within an internal investigation should be informed that the external lawyer represents the company and not their personal interests and that they can be assisted by an independent lawyer, should their conduct amount to misconduct. The purpose of the interview and its non-coercive
nature should also be indicated.

Furthermore, data protection and privacy laws apply to all employees regardless of allegations of wrongdoing, allowing employees to access and modify all personal data that has been collected and entitling them to invoke the right to privacy. This right to privacy may be circumvented, however, should emails, text messages or chat applications be located on professional devices, and they are not marked as private or in a private inbox.

There is no different treatment applicable to officers and directors of companies within internal investigations.

31 Do employees’ rights under local employment law differ if a person is deemed to have engaged in misconduct? Are there disciplinary or other steps that a company must take when an employee is implicated or suspected of misconduct, such as suspension or in relation to compensation?

Presumption of innocence applies to all employees, including those who are deemed to have engaged in misconduct. These employees thereby benefit from the same rights as other employees (e.g., notice for interview and notification of rights). Employees suspected of misconduct must be advised of their right to a lawyer.

If misconduct is confirmed, an employer has several options for sanctioning employees, including dismissing them or putting them on furlough during the investigation.

32 Can an employee be dismissed for refusing to participate in an internal investigation?

The labour courts appear to consider the refusal to participate in an internal investigation as a sufficiently severe fault to warrant sanction under specific circumstances.

Commencing an internal investigation

33 Is it common practice in your country to prepare a document setting out terms of reference or investigatory scope before commencing an internal investigation? What issues would it cover?

When judicial review by a labour court is likely to happen (e.g., if an employee who has been sanctioned for misconduct challenges the findings of an internal investigation), it is considered best practice to prepare a document setting out the terms of reference or investigatory scope before commencing an internal investigation.

34 If an issue comes to light prior to the authorities in your country becoming aware or engaged, what internal steps should a company take? Are there internal steps that a company is legally or ethically required to take?

French law does not provide a clear set of rules with respect to the internal steps a company should take when it becomes aware of an issue with legal implications. The company should assess the scope of the facts and the probability of incurring liability, to determine the interest in co-operating with the authorities and to set out a defence strategy.

There is no obligation to report back to authorities, but it is encouraged within the framework of a CJIP. The joint AFA-PNF Guidelines on the implementation of CJIPs expressly provide, however, that voluntary self-disclosure by a company will be taken into account favourably, both for the opportunity to settle a CJIP and as a mitigating factor.

The main legal requirement is for individuals or corporations not to destroy oramend evidence.

35 What internal steps should a company in your country take if it receives a notice or subpoena from a law enforcement authority seeking the production or preservation of documents or data?

It is very likely that the enforcement authority would collect documents or data directly by carrying out a raid within the company, having gathered sufficient information from third parties to ensure that it is possible to collect relevant information. If a company has any reason to believe a raid is likely, it should immediately ensure that any documents that may be seized indicate privilege, where relevant.

Administrative authorities (e.g., AFA, AMF, ACPR, the Competition Authority) can request communication of data and documents from companies under review or directly from third parties. If these requests are legally permitted, corporations must comply.

36 At what point must a company in your country publicly disclose the existence of an internal investigation or contact from a law enforcement authority?

Other than those attached to publicly traded companies, there are no obligations as to when a company must disclose the existence of an internal investigation or contact from a law enforcement authority.

Self-disclosure is an option available to obtain credit for co-operation.

37 How are internal investigations viewed by local enforcement bodies in your country?

Influenced by the Anglo-Saxon legal culture, internal investigations have been progressively accepted by specialist financial investigating judges and prosecutors.

Although negotiating a deal with a prosecutor or an investigating magistrate is still rather uncommon, the number of CJIPs has increased in recent years, and internal investigations are an effective tool in multi-jurisdictional matters and cross-border negotiated justice. French authorities are relying more and more on internal investigations, which are considered a key component of a criminal file.

Influenced by the Anglo-Saxon legal culture, internal investigations have been progressively accepted by specialist financial investigating judges and prosecutors.

Although negotiating a deal with a prosecutor or an investigating magistrate is still rather uncommon, the number of CJIPs has increased in recent years, and internal investigations are an effective tool in multi-jurisdictional matters and cross-border negotiated justice. French authorities are relying more and more on internal investigations, which are considered a key component of a criminal file.

Attorney–client privilege

Can the attorney–client privilege be claimed over any aspects of internal investigations in your country? What steps should a company take in your country to protect the privilege or confidentiality of an internal investigation?

There is no attorney–client privilege for communications with in-house counsel in France.

To benefit from privilege, investigations should be carried out by external lawyers. Lawyers
cannot be freed from the duty of professional secrecy under any circumstances, even by their clients.

Professional secrecy applies between lawyers and their clients but not with the employees of their clients. Lawyers must therefore notify those employees that anything they say can be disclosed to the authorities by their employer.

Confidentiality applies to communications between lawyers and providing separate counsel to individuals is recommended to facilitate safe communications.

The AFA-PNF Guidelines differ slightly from the Paris Bar’s vade mecum for investigating lawyers, published in 2019. Whereas the AFA-PNF Guidelines state that not all the evidence included in an internal investigation report is necessarily covered by lawyers’ professional confidentiality, the vade mecum provides that all documents lawyers draw up in the course of their work are covered by professional secrecy.

In any case, the client is at liberty to disclose documents.

39 Set out the key principles or elements of the attorney–client privilege in your country as it relates to corporations. Who is the holder of the privilege? Are there any differences when the client is an individual?

There is no specific attorney–client privilege relating to corporations.

The particularity within this context is to determine who the counterpart of the lawyer is within a corporation, which will usually be the general manager or general counsel.

There are no differences when the client is an individual.

40 Does the attorney–client privilege apply equally to in-house and external counsel in your country?

There is no privilege attached to communications with in-house counsel. Privilege only attaches to external lawyers.

The Gauvain Report published on 26 June 2019 on the protection of companies against extraterritorial reach recommends introducing privilege applicable to legal advice given by in-house counsel.

41 Does the attorney–client privilege apply equally to advice sought from foreign lawyers in relation to (internal or external) investigations in your country?

There is no general provision regarding attorney–client privilege as regards foreign lawyers in relation to investigations.

The Paris Bar Council has stressed that email exchanges between a client and a foreign lawyer can be covered by attorney–client privilege. In addition, foreign lawyers can be temporarily and occasionally authorised to practise consulting and counselling activities in France.

In that case, they are bound by both their home country’s professional rules and the ethics rules applicable to French lawyers, which include attorney–client privilege.

42 To what extent is waiver of the attorney–client privilege regarded as a co-operative step in your country? Are there any contexts where privilege waiver is mandatory or required?

Attorney–client privilege cannot be waived by lawyers under any circumstances, even when permitted by the client, save for the personal defence of lawyers in a case opposing their client or specific cases provided by law.

The client is not bound by attorney–client privilege.

43 Does the concept of limited waiver of privilege exist as a concept in your jurisdiction? What is its scope?

This concept does not exist in France.

44 If privilege has been waived on a limited basis in another country, can privilege be maintained in your own country?

As attorney–client privilege is general, absolute and unlimited in time under French law, it must be maintained, even after a limited disclosure abroad.

Co-operation between enforcement authorities is likely, however, to make the privilege moot.

45 Do common interest privileges exist as concepts in your country? What are the requirements and scope?

Common interest privileges do not exist per se in French law. It is possible, however, for the purposes of defending a client, to share privileged information with other attorneys without waiving privilege – whether the clients share a common interest or not (foi du palais).

46 Can privilege be claimed over the assistance given by third parties to lawyers?

Professional secrecy can be extended to experts on whom lawyers rely for the purposes of their work.

It is usually safer to have the information collected and processed within the law firm’s offices.

Witness interviews

47 Does your country permit the interviewing of witnesses as part of an internal investigation?

There are no legal provisions regarding internal investigations, including the interviewing of witnesses.

Interviews with individuals who are not current or former employees of the company are not prohibited by the Paris Bar vade mecum, but recourse to external counsel is advised.

48 Can a company claim the attorney–client privilege over internal witness interviews or attorney reports?

See question 38. Yes, a company can claim attorney–client privilege over internal witness interviews or attorney reports. Nevertheless, the AFA-PNF Guidelines differ slightly from the Paris Bar vade mecum for investigating lawyers regarding the documents covered by attorney–client privilege.

49 When conducting a witness interview of an employee in your country, what legal or ethical requirements or guidance must be adhered to? Are there different requirements when interviewing third parties?

There are no legal provisions regarding internal investigations, including the interviewing of witnesses.

The Paris Bar vade mecum makes no distinction between interviews carried out with employees and third parties.

50 How is an internal interview typically conducted in your country? Are documents put to the witness? May or must employees in your country have their own legal representation at the interview?

Lawyers conducting interviews must explain to whom the attorney–client relationship applies (i.e., that they are acting in the interests of the corporation, not the employees) and that independent representation is possible. Lawyers must also indicate the purpose of the interview and its non-coercive nature.

Documents can be provided ahead of time. This practice usually occurs when an employee has separate representation. Documents are communicated from the lawyer of the company to the lawyer of the employee, as correspondence between attorneys is covered by default by privilege. This ensures that the employee is not given the opportunity to communicate the documents to third parties and that the authorities are unable to seize the documents.

Reporting to the authorities

51 Are there circumstances under which reporting misconduct to law enforcement authorities is mandatory in your country?

Except for specific crimes that are inchoate and can be avoided, only civil servants have a general obligation to report crimes of which they become aware in the context of their employment.

There is no legal requirement to self-report.

The guidelines on CJIPs clearly state, however, that voluntary self-reporting of offences to prosecutors, if made in a timely manner – both as regards the choice of the CJIP procedure and as a factor reducing the amount of the public interest fine – will be considered favourably.

52 In what circumstances might you advise a company to self-report to law enforcement even if it has no legal obligation to do so? In what circumstances would that advice to self-report extend to countries beyond your country?

Self-reporting is not very common in France.

A corporation will be advised to self-report if misconduct is established without doubt, if proper corrective measures have been taken and if the corporate compliance programme has been reinforced, to be given credit for co-operation with the judicial authorities notified of the misconduct. The involvement of foreign authorities can also have a bearing on a decision to self-report, as well as the multi-jurisdictional aspect of investigations, should the multiple authorities involved be likely to collaborate.

In criminal matters, a corporation could be advised to self-report to authorities in a foreign country, should the foreign legislation be favourable to corporations that come forward.

53 What are the practical steps you need to take to self-report to law enforcement in your country?

There is no specific procedure for self-reporting and no legal requirement to do so.

Informal contacts should be made, through external counsel, with the competent authority, after a thorough analysis of the advantages and disadvantages. Although there is no statutory requirement to evaluate self-reporting and co-operation in a CJIP, the AFA-PNF Guidelines indicate that self-reporting within a reasonable period shall be onsidered favourably, as a factor for encouraging the offer of a CJIP or reducing the fine.

Responding to the authorities

54 In practice, how does a company in your country respond to a notice or subpoena from a law enforcement authority? Is it possible to enter into dialogue with the authorities to address their concerns before or even after charges are brought? How?

Corporations must respond in writing to notices or subpoenas from a law enforcement authority in compliance with the methods and time limits provided by law.

It is possible to enter into dialogue with the investigating authorities, whether the investigating judge or the public prosecutor, but these communications often remain unofficial and may not amount to anything. Alongside ad hoc communications, investigative acts beyond the scope of the mandate of the judicial authority can be challenged in court.

55 Are ongoing authority investigations subject to challenge before the courts?

Yes, ongoing authority investigations can be challenged before the courts.

Ongoing investigations led by a public prosecutor are not subject to challenge before the courts, except for a limited number of investigating acts that breach legal requirements.

Challenges are only possible once the investigation is closed by requesting the nullity of the investigative acts.

However, investigative acts in ongoing investigations led by an investigating magistratecan be challenged before the courts.

56 In the event that authorities in your country and one or more other countries issue separate notices or subpoenas regarding the same facts or allegations, how should the company approach this?

The company should answer to all the authorities involved separately, as the questions that can be raised by different authorities vary.

It should nevertheless be borne in mind that authorities communicate with one another.

When dealing with foreign authorities, the Blocking Statute, specific secrecy provisions, privacy and data protection issues should also be addressed.

57 If a notice or subpoena from the authorities in your country seeks production of material relating to a particular matter that crosses borders, must the company search for, and produce material, in other countries to satisfy the request? What are the difficulties in that regard?

The collection of material abroad will have to be carried out in compliance with the applicable
foreign law.

The difficulty may be that applicable foreign law does not allow the seizure and production of material. If a corporation finds it impossible to provide requested material, it must explain the situation to the French authorities.

58 Does law enforcement in your country routinely share information or investigative materials with law enforcement in other countries? What framework is in place in your country for co-operation with foreign authorities?

Co-operation with foreign enforcement authorities is increasing, both within the European Union and beyond, namely through mutual legal assistance treaties, agreements between regulators and enforcement authorities, and EU co-operation agreements.

59 Do law enforcement authorities in your country have any confidentiality obligations in relation to information received during an investigation or onward disclosure and use of that information by third parties?

Except where the law provides otherwise, inquiry (i.e., under an investigating magistrate) and investigation (i.e., under a public prosecutor) proceedings are confidential. Third parties are not bound by this confidentiality.

Any person contributing to an investigation is bound by this confidentiality, namely the judges in charge of the investigation, the public prosecutor, the law clerks, the bailiffs, the police investigators, the personality investigators and any interpreters or experts.

Lawyers are not bound by this confidentiality but are bound by professional secrecy. The disclosure of confidential information by breaching confidentiality or professional secrecy can be sanctioned by imprisonment for one year and a €15,000 fine.

50 How would you advise a company that has received a request from a law enforcement authority in your country seeking documents from another country, where production would violate the laws of that other country?

The corporation should retain external counsel to obtain a legal opinion on the law of the country in which the documents sought are located. Co-operation with the French and foreign authorities – and perhaps with the diplomatic authorities of both countries pursuant to formal co-operation agreements – may be necessary for the production to be carried out appropriately.

61 Does your country have secrecy or blocking statutes? What related issues arise from compliance with a notice or subpoena?

Yes, France has both a country-specific blocking statute and privacy statutes.

The French Blocking Statute prohibits the communication of economic, commercial, industrial, financial or technical documents or information to foreign authorities or their use as evidence in judicial or administrative proceedings abroad, subject to mechanisms afforded under international agreements or treaties, such as the Hague Evidence Convention or a mutual legal assistance treaty. Data protection legislation, in that it can prohibit the transfer of data outside Europe, could also constitute a type of blocking statute.

Several secrecy laws exist, depending on the interests at play (e.g., banking, security and defence, medical, journalism source or corporate secrecy). To ensure the preservation of these secrecy provisions, communications should be properly addressed when responding to a foreign authority.

Bank secrecy, for instance, should be addressed when a notice or subpoena concerns a financial institution. These institutions owe a legal duty to their customers not to disclose information about their affairs to third parties. Any banking institution that discloses information about customers faces criminal sanction pursuant to the Monetary and Financial Code and the Criminal Code.

62 What are the risks in voluntary production versus compelled production of material to authorities in your country? Is this material discoverable by third parties? Is there any confidentiality attached to productions to law enforcement in your country?

Voluntary production is limited to very specific circumstances, namely when foreign authorities are involved or there is a strategic interest in doing so in an ongoing investigation.

All material produced is included in the criminal file and is accessible, under limited circumstances, to defendants (indicted and assisted witnesses) and civil parties. Although legal professionals are bound by professional secrecy, they are not bound by the confidentiality of the inquiry. They are free to share information – not documents – from the file with their clients, who can then share the information with third parties.

Prosecution and penalties

63 What types of penalties may companies or their directors, officers or employees face for misconduct in your country?

Corporations sanctioned for misconduct can face fines, payment of civil compensation to victims, disgorgement of profits resulting from the offence, dissolution, publication of the sanction in the press and debarment from bidding for tender for certain specific offences.

Individuals sanctioned for misconduct can face fines, imprisonment, payment of civil compensation to victims or a ban on undertaking specific managerial positions. Directors, officers or employees also face sanctions from their company, including dismissal.

Hearings are rarely closed. Therefore, corporations and individuals face the risk of having their identity disclosed in the press.

64 Where there is a risk of a corporate’s suspension, debarment or other restrictions on continuing business in your country, what options or restrictions apply to a corporate wanting to settle in another country?

The EU Directive on public procurement has been transposed into French law, prohibiting companies found guilty of specific offences (e.g., corruption, fraud, money laundering, terrorism or embezzlement and misappropriation of property) from bidding in public procurements throughout the European Union for five years – unless the sentencing decision specifically provides for a more limited period.

French law provides that corporations cannot bid for public procurements if they have previously been sanctioned definitively by a court of law for certain offences, namely corruption, extortion or probity offences.

65 What do the authorities in your country take into account when fixing penalties?

The principle of personalisation of a sanction applies in France to corporations and individuals.

Regarding the CJIP public interest fine, the AFA-PNF Guidelines specify that the fine should reflect the illegal profits derived by the corporation from the offence but can also have a punitive dimension. With respect to the punitive aspect, the Guidelines consider the corruption of a public official, the fact that the legal entity falls within the scope of the compliance obligation of the Sapin II Law, the existence of possible convictions or sanctions for similar offences, any attempt to conceal the offence, and the repeated or even systemic nature of corruption. Gains in market share or increased visibility may also be considered when determining the amount of the fine.

Resolution and settlements short of trial

66 Are non-prosecution agreements or deferred prosecution agreements available in your jurisdiction for corporations?

The French legal system does not offer non-prosecution agreements.

The CJIP is available, allowing corporations accused of corruption, probity offences or tax fraud to settle. This will imply a financial fine, without constituting an admission of guilt – thereby allowing corporations to continue bidding for public procurements – except in cases following an inquiry. Discussions are being held regarding extending CJIPs to apply to serious environmental crime.

67 Does your jurisdiction provide for reporting restrictions or anonymity for corporates that have entered into non-prosecution agreements or deferred prosecution agreements until the conclusion of criminal proceedings in relation to connected individuals to ensure fairness in those proceedings?

There is no correlation in French law between a settlement with a corporation and criminal proceedings regarding individuals. There are therefore no reporting restrictions or anonymity for corporates beyond the confidentiality of criminal settlement negotiations.

The AFA-PNF Guidelines provide that the aim of internal investigations conducted by a prosecuted company, and communicated to the prosecutor, is also to determine individual liabilities.

68 Prior to any settlement with a law enforcement authority in your country, what considerations should companies be aware of?

If a case is likely to involve foreign jurisdictions, companies should assess the consequences of admitting guilt in France, namely regarding the principle of ne bis in idem.

Corporations should also be mindful that signing a French plea bargain – as compared with signing a CJIP – amounts to an admission of guilt, thus preventing them from bidding for public tenders.

69 To what extent do law enforcement authorities in your country use external
corporate compliance monitors as an enforcement tool?

Law enforcement authorities cannot use external corporate compliance monitors as an enforcement tool, as the AFA constitutes the official compliance monitor, with a monopoly on the supervision of the compliance programmes of legal entities that have signed a CJIP, in accordance with the Sapin II Law.

In specific cases, the legal entities have recourse to experts (e.g., law, accounting or audit firms) to process the AFA requests.

70 Are parallel private actions allowed? May private plaintiffs gain access to the authorities’ files?

Should alleged victims demonstrate legal standing, they will be allowed to join the criminal procedure as civil parties and, as such, will be granted access to the criminal file and be able to submit requests for investigative acts.

Moreover, alleged victims can initiate a criminal investigation by filing an official complaint to that effect.

Private parties do not normally have access to the investigation files held by administrative authorities.

Publicity and reputational issues

71 Outline the law in your country surrounding publicity of criminal cases at the investigatory stage and once a case is before a court.

Investigations led by a prosecutor or investigating judge are confidential.

As defendants and victims have access to the criminal file but are not bound by secrecy, it is sometimes very difficult to keep communications and information confidential. To prevent leaks of fragmented or inaccurate information or to avoid disrupting public order, the public prosecutor may, either ex officio or at the request of the investigating court or the parties, communicate on objective elements of the proceedings, without making an assessment on the charges.

Members of the press can be present and cover the hearing – albeit microphones and cameras are not allowed in the courtroom. Defendants and victims are free to make statements within the limits of the freedom of expression.

72 What steps do you take to manage corporate communications in your country?
Is it common for companies to use a public relations firm to manage a corporate crisis in your country?

It is common to have press releases, communications and crisis management strategies prepared and, when appropriate, public relations firms assisting. The spokesperson is often a lawyer on the case, especially when individuals are involved.

73 How is publicity managed when there are ongoing related proceedings?

Publicity is part of the overall strategy, namely in high-profile matters that attract political attention and have numerous civil parties.<§^>

Duty to the market

74 Is disclosure to the market in circumstances where a settlement has been agreed but not yet made public mandatory?

There are no circumstances in which a judicial settlement could be agreed privately. CJIPs and plea bargains offered by public prosecutors are officially approved by judges by way of public hearing. Moreover, CJIPs are published on the AFA website.

There is no obligation to disclose settlements with administrative authorities to the public.

Anticipated developments

75 Do you expect to see any key regulatory or legislative changes emerge in the next year or so designed to address corporate misconduct?

France is proactive – various publications indicate regulatory and legislative amendments for the coming years.
The Criminal Policy Circular on the Fight Against International Corruption published in 2020 by the Minister for Justice confirms France’s intent to efficiently reduce corruption and the PNF’s paramount importance internationally.<§p>

The Airbus CJIP in a corruption case opens the way to negotiated justice – encouraging self-reporting, and full co-operation, including with foreign authorities.

The aim of the Gauvain Report is to restore French and European sovereignty and protect companies from extraterritorial control. It provides recommendations to reinforce the French legal framework applicable to foreign procedures targeting French companies, including strengthening the French Blocking Statute, introducing legal privilege for in-house counsels, and protecting data from the US Cloud Act by the threat of fines similar to those applicable to GDPR violations.

The following have also emerged during 2020:

  • a draft bill on extending CJIPs to apply to serious environmental crime;
  • the publication of practical guides by administrative authorities (e.g., CNIL and AFA) on professional reports and the anti-corruption compliance function; and
  • reinforcement of the national legal framework on the fight against money laundering and financing of terrorism.

The European Public Prosecutor Office, a New Key Player for Corporate White-collar Crime Investigations?

The European Public Prosecutor Office, a New Key Player for Corporate White-collar Crime Investigations?

By Julie Zorilla, Princessa Fouda and Julia Velho for the American Bar Association International Law Section Publications.

***

Facing widespread concern about the huge losses affecting the European Union (“EU”) budget due to specific serious offences, the EU has set an independent European Public Prosecutor’s Office (the “EPPO”) up by a Council regulation dated 12 October 2017 (“Regulation”). Indeed, and despite the establishment of several European institutions such as Eurojust (2002) and OLAF (1999), the offenses related to the European Union budget were deemed insufficiently investigated and prosecuted in Europe. Similarly, the investigations conducted by Member States’ national authorities, which jurisdiction ceases at national borders, suffered from gaps in the judicial cooperation. The EPPO, as the first EU’s supranational authority is therefore responsible for investigating and prosecuting criminal offences affecting its financial interests in 22 out of the EU’s 27 Member States (“Participating countries”), including fraud, cross-border VAT fraud, money laundering, misappropriation and corruption. The EPPO will start operating as of 2021, already having appointed the first European Chief Prosecutor in October 2019, Laura Kovesi, and the full College of European Prosecutors in July 2020.   This independent authority which has a wide – even extraterritorial – jurisdiction, would be a potential significant addition to the white-collar enforcement landscape in the European Union that will strengthen complex and global investigations for all companies involved in EU projects or subject to the EU’s VAT regime.

In order to ensure its efficiency, Participating Countries have committed to respect the independence of the EPPO and “to not attempt to influence it in the performance of its assignment”. Similarly, the EPPO will not accept instructions from the EU institutions or national authorities.  From an operational point of view, the EPPO will operate as a single office divided into two levels: central and national level. The central level, which consists of the European Chief Prosecutor and the College of prosecutors, is in charge to (i) determine the criminal justice policy via decisions regarding the strategy and (ii) supervise the investigations conducted at the national level.The decentralized level, which consists of a European Delegated Prosecutor in each Participating country, carries out the investigation and prosecution on the national territory.   This divided structure enables the EPPO to ensure compliance with national rules while remaining independent of countries’ interference as the decisions are issued by the central level.

The EPPO is in charge to enforce the 2017 PIF Directive (“Directive”). This Directive harmonizes the definitions, sanctions and limitation periods of the criminal offences falling within the EPPO’s jurisdiction as well as extensively defines the concept of EU’s “financial interests” and therefore the jurisdiction rationae materiae of the EPPO.  As such, the EPPO will have jurisdiction to investigate offences affecting “all revenues, expenditure and assets covered by, acquired through, or due to the Union budget and the budgets of the institutions, bodies, offices and agencies”.   The Directive also enables the EPPO to pursue both authors and accomplices of these offences. It should be noted that a company can be under an investigation conducted by the EPPO only in the event that the offense has been committed by a person who has a leading position within the company and for the latter’s benefit. To broaden EPPO’s scope, the Directive defines however very briefly the concept of “leading position” based on (i) the power to represent the company (ii) the authority to take decisions on behalf of it, or the authority to exercise control within the company.  Similarly, the Directive makes no difference if the person acted “either individually or as part of an organ” of the company.   It therefore seems that the Directive aims at including a large number of persons within the company whose acts can incur the company’s liability. The purpose is to ease the prosecution of companies.  Further, the Directive only requires the Member States to implement corporate liability, whether criminal or not – administrative for example – with the aim, anew, of extending the scope of the EPPO.   Consequently, it appears that the EPPO will oversee a large number of offences, positioning itself as a new interlocutor that many companies have to consider.

According to OLAF report 2018, of the 84 investigations concluded in 2018, no less than 37 concerned a country outside the Union.   For this reason, the Regulation clearly aims at extending the territorial competence of the EPPO providing that “the EPPO should exercise its competence as broadly as possible so that its investigations and prosecutions may extend to offences committed outside the territory of the Member States”.  The Regulation therefore states that the EPPO will be competent to investigate and pursue foreign companies when (i) the offence is committed in whole or in part within the territory of one or several Member States or when (ii) the person who committed the offence is a national of an Member State or subject to the “Staff Regulations or to the Conditions of Employment”, provided in the last both cases that a Member State has jurisdiction for such offences when committed outside its territory.  Beyond extensive territorial competence, the EPPO also benefits from international cooperation tools. On the one hand, the EPPO will benefit from close cooperation with several EU agencies, inter alia, Eurojust, OLAF and Europol. On the other hand, the Regulation requires enhanced cooperation between the EPPO and third countries – e.g., working arrangements with the authorities of third countries and international organizations regarding the exchange of strategic information, international agreements concerning cooperation in criminal matters concluded by the EU etc.

The EPPO is promoted as the first step for enhanced supranational cooperation, opening the door to European jurisdiction in criminal matters. The Regulation and the Directive have therefore provided the EPPO with tools to become an important player in the European white-collar crime enforcement field in order, inter alia, to increase the level of protection of the EU budget and to provide a safer environment to all economic actors.  Recently created, one can already guess an extension of competence to areas other than European finance. This innovative initiative may indeed serve other cross-border fights such as terrorist crimes or serious environmental crimes. The EU shows a deep interest in increased cooperation in criminal matters at the European level, especially since the European Treaty on the Functioning of the EU foresees the possibility to extend EPPO’s jurisdiction to further forms of “serious crime having a cross-border dimension”.

Published on www.americanbar.org/groups/international_law/publications

PNF opens fewer cases amid pandemic slowdown

PNF opens fewer cases amid pandemic slowdown

France’s main anti-corruption enforcer took on fewer new cases in 2020 than the year before, a dip in activity most likely caused by the coronavirus.

Responding to a Freedom of Information request by GIR, France’s National Financial Prosecutor’s Office (PNF) said that it opened 735 new cases in 2020, down from 757 in 2079.

The PNF currently has 603 cases open in total as of 7 February, according to the agency’s own figures, covering three types of offences: market abuse, probity and damage to public finances.

The PNF defines probity cases as those centring on corruption, influence peddling and embezzlement, favouritism, illegal taking of public interest and electoral fraud.

lt said that it has 372 probity cases open, up from 294 at the end of 2079. Market abuse cases meanwhile went up from 42 to 46 over the same period, while damage to public finances cases, which include investigations into tax fraud and money laundering, went up by one to 245.

French lawyers said they noticed a dip in activity from the agency du ring the first few months of the coronavirus pandemic, but that things largely returned to normal by August 2020.

Thomas Baudesson at Clifford Chance in Paris said that the PNF managed well du ring the pandemic, which made certain investigative tasks like interviews and dawn raids more difficult.

Joydeep Sengupta at Mayer Brown in Paris said that the increase in probity cases may represent the PNF’s bigger appetite for pursuing corruption and tax fraud following its success in various recent high-profile matters linked to prominent multinationals.

The PNF’s efforts to punish corruption have been headlined by it leading the bribery investigation into aircraft manufacturer Airbus that resulted in a record­ breaking foreign bribery settlement. ln January 2020, the Company agreed to pay $4 billion to France, the UK and the US to resolve allegations of bribery offences a cross 16 countries. Other significant enforcement actions include the conviction of Swiss bank UBS in February 2019 for facilitating tax evasion. The bank, which is appealing against the decision, was ordered to pay a €3.7 billion fine. The PNF also signed a €500 million tax resolution with Google’s European arm in September 2019.

The cases contributed to the agency winning GIR’s enforcement agency of the year award in October.

Among the PNF’s biggest current cases are a tax evasion investigation into the French arm of JPMorgan, which has not commented publicly on the matter, and a corruption probe focused on French engineering company Alstom and the sale of its energy division to US energy company General Electric. The company denies wrong doing.

The PNF began operations in 2014 and significantly boosted its activity after it was granted the power to offer companies judicial public interest agreements, France’s answer to a deferred prosecution agreement, under the sweeping Sapin Il anti-corruption law in 2017.

Commenting on the agency’s performance over the past two years, Julie Zorrilla at Navacelle in Paris said: “the PNF has in effect matured into a coherent, consistent body, building on acting principles open to discussion with lawyers, yet still demanding“.

James Thomas for Global Investigations Review (GIR)
February 4 2021

IBA – Anti-Corruption Specialists Video – Anti-corruption developments around the world

IBA – Anti-Corruption Specialists Video
Anti-corruption developments around the world

Within the framework of the 17th Annual IBA Anti-Corruption Conference, the IBA Asset Recovery Subcommittee and the IBA Anti-Corruption Committee invited anti-corruption experts from around the world to Navacelle’s offices in Paris to discuss the latest anti-corruption developments in their jurisdictions.

The panel was chaired by the Senior Vice-Chair of the IBA Asset Recovery Subcommittee, Kate Mc Mahon , was released during the 2020 IBA meeting “Virtually Together”, and brought together a multitude of speakers – James Tillen, Partner at Miller & Chevalier Washington DC, Kara Brockmeyer, Partner at Debevoise & Plimpton LLP, Sabine Stetter, Managing Partner at Stetter Rechtsanwälte, Leopoldo Pagotto, Partner at FreitasLeite Advogados, Leah Ambler, Partner at RE/MAX Professionals Inc. and Stephane de Navacelle, Partner at Navacelle.

1. Overview: anti-corruption laws around the word

United Kingdom

In the UK, the Bribery Act 2010 came into force in July 2011 (…) to deal with corruption”, Kate Mc Mahon.

The Serious Fraud Office is the primary organization that deals with corruption in our country”, Kate Mc Mahon.

United States

The Foreign Corruption Act (FCPA) enacted in 1977 (…) prohibits covered entities and individuals from providing anything of value directly or indirectly to non-us officials to obtain a benefit”, James Tillen.

The FCPA doesn’t prohibit either commercial bribery or the taking of a bribe, it only prohibits the giving of a bribe. The US Government research other conduct such as the taking of a bribe or commercial bribery to other statutes such as the money laundering statutes”, Kara Brockmeyer.

Germany

The anti-corruption provisions concerning governmental officials have been in place in Germany for more than one hundred years”, Sabine Stetter.

Regarding the anti-corruption provisions concerning the private business sector, two different situations need to be distinguished. On the one hand, it is prohibited that advantages are being granted which can, in an abstract general sense, have an impact on competition. On the other hand, it is prohibited to grant advantages in order to make employees of companies breach their duties with regard to the company”, Sabine Stetter.

 “In Germany, the Public Prosecutor’s Offices are in charge of investigating corruption. There are special units which do nothing else but investigate corruption”, Sabine Stetter.

France

A law was passed, [four] years ago in December 2016, which we globally called the Sapin II Law”, Stephane de Navacelle.

 “It’s a huge change for us in France. The goal is to mirror the USA FCPA and the UK Bribery Act”, Stephane de Navacelle.

 “What it does, in a very French approach of the issue, is create a specific legal obligation with specific criteria for compliance system for companies (…) monitored by a specifically newly created agency, the Agence Française Anti-Corruption (AFA)”, Stephane de Navacelle.

Brazil

Brazil has had anti-corruption legislation for several decades. However, enforcement was ineffective. This scenario began to change in 2014 when Car Wash Operation started. It is the largest anti-corruption investigation that the world has ever seen”, Leopoldo Pagotto.

Brazil legislation has ruled out pretty much the same conduct, which is prohibited in most countries, the payment of improper advantage to public officers is considered as a criminal offense and also a civil and administrative offense for a corporation”, Leopoldo Pagotto.

As regard companies, the enforcement is made by several administrative and quasi-judicial bodies (…) the main body is CGO which is in charge of prosecuting the companies involved in corruption scandals”, Leopoldo Pagotto.

2. Overview: anti-corruption cases around the word

United-States

One recent case that highlights the scope of the FCPA and a recent phenomenal coordination settlement with the US Government and other countries, is Keppel Marine Offshore. Keppel Marine Offshore is a Singaporean company and has a US subsidiary and the parent entered into deferred prosecution agreement with US authorities relating to conspiracy to violate the anti-bribery provisions of FCPA. The US subsidiary entered into a plea agreement on the same charges”, James Tillen.

Relatively recently, the US and other countries brought an action against two telecommunications companies: VimpelCom and Telia. All torts, the two companies paid 1.76 billion dollars to resolve charges that they bribed the daughter of the former president of Uzbekistan (…) the reason why these actions are interesting is that these actions did not just bind the United States but also there was a parallel with other countries, the VimpelCom action was the first time that the US took action with the Netherlands, Kara Brockmeyer.

Germany

Probably the most important corruption scandal in Germany is still the Siemens scandal. The investigation by the Public Prosecutor Office in Munich in Germany started in 2006 with spectacular searches. There was also an investigation by the Department of Justice and the Securities and Exchange Commission in the United States”, Sabine Stetter.

In Germany, there is no corporate criminal liability, but we have a provision that led to corporate fines and disgorgement. Siemens had to pay two fines: one fine in the amount of 201 million euros and the other fine was 395 million euros which were actually for the lack of supervision due to a compliance system which was insufficient”, Sabine Stetter.

Brazil

Car Wash Operations has been led mostly by the federal police and the federal prosecutor. It started out of an investigation about money laundering (…). But after investigations, it became clear that this scam was much larger than just money laundering operations”, Leopoldo Pagotto.

It’s very hard to estimate how much money has been lost by the Brazilian government as a result of corruption. Economists have tried to make estimates but all of them are very limited in scope. So far, more than 3 billion dollars have been recovered”, Leopoldo Pagotto.

3. In practice: eliminating corruption

A global and consistent standard against corruption around the world is vital to eliminating this crime, and what is needed is the harmonization of laws across jurisdictions so everyone is playing by the same rules”, Leah Ambler.

Foreign corruption cases are one of the few areas where there are incredibility difficult cases to investigate and prosecute without the cooperation of other states (…) it is vitally important that there be a consistent standard that is applied by prosecutors across every jurisdiction, Kara Brockmeyer.

A global and consistent anti-Corruption enforcement is important because there is globalization nowadays (…) it means that anyone can transfer money and proceed with crimes from one country to the other in less than two or three minutes. This makes asset tracking and punishment of individuals and companies involved very difficult”, Leopoldo Pagotto.

 “It is very important to make sure law enforcement works in all countries all over the world when it comes to corruption. Local law enforcement is something that is taken very seriously and it is an important factor in the fight against corruption worldwide”, Sabine Stetter.

 “The participation of civil society is also an important factor to decrease corruption. In the past years, the increasing awareness about corruption led the population to engage in a serious civic campaign to change and amend legislation (…) this is how actually democracy can work in the fight against corruption”, Leopoldo Pagotto.

 “The large part due to the effort of the Organization for Economic Co-operation and Development (OECD). Many other countries have now similar anti-corruption laws and are enforcing them”, James Tillen.

View the video

Kate Mc Mahon (Edmonds Marshall McMahon), James Tillen (Miller & Chevalier Washington DC), Kara Brockmeyer (Debevoise & Plimpton LLP), Sabine Stetter (Stetter Rechtsanwälte), Stéphane de Navacelle (Navacelle), Leopoldo Pagotto (FreitasLeite Advogados), Leah Ambler (Re/Max professionals Inc) and Stephen Baker (Baker & Partners).

Update of the French Anticorruption Agency’s recommendations regarding anticorruption programs

Update of the French Anticorruption Agency’s
recommendations regarding anticorruption programs

Pursuant to the provisions of French Sapin II Law (“Loi Sapin II”)1, the French Anticorruption Agency (“AFA”) issued recommendations aimed at assisting public and private legal entities – whether they are subject or not to the obligation provided for in Article 17 of the Sapin II law to implement preventive and detective measures against corruption2 – in their initiatives to prevent and detect integrity violations within their entities.

As well as the national diagnosis launched by AFA to assess the effectiveness of corruption prevention and detection systems implemented within companies3, the recommendations’ update is part of the first steps of the multi-year national anti-corruption plan 2020-2022 carried out by AFA and approved by the government in early 2020 4.

AFA therefore improves its recommendations as to the 8 pillars of Article 17 of Sapin II law. Hence, the scope of the risk mapping is extended to the risks of influence peddling5. AFA further recommends the extension of the third-party category submitted to due diligence to include third parties with whom the company would like to enter into a relationship for the purpose of an acquisition or for sponsorship6. In addition to training initiatives intended for managers and most exposed employee, AFA urges to raise all employees’ awareness regarding the fight against corruption7. With regard to the internal control and audit system, AFA recommends the establishment of a specific procedure setting out “the processes and situations involving identified risks, the frequency of controls and their procedures, the persons in charge of these controls and the rules for transmitting the results to the management body8.

Furthermore, AFA strengthens the authority of its recommendations. Despite not being legislative in nature, the recommendations are now “opposable” against AFA as part of its inspections9. Accordingly, in the context of an AFA inspection, companies henceforth benefit from a presumption of compliance when they indicate having designed their compliance program in accordance with AFA’s recommendations. It then falls to AFA to demonstrate that this application has been “ineffective, incorrect or incomplete”.10. This amendment is in line with and confirms the decision of the Sanction Commission issued on July 4, 2019, which states that when a company indicates having complied with the methodology recommended by the AFA, “it must be deemed to have provided sufficient information, unless the Agency proves that it failed, in reality, to follow the recommendations11.

Check out the new AFA’s recommendations.

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Julie Zorrilla, Partner Navacelle Paris
Princessa Fouda, Associate Navacelle Paris
Héloïse Vigouroux, trainee lawyer EFB

Plea Bargaining and Deferred Prosecution Agreements in France

Plea Bargaining and Deferred Prosecution Agreements in France

By Stéphane de Navacelle, Clémentine Duverne et Thomas Lapierre for the Association of Corporate Counsel (ACC)

***

To avoid long and publicly exposed trial, legal persons and their executives may resort to negotiated justice mechanisms in France such as deferred prosecution agreement (“Convention Judiciaire d’Intérêt Public”, or “CJIP”), or plea bargaining (“Comparution sur reconnaissance préalable de culpabilité”, or “CRPC”). French criminal law does not however have a very long-standing tradition of negotiated justice and the CJIP introduced by the Sapin II law in 2016 renewed the use of the CRPC. The following may be useful to know for in-house counsel advising businesses that operate in France (or working in French businesses that operate in other countries):

Legal entities may enter into CJIP, i.e., settlement with prosecutors for white collar offences, subject to court approval. A CJIP involves inter alia (1) payment of a fine; (2) and implementation of a compliance program. A CJIP also circumvents the drawbacks of a criminal conviction for legal entities such including the exclusion from public procurements.

The opportunity to offer a CJIP and the amount of the fines are assessed by the prosecutor on three main criteria: (1) the legal entity’s criminal background; (2) the entity’s voluntary and prompt disclosure of facts to the authorities; (3) and cooperation with authorities, highlighted by the entity’s early initiative to conduct internal investigation.

A CJIP does not preclude criminal proceedings against the legal entity’s executive managers and admission of facts made in the CJIP will necessarily influence the defence of individuals involved. In that respect, in conjunction with a CJIP, Public prosecutors may offer or agree to a plea bargain (“CRPC”) with the executives subject to their prior admission of guilt. The CRPC entails reduced sentences, yet it has the same effect as a criminal conviction.

When companies face allegations of white-collar crimes, in-house counsels should therefore act promptly and determine whether French Law is applicable and whether the conditions to resort to negotiated justice mechanisms are met. They could also pre-emptively initiate internal investigations and enhance their compliance program to demonstrate cooperation with authorities. To this end, in-house counsels may seek independent attorneys to build a proactive and adequate strategy, to conduct independent internal investigation, negotiate with prosecutors and later foster improvements of the entity’s compliance program.

Stéphane de Navacelle, Partner Navacelle Paris,
Clémentine Duverne, Partner Navacelle Paris,
Thomas Lapierre, Associate Navacelle Paris.

Read full article on ACC
January 7 2021

Decision of the Versailles Court of Appeal on December 9, 2020: first clarifications on the provisions of the corporate duty of vigilance law

Decision of the Versailles Court of Appeal on December 9, 2020: first clarifications on the provisions of the corporate duty of vigilance law.

According to Article 1 of the “corporate duty of vigilance law”1, codified in Article L.225-102-4 of the Commercial Code, companies registered in France that employ at least five thousand employees within headquarters and their direct or indirect subsidiaries, or companies registered in France or abroad that employ at least ten thousand employees within headquarters and in their direct or indirect subsidiaries, have the obligation to establish and implement a due diligence plan, aimed at identifying and preventing risks of serious harm to human rights, fundamental freedoms, health and safety, and the environment, on account of their activities and those of their subsidiaries, suppliers and subcontractors with whom they have an established business relationship, and when these activities are related to this relationship. In the event of non-compliance with this legal requirement, and within three months of formal notice, any person with standing may request the competent court to compel the company to comply with it by injunction, under penalty if necessary. The law does not however, provide any clarification as to the competent court to hear such injunction claims.

While welcomed for its innovative character, the corporate duty of vigilance law was criticized from the outset – during the parliamentary debates – for its lack of clarity. The Versailles Court of Appeal’s decision of December 9, 2020, although not yet final, provides much-needed clarification in relation to the competent court to hear injunction proceedings2.

In this decision, in which the appellant associations, i.e. Friends of the Earth France, National Association of Professional Environmentalists and Africa Institute for Energy Governance, faced SA (Société Anonyme) Total, the Court confirmed the lack of jurisdiction of the Nanterre judicial court. Rather, it confirmed the jurisdiction of the commercial court to oversee the injunction proceedings brought by French and Ugandan NGOs, seeking to compel Total to comply with its obligations under the corporate duty of vigilance law, for activities operated by two of its subsidiaries and concerning two oil projects in Uganda and Tanzania.

In doing so, the Court reasoned in two stages.

The Court recalled the principle that the commercial court is a special jurisdiction and that only the application of a special rule can justify moving away from the common law jurisdiction of the judicial court. The Court drew from the lack of clarity of the provisions of the corporate duty of vigilance law in relation to jurisdiction that there was no special rule for resolving the dispute and determining which of the commercial court or the judicial court had jurisdiction.

Accordingly, it analyzed the common law provisions of the French Commercial Code. The Court of Appeal stressed that to characterize a dispute relating to commercial companies, it was important to show a direct link between the facts at the origin of the claim and the management of the company, referring to Article L. 721-3 2° of the Commercial Code, which provides that “the commercial courts rule on [disputes] relating to commercial companies” and “those relating to commercial between all persons”. Consequently, the Court decided that it was irrelevant whether the disputed act was the act of a salesperson, of a manager or of the parent company, thereby choosing not to follow the argument of the NGOs, which maintained that a direct link between the facts subject of the claim and company management by a de facto or de jure manager must exist to trigger the special jurisdiction of the commercial court.

To establish the link between the facts at the origin of the claim, the establishment of a due diligence plan and the management of the company, the Court of Appeal partially followed SA Total’s reasoning. It noted that the legislative provisions of the corporate duty of vigilance law were introduced in article L. 225-102-4 of the Commercial Code, in Title II concerning commercial companies, in Chapter V concerning public limited companies and in Section 3 concerning shareholders’ meetings. It also emphasized that the due diligence plan and the report on its implementation were to be appended to the annual management report, which is presented at the shareholders’ meeting, thus integrating social and environmental issues into the business of the commercial company. The Court held that the corporate duty of vigilance law necessarily impacts the functioning of the company, in that it imposes an obligation of transparency and disclosure on corporate governance. The Court thereby inferred that there is a link between the establishment of a due diligence plan and the management of the company.

The Court pointed to other obligations imposed on companies by the corporate duty of vigilance law that highlight the existence of a link between the due diligence plan and the management of the company. For instance, companies are required to set up an alert mechanism that must be established “in consultation with representative trade union organizations”. This mechanism reinforces the idea that the elaboration of the due diligence plan is the responsibility of company management because it requires an exchange with social partners.

Finally, the Court rejected the idea of a jurisdictional option that was possible under the mixed act theory. On the contrary, the Court of Appeal considered that the disputed act could not be characterized as a civil act – the company establishing the due diligence plan and remaining the sole entity subjected to this legal requirement.

This appeal-level court decision could be overruled, unless the Cour de cassation were to be called to issue a final ruling on the matter. Let us wager however, that the continuation of this case, before the Cour de cassation or on the merits, will bring new and warranted clarifications as to the application and even the effectiveness of this corporate duty of vigilance law.

Julie Zorrilla, Partner Navacelle Paris
Sarah Reilly, Associate Navacelle Paris
Julia Velho, trainee lawyer EFB

Navacelle contributes to the International Bar Association Alternative and New Law Business Structures Committee and the Professional Ethics Committee joint newsletter by an article on “Cloud computing and the challenges facing professional secrecy”

NAVACELLE contributes to the International Bar Association Alternative and New Law Business Structures Committee and the Professional Ethics Committee joint newsletter by an article on “Cloud computing and the challenges facing professional secrecy”

Read article on www.ibanet.org

During the Covid-19 crisis and the resulting lockdown, the use of telework in France increased considerably, including in law firms.

In light of this, the French National Commission for Data Protection and Liberties (CNIL) published recommendations to better ensure personal data security. Referring to a list of certified products1, the CNIL advised that companies equip employee workstations with firewalls, encryption tools, antivirus software and, for cloud usage, protocols guaranteeing the confidentiality of the destination server, authentication mechanisms and regular verifications of access logs to limit the risk of intrusion2.

These information security considerations are relevant for lawyers, for whom the principle of professional secrecy in relation to client information and correspondence is critical. While professional secrecy was historically ensured in a material fashion, with client information preserved in paper files, client information now extends beyond the realm of the law firm offices, with the prevailing trend of digitalisation of the legal profession.

An enhanced accompanying regulation of cloud computing is thereby necessary to ensure the prevention of loss, theft or leaks of client data and uphold the cornerstone principle of the profession.

Cloud computing runs the risk of going against professional secrecy

A robust legal and regulatory framework lays the foundations of professional secrecy

On a European level, professional secrecy is enshrined as a fundamental right by the European Court of Human Rights. It is covered by Article 8 of the European Convention on Human Rights on the right to respect for private and family life in that it protects ‘the confidentiality of all “correspondence” between individuals’ and ‘affords strengthened protection to exchanges between lawyers and their clients’3.

Article 1.1 of the Charter of Core Principles of the European Legal Profession expressly lists ‘the right and duty of the lawyer to keep clients’ matters confidential and to respect professional secrecy’4. Article 2.3. of the Code of Conduct of the Council of Bars and Law Societies of Europe (CCBE) stresses the importance of confidentiality5. These provisions showcase the benefit of protection awarded to lawyer-client communications but also the lawyers’ duty to ensure confidentiality and professional secrecy – as do the provisions in France on a national level.

Article 66-5 of the Law of 31 December 1971 provides that ‘in all matters, be it for counseling or litigation […] correspondence exchanged between both parties, or between lawyers […] and all documents in the file are covered by professional secrecy’6. Article 2 of the National Internal Rules applicable to lawyers provides that ‘professional secrecy is a matter of public order. It is general, absolute and unlimited in time’7.

Lawyers are thereby prohibited from waiving professional secrecy in all circumstances – and this even when permitted to do so by their client – save for expressly limited cases. Indeed, Article 4 of the Decree of July 12, 2005, provides that ‘subject to the strict requirements of their own defense before any court of law and to the cases of declaration or disclosure provided for or authorized by law, lawyers shall not, in any matter, make any disclosure that contravenes professional secrecy’8.

Lawyers can be held criminally liable should they breach professional secrecy. Article 226-13 of the Criminal Code provides that ‘the divulgation of information of a secret nature by a person who is in possession of it either by state or profession, or because of a temporary function or mission, is punishable by one year’s imprisonment and a fine of 15,000 euros’9.

This marked obligation to maintain professional secrecy in all circumstances warrants heightened scrutiny on the part of lawyers when considering the risks posed by the increasing digitalisation of the profession.

A digitalisation of the profession poses risks to professional secrecy

Many law firms now operate with cloud computing, which can jeopardise professional secrecy if data is lost, stolen, or seized.

Loss and theft of data can be the result of accidental deletion, hacking, or insufficiently secure access to cloud systems. Solutions to mitigate these risks are available, such as user identity control, encryption key changes and agreements with cloud service providers that allow for switchover systems or data recovery. They fall short, however, of alleviating lawyers of their ethical obligations.

Seizure of data on the cloud, while complexifying raid operations in law firms by dematerialisation, can increase the risk of data that is covered by professional secrecy being seized – all the more so when involving foreign investigation and prosecution authorities.

Article 56-1 of the Criminal Procedure Code10 governs the conduct of raids in law firms or lawyers’ homes and identifies protective measures for professional secrecy. For example:

  • a judge and the head of the Bar (Bâtonnier) must be on-site to oversee the raid;
  • the Bâtonnier can consult the seized documents and contest the seizure of documents before a judge; and
  • the judge must ensure that the raid does not obstruct the exercise of the legal profession.

Some provisions may encroach upon the protections of this article. For instance, in the move towards fighting cybercrime, Article 57-1 of the Criminal Procedure Code on raids11 was amended to add that investigation authorities can carry out remote information system searches, be they located on-site or in another system accessible via the on-site system.

Article 56-1 of the Criminal Procedure Code does not expressly prohibit remote information system searches12, thereby creating somewhat of an uncertain legal landscape regarding the extent to which cloud information covered by professional secrecy is protected from raids.

Furthermore, Article 706-102-1 of the Criminal Procedure Code13 pertaining to crime and organised crime, provides that the investigating judge (juge d’instruction) can decide to set up, in all locations, a technological mechanism that can access, record, store and transmit computer data, without the consent of the persons involved. While Article 56-1 of the Criminal Procedure Code implies that such a mechanism should not be used for automated data processing systems located in a lawyer’s office or home, it is not excluded that it could be used when the location of a data processing service provider, for example for cloud computing, is outsourced by the law firm, in detriment of professional secrecy14.

Soft law regulates cloud computing, empowering lawyers to provide the necessary safeguards to maintain professional secrecy

Ordinal body and administrative agency recommendations guide lawyers

While there is no defined legislative or regulatory framework on cloud computing, recommendations and guidelines have been published on the subject by the CNIL, the CCBE, and the National Council of the Bars (Conseil National des Barreaux (CNB)).

The CNIL issued a dedicated practical guide for lawyers, written from a personal data protection perspective drawn from the law on information technology and freedoms15. It states that ‘the lawyer, as the one responsible for processing the information, is bound by a duty of security [and] must take all necessary measures to guarantee its confidentiality’16, adding examples of measures and specifying that cloud computing ‘raises issues of the qualification of the parties, the applicable law, the effective exercise of the rights and supervision of international transfers of personal data’17.

The CCBE issued guidelines for lawyers using cloud computing, recommending that prior to signing a related contract, lawyers must first conduct a preliminary review of the cloud computing services, including:

  • the applicable data protection professional secrecy legislation to ensure that there is no obligation to disclose data to non-European national authorities;
  • the data encryption procedures;
  • the due diligence performed on the provider;
  • the security of the data centre; and
  • the level of risk associated with the information processed.

The lawyers must determine the relevance of negotiating contractual clauses and informing the customer about ‘the legal standards regarding data protection, privacy and professional secrecy in the countries where the servers are located’18.

The CNB issued a Vademecum of digital ethics, which includes the above-mentioned CCBE recommendations19 A guide for lawyers and the General Data Protection Regulation (GDPR) was also published, stating that lawyers must be ‘particularly exemplary’ with respect to professional secrecy – a ‘keystone principle’ despite technological evolutions. Lawyers must thereby ensure that their associates and external services providers also have this concern in mind, namely when outsourcing firm data via cloud computing20.

Although these guidelines help lawyers to adopt appropriate security levels when using cloud computing, while still leaving room for flexibility and freedom in their implementation – in keeping with the independent status of the French avocat liberal – it is wholly still up to lawyers to act in compliance with the rules of their profession.

This empowering of the individual benefits some in the lawyer profession, that is, those in a position to negotiate secure information systems and those who have the necessary experience and knowledge. Others, however, exercise their profession with the looming threat of litigation in the back of their minds, as the consequences of non-abidance by the recommended standards remain unclear – be they criminal sanctions on the basis of a breach of professional secrecy, or ethical sanctions by a bar association.

French Bar offers technological solutions to lawyers

In an effort to put into practice the soft law on cloud computing and alleviate the risk of professional secrecy breaches, a private cloud21 was set up in 2016 for lawyers of the French Bar. It provides a connection to a cloud via a dedicated key or dual-factor authentication and offers a messaging system with encrypted archiving, a centralised lawyer directory to facilitate confidential communications and a drive on which the data can also be encrypted. The cloud features automatic encryption alongside encryption that can be performed by the lawyers to ensure that only the concerned lawyer has access to the relevant communications.

This type of initiative is paramount to ensuring that professional secrecy remains attainable to lawyers in a context of increased digitalisation. While it is a first step in the direction of harmonised solutions for lawyers using cloud computing, it does not fully compensate for the shortcomings of soft law regulation.

The legal and regulatory vacuum on cloud computing results in unpredictability of the courts’ stance with respect to a lawyer’s failure to ensure professional secrecy on account of lost, stolen or seized data via cloud. As it stands, lawyers have the duty to oversee that those who are intrinsically linked with the exercise of their profession, including firm associates and external service providers, comply with the issued recommendations. To this extent, lawyers are solely responsible of implementing the necessary safeguards to preserve professional secrecy and must show proof of heightened scrutiny in an age where data crosses walls.

Stéphane de Navacelle, Partner Navacelle Paris
Clémentine Duverne, Partner Navacelle Paris
Sarah Reilly, Associate Navacelle Paris

Notes :

The Inspection of Justice report on the PNF investigation for breach of professional secrecy: attorney-client privilege under spotlight in France

Navacelle contributes to the International Bar Association Criminal Law Publications.
Read article on www.ibanet.org

The Inspection of Justice report on the PNF investigation for breach of professional secrecy: attorney-client privilege under spotlight in France

Over the years, the National Financial Prosecutor’s Office (PNF) has built a solid international reputation by supervising the signing of deferred prosecution agreements (DPAs or convention judiciaire d’intérêt public) with large French companies and most of the time, in cooperation with international authorities such as the United States Department of Justice or the United Kingdom Serious Fraud Office1. Several major concerns over political interference, potential abuse of power and claims of sexual harassment targeting the PNF have however been leaked into the media.

In early 2020, a French newspaper revealed that the PNF2 had carried out investigations had on several lawyers’ phones3 within the context of a preliminary investigation opened in 2014 for breach of professional secrecy and in connection with former President of the French Republic Nicolas Sarkozy’s case.

The investigation aimed at identifying the informer who would have told Sarkozy’s lawyer, Thierry Herzog, that the phone his client used under the false identity of Paul Bismuth, was being tapped. The PNF investigation was linked with the judicial inquiry into influence peddling and corruption involving Sarkozy and Gilbert Azibert, a former magistrate of the French Supreme Court.

The PNF has been probing phone records, also called FADETS, of several Parisian lawyers, including Eric Dupond-Moretti, who filed a complaint for breach of professional secrecy on 30 June 2020. At the same time, the former Minister of Justice Nicole Belloubet referred the matter to the Inspection of Justice.

On 6 July 2020, Dupont-Moretti was appointed Minister of Justice and withdrew his complaint. The investigation opened after this complaint was finally closed by the Prosecutor of Nanterre on 2 October 2020, due to the lack of evidence of a criminal offence.

A report on the inspection of the operation of the investigation conducted by the PNF (the Inspection of Justice Report, the ‘Report’) was published on 15 September 2020.

Although the Inspection of Justice Report expressly mentioned that the provisions of the French criminal procedure code on the requisitions of phones tapping does not provide for any specific obligation with respect to lawyers (such as what may exist for dawn raids in law firms) and concluded that no particular issue in handling the investigation was found, many professionals have highlighted the lack of adversarial process in the preliminary investigation and demanded a strengthening of professional secrecy.

Indeed, given the limited circumstances under which lawyers can demand access to the file at the preliminary investigation stage4, the fact preliminary investigations could be very lengthy and that some investigations can be carried out on lawyers’ phones, some claim that it may lead to a violation of the rights of the defence, which must be strengthened, in particular through enhanced protection of professional secrecy.

According to the Inspection of Justice Report, access to lawyer’s phone records during a preliminary investigation does not violate professional secrecy

The Inspection of Justice considered that investigations carried out on lawyer’s phones were lawful

The Inspection of Justice considered that the public prosecutor could request listing incoming and outgoing calls received and made by specific lawyers. The Report emphasises that the criminal procedure code governing calls requisitions did not contain any restriction related to the practice of a profession whose professional secrecy is legally protected5.

The Report also emphasised that this investigative measure is in line with French jurisprudence. Indeed, the French Supreme Court ruled in 2016 that FADETS did not fall into the category of coercive measures6. The French Supreme Court also ruled that attorney-client conversations can be transcribed in the criminal procedure when they presume the participation of the lawyer in an offence7. The European Court of Human Rights (ECHR) adopted the same criteria in the Versini-Campinchi et Crasnianski v France decision8.

In other words, investigators can listen in to a private conversation between a lawyer and his client to check whether it reveals the lawyer’s involvement in an offence. If it does, then the conversation may be transcribed in the procedure, if not, it should not be transcribed9.

The Report however mentioned that in the investigation at hand ‘the drawing up of police reports on the receipt and use of the data collected attests the investigators’ concern not to expose excessively the private life or professional secrecy of the holders of the lines operated’10.

The Inspection of Justice Report nevertheless pointed out weaknesses on the functioning of the PNF investigations

Although the Report specified that due to the respect of the independence of the prosecutors, the mission did not appreciate the proportionality of the acts of investigation and the duration of the preliminary investigation opened for violation of professional secrecy. It pinpoints ‘a lack of rigour’ in the handling of the PNF investigation and underlined the fact that the preliminary investigation had lasted for more than five years.

In France, the duration of preliminary investigations is uncontrolled due to the principle of prosecutors’ independence.

The Report also emphasised the limited access to a preliminary investigation before its completion, given the fact that a person heard during the investigation (whether freely or in custody) can request access to the proceedings only after a year, and that the refusal is at the discretion of the prosecutor11.

The Report added that the current legal framework with the limited implementation of the adversarial principle provided by Article 77-2 II of the French Criminal Procedure Code revealed the ‘limits’ of this mechanism which does not allow any procedural nullity to be purged before trial12.

Professionals request a strengthening of the rights of the defence at the preliminary investigation stage

Rules governing the protection of professional secrecy during investigations

Under French rules of professional conduct, attorney-client privilege is a general, unlimited and absolute rule13, meaning it applies to the entire correspondence between lawyers and their clients, regardless of its content14. Clients or any authority whatsoever cannot relieve the lawyer of their duty of confidentiality15. A breach of professional secrecy by a lawyer could lead to both criminal and disciplinary sanctions16.

In a decision rendered on 24 July 2015, the Constitutional Council, in charge of reviewing the constitutionality of legislation, ruled that no constitutional provision specifically admit a right to the secrecy of lawyer’s exchanges and correspondence and a right to secrecy of journalists’ sources17.

French law nonetheless provides several guarantees aiming at maintaining professional secrecy in the exercise of specific professional activities. For instance, under the French criminal procedure code, when the public prosecutor wishes to search a law firm, to seize lawyer’s correspondence, they must obligatorily warn the president of the bar18. Real time location of a lawyer at their firm or home is strictly forbidden19. Violations of these rules lead to the nullity of the entire investigation.

The public prosecutor is in charge of controlling the proportionality of the investigative acts20.

Lawyers emphasise the need to strengthen the protection of attorney-client privilege

Underlining that phones requisitions do not contain any restrictions related to the exercise of a profession in which professional secrecy is protected, lawyers asked for additional guarantees such as systematically notifying the president of the bar and giving them the ability to intervene to protect phone data covered by the attorney-client privilege21.

Furthermore, the fact that some preliminary investigations are very lengthy combined with the limited access to the proceedings and the fact that investigations can be carried out on lawyers’ phones reinforced the view that some investigations can infringe the rights of the defence.

Indeed, the Report underlines that lawyers’ representatives met by the mission raised the issue of the insufficiency of guarantees and the lack of adversarial principle in the preliminary investigation22.

A report on behalf of the Commission of inquiry into the obstacles to the independence of the judiciary, dated 2 September 2020, has recommended the reinforcement of the control of the duration of preliminary investigations by the creation of a ‘criminal investigation judge’ who could, after a certain period of time, hear the prosecutor and all parties to the case, before deciding whether to authorise the continuation of the preliminary investigation23.

In his inaugural speech, the current Minister of Justice Eric Dupond-Moretti also stated that ‘I will ensure that preliminary investigations remain preliminary and are not eternal as it is sometimes the case.’ 24

In addition, the report of the mission on the future of the legal profession delivered to the Minister of Justice by Dominique Perben on 26 August 202025, concludes that it is necessary to strengthen the professional secrecy of lawyers, both in terms of defence and advice. It recommends in particular that, in the context of an investigation led by the public prosecutor’s office, getting access to a lawyer’s telephone records should only be possible with prior authorisation of the liberty and custody judge motivated by clear evidence of the lawyer’s participation in the commission of an offence26.

Clémentine Duverne, Partner Navacelle Paris
Julie Zorrilla, Partner Navacelle Paris
Laurine Becker, Associate Navacelle Paris

Notes :

What if future EU mandatory human rights due diligence legislation comes to rescue of French Corporate Duty of Vigilance law?

Navacelle contributes to the International Bar Association European Regional Forum Publications.
Read article on www.ibanet.org

What if future EU mandatory human rights due diligence legislation comes to rescue of French Corporate Duty of Vigilance law?

The 2017 French Corporate Duty of Vigilance Law1 (hereinafter DVL) has established a legally binding obligation for companies which, at the end of two consecutive financial years, employ at least five thousand employees in France or ten thousand within the company and its subsidiaries2, to prepare, publish and implement a vigilance plan.

For the approximately 150 companies falling under the scope of this law3, a vigilance plan must thus provide reasonable measures to be implemented within the company. Those measures aim to identify and prevent serious human rights and fundamental freedom violations resulting from the company’s activities, from activities of its subsidiaries, its subcontractors and its suppliers, or from entities with whom the company has an established commercial relationship4.

However, questions remain with respect to the scope of this law. Indeed, it remains unclear whether it refers exclusively to the first tier of a supply chain (direct contractual partner) or to its additional tiers further along the chain5. In addition, there are no implementation decrees, or clear legal definitions provided by the law of what constitutes a serious human rights violation.

The idea of addressing certain elements of human rights due diligence by establishing laws and policies has been gaining momentum across the European Union (UK’s Modern Slavery Act in 2015, France’s Corporate Duty of Vigilance Law and the Netherlands’ Child Labour Due Diligence Law in 2017) and within the institution (the Timber Regulation in 2013 and the Regulation on Conflict Minerals in 2017).

On 29 April 2020, the European Commissioner for Justice, Didier Reynders, announced that the EU was committing to introduce legislation by 2021, requiring businesses to carry out due diligence in relation to the potential human rights and environmental impacts of their operations and supply chains6.

Faced with the fact that the effectiveness of the French duty of care law remains limited because of these questions regarding its scope of application, many expect a clarification from the European text.

The French Corporate Duty of Vigilance law: ambitious but unclear

A poorly developed due diligence mechanism pertaining to the prevention of human rights violations

Unlike the UK’s Modern Slavery Act for instance, which relies on companies’ information and reporting obligation, the DVL is based on a due diligence mechanism and requires companies to establish, publish and implement a vigilance plan.

In that respect, the law clearly defines five mandatory actions, companies must implement as part of their vigilance plan

  • a risk-mapping that identifies, analyses, and ranks risks of serious violations of human rights and fundamental freedom;
  • evaluation procedures that regularly assess, in accordance with the risk-mapping, subsidiaries, subcontractors or suppliers with whom the company maintains an established commercial relationship;
  • appropriate actions to mitigate risks or prevent serious violations;
  • This alert mechanism must be implemented in unison with trade unions organisations represented within the company concerned; and
  • a monitoring scheme assessing the effectiveness of the measures put in place by the company.

In practice, a study which reported on the first published vigilance plans, highlighted that most companies performed or initiated new efforts to identify an at-risk supplier7.

However, it was also underlined in another report that these objectives were only partially met. This report pointed out that ‘the plans are very heterogeneous, which shows that, faced with the novelty of the exercise, each company has applied the law with disparate levels of requirements, with most plans still very much focused on the risks for companies, and not for third parties or the environment’8. In 2019 the findings were similar, with only 15 per cent of the companies presenting a finalised plan9.

According to a recent report by the Conseil Général de l’Economie submitted to the French Ministry of the Economy, this is mainly due to the lack of understanding of the law by the companies: ‘this fog over the Duty of Vigilance pushes companies to be cautious, waiting for the first cases to come before the courts’10. This goes to show that the requirements of the law and for any due diligence model to be successfully implemented must be clearly defined.

Ineffective remedies for violation of the Corporate Duty of Vigilance law

The DVL provides that if a company fails to establish, implement or publish a vigilance plan containing reasonable measures preventing serious human rights or fundamental freedom violations, any party that has standing may send a formal notice to a company to comply with this obligation.

If the company still fails to meet its obligations after the three-month period, the party can file a claim before the French courts and seek an injunction for the company to be ordered to comply with its obligation, under penalty11. Initially, the law also allowed the courts to impose a civil fine of up to 10m euro in case of non-compliance, but this disposition was struck down by the French Constitutional Council on the basis of the principle of legality12. A company can also be sued for any damages arising out of a violation of its obligations to implement a vigilance plan13.

The employers’ union, as well as some French politicians, voiced their concern regarding the DVL insofar as they argued that it could adversely affect the competitiveness of French companies due to these regulations.

In practice, in June 2019, Total became the first company to receive a formal notice for failing to comply with its duty of care regarding climate change and the human and environmental impacts of its subsidiary and its suppliers in Uganda14. This case was the first to be taken to court, in December 2019.

However, on 30 January 2020 the court ruled that it did not have jurisdiction and ordered for the case to be referred before the commercial courts. The appeal hearing, planned for 28 October 2020, will provide the first indications regarding the practical implementation of this law including issues on jurisdiction.

An expected EU-wide mandatory human rights due diligence law

In regards to EU legislation, the announcement of the European Commissioner of Justice came after the publication of two documents: a study on due diligence requirements through the supply chain by the European Commission (hereinafter the ‘Study’) and a briefing on ‘Human Rights Due Diligence Legislative Options for the EU’ (hereinafter the ‘Briefing’) requested by the European Parliament.

A clearly defined mandatory Human Rights Due Diligence (mHRDD) legislation

The Briefing recommendations sketches the outline of a future law and suggests adopting an extended scope regarding to which companies it should apply and the scope of violations that this legislation would cover.

Considering the difficulty in establishing a threshold, and the fact that the risk of violations is not limited to bigger companies, the Briefing underlines the necessity for the mHRDD legislation to cover every company, specifying nevertheless that an adaptation of the regulation – based on a proportionality principle – to the different size of companies and the different scope of supply chains is needed.

In that respect, it recommends including any company which is established within an EU Member State but also any company placing products or providing services on the European market – regardless of their size or sector15. This would create a larger scope than the DVL provides currently, which is limited to effectively very few companies.

Regarding the scope of violations of human rights that would be covered, the Briefing argues for European legislation to be as broad as possible and mentions requirements for the companies ‘to engage actively in analysing, mitigating and remedying any adverse impacts on human rights’16. In this regard, the only difference with the French law would be to explicitly mention the most important human rights violations that would fall under the regulation to avoid the uncertainties of the French law17 that never defines the concept of a ‘serious violation’.

Finally, regarding the business activities covered, the Briefing underlines the necessity to include all business relations in the value chain in order to refrain from creating arbitrary distinctions between companies with different productions schemes or incentives to circumvent due diligence by further outsourcing18.

A limited European Human Rights Due Diligence (mHRDD) legislation when it comes to sanctions

The future European legislation would not aim at determining sanctions but rather at affording discretion to Member States to adopt the suitable implementation mechanisms.

Indeed, although the Commission study underlines that a prescriptive approach may be more likely to secure an EU ‘level playing field’, the Briefing points out that the scope for an EU due diligence law to define criminal sanctions would be limited given the EU’s restricted jurisdiction in this area19.

Thus, it appears likely that future legislation, should it be implemented, would rely on a dual implementation mechanism. The EU would publish guidelines and directives addressing effective enforcement action, and Member States would be responsible for the determination of effective, proportionate and dissuasive penalties for non-compliance by companies with due diligence obligations.

While the exact regulatory mechanisms of a future European law remain vague, the recommendations drawn from the Briefing and the Commission Study allow the identification of areas of reflection for an effective implementation of a mHRDD. Above all, this future regulation suggests a revision of the French DVL, which would be clarified by following the contours of European legislation. A new revolution after the Sapin II law?

Thursday 5 November 2020

Clémentine Duverne, Partner Navacelle Paris
Julie Zorrilla, Partner Navacelle Paris
Laurine Becker, Associate Navacelle Paris

Notes :

Criminal Policy Circular on the Fight against International Corruption

MINISTRY OF JUSTICE

Paris, June 2, 2020
Date of application: immediate

The Keeper of the Seals, Minister of Justice

To
For action

Ladies and gentlemen, Attorneys General of the Courts of Appeal
Public Prosecutor at the Higher Court of Appeal
Ladies and Gentlemen Prosecutors of the Republic

Anti-Terrorist Public Prosecutor
before the Paris Court of Justice

For information

Ladies and Gentlemen Presidents of the Courts

Director of the French Anti-Corruption Agency
N° NOR : JUSD2007407
N° CIRC: CRIM202009G3/11.03.2020
N/REF : 2020 F 0028 FAl

Title : Criminal Policy Circular on the Fight against International Corruption

Mots clefs : foreign public officials, article 40 of the code of criminal procedure, breaches of probity, concurrent jurisdiction of the National Financial Prosecutor’s Office, Judicial Public Interest Agreement, corruption, international corruption, detection, clandestine offences, whistle-blowers, legal persons, statute of limitations, sanctions, awareness-raising, influence peddling, international influence peddling

Publication : Bulletin officiel and intranet justice

The fight against corruption is one of the most important contemporary challenges facing our democratic societies..

According to the IMF, the total amount of inducements paid each year worldwide can be estimated between 1,500 and 2,000 billion dollars, i.e. almost 2% of the world’s GDP1

According to the European Parliament, corruption alone costs the European economy at least 179 billion euros each year2. According to the European Parliament, corruption alone costs the European economy at least 179 billion euros each year

In addition to these economic costs, there are costs that cannot be quantified in terms of political, social and security impact. This massive, occult and particularly complex form of economic crime represents a threat to the economic and social well-being of our fellow citizens, to confidence in the rule of law and to the security and democratic stability of our societies. On the economic and social level, corruption affects commercial relations by distorting the market and creating illegal distortions of competition. At the political level, the corruptive phenomenon leads to the loss of confidence of citizens and economic operators in the legitimacy of public authorities. Finally, at the criminological level, corruption is the essential tool of organised crime in that it facilitates the development of all sorts of trafficking.

The fight against large-scale corruption has, however, not always been a priority for the international community. This phenomenon has long been presented as an inevitable consequence of poverty affecting only developing countries. To such an extent that some developed countries have been able to adopt a certain tolerance towards companies established on their territory when they had to pay inducements outside the country.

From the end of the 1990s onwards, however, the ever-increasing interdependence of national economies was accompanied by a growing demand from civil society for greater transparency in public and business life.

Several international organizations, such as the World Bank and the International Monetary Fund, have gradually established mechanisms to prevent and detect corruption in development and poverty reduction programmes financed by them.

At the same time, a number of countries, including France, have been at the origin of several multilateral initiatives aimed at establishing a shared general normative framework in the fight against corruption, which have led to the adoption of:

  • the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions signed in Paris on 17 December 1997;
  • the Council of Europe Criminal Law Convention on Corruption signed in Strasbourg on 27 January 1999;
  • the United Nations Convention against Corruption signed in Merida on 9 December 2003.

Following the ratification of these international instruments by Parliament, several laws have been adopted to adapt our legal instruments.

Hence, a new judicial authority specializing in the prosecution of the most sophisticated financial crime, the National Financial Prosecutor’s Office (PNF)3, and a specialized investigation service, the National Office for Combating Corruption and Financial and Tax Offences (OCLCIFF)4 have been created.

The investigative powers that can be mobilised in this area have been extended by the legislator, who has allowed the possibility of using certain special investigative techniques initially reserved for the fight against organised crime5.

Furthermore, to strengthen the deterrent effect of criminal law, the fines incurred for this type of offence have been considerably increased, both for natural and legal persons6.

This repressive facet was then supplemented by the creation of a preventive aspect which resulted in the creation of the French Anti-Corruption Agency (AFA) and the possibility for the judicial authority to impose penalties to reinforce compliance measures.

At the same time, the judicial authority has been provided with a new legal instrument enabling it to punish acts of large-scale corruption committed by legal persons in an appropriate and diligent manner, the Judicial Public Interest Agreement (CJIP)7.

Finally, in order to complete the consolidation of this new anti-corruption structure, the legislator decided to extend the statute of limitations period, particularly in the case of corruption, from 3 to 6 years and to consolidate at the legislative level the case law on the extension of the starting point of this period for occult or concealed offences8.

Thanks to these successive reforms, the judicial authority now has the tools and mechanisms to effectively prosecute this particularly complex and insidious form of financial crime, and thus to ensure that its judicial sovereignty is respected vis-à-vis foreign prosecuting authorities that wish to prosecute French companies.

This Circular sets out the guidelines of the criminal policy in the fight against international corruption.

Table of contents

1. The central role of the National Financial Prosecutor’s Office in the fight against international corruption

1.1 The visibility and recognition of the PNF on the international scene

1.2 The technical and legal expertise, and specific resources of the PNF

2. The use of all existing reporting channels for international corruption

2.1 The different channels for gathering information that can be mobilised

2.2 The role of the PNF in research, analysis and use of information

3. The recourse to an investigation strategy designed to reveal, in a timely and detailed manner, the corruption schemes and to identify all related parties

3.1 The definition and monitoring of objectives

3.2 The applicable criminal qualifications

3.3 The choice of investigative body

3.4 The possible investigative actions and techniques

3.5 The use of seizure and guarantee measures

3.6 The implementation of international mutual assistance

4. The determination of an appropriate mode of prosecution for the purpose of effective, proportionate, and dissuasive sanctions

4.1 With regard to natural persons

4.2 With regard to legal persons

1. The central role of the National Public Prosecutor’s Office in the fight against international corruption

The PNF plays a central role in the fight against international corruption, both because of its visibility and recognition on the international scene and because of its technical and legal expertise and the specific means at its disposal.

1.1. The visibility and recognition of the PNF on the international scene

On the international scene, the PNF is a privileged interlocutor for international organisations (OECD, World Bank, etc.) as well as for foreign judicial authorities specialised in the fight against serious economic and financial crime (Departement of Justice in the United States, Serious Fraud Office in the United Kingdom, Økokrim en Norvège, Ministério Público da União in Brazil, Fiscalia anticorrupción en Espagne, Direcția Națională Anticorupție in Roumania, etc.). The privileged links that the PNF has developed in recent years with the main international partners in the fight against international corruption, and in particular its in-depth knowledge of the judicial practices of the most active foreign authorities in this area, now make it a respected and indispensable interlocutor. This recognition enables its opinion to be valued in the discussions it holds with its main counterparts when it comes to the best possible coordination of the organisation of investigations and prosecutions in accordance with Article 4 (3) of the OECD Anti-Bribery Convention[/note] “Where more than one Party has jurisdiction over an alleged offence referred to in this Convention, the Parties concerned shall, at the request of any one of them, consult with a view to deciding which Party is best placed to prosecute”..[/note]

1.2. The technical and legal expertise, and specific resources of the PNF

At the national level, its proven expertise in the economic and legal mechanisms likely to be implemented, its experience acquired in the processing of sensitive economic data, as well as in the management of negotiations with the companies in question, particularly in the context of the implementation of CJIP, make it a particularly well placed player to deal effectively with this type of cases. Moreover, the PNF is able to mobilize very quickly the technical and human resources necessary to effectively conduct investigations in this area. It is also in close contact with the State services responsible for ensuring compliance with the provisions of Law No. 68-678 of July 26, 1968, known as the “loi de blocage”. This law, which aims to preserve existing judicial cooperation mechanisms, allows the PNF to be informed of foreign criminal proceedings initiated or planned against French companies and to open a mirror investigation if necessary. For all of these reasons, the PNF is naturally called upon to exercise its jurisdiction over all international corruption cases and to centralise their handling. Consequently, when credible suspicions of international corruption are brought to the attention of a public prosecutor’s office, or appear in the course of proceedings, and in continuity with previous instructions to this effect, the PNF should be systematically informed of these cases, without distinction of the stage of the proceedings, the level of responsibility of the persons involved or the financial dimension of the case9.

2. The use of all existing reporting channels for international corruption

The judicial authority can use various methods of reporting to assess the appropriateness of opening investigations.

2.1. The different channels for gathering information that can be mobilised

The nature of the State administrations’ missions and the information they need to process to accomplish them put these entities in a strategic position to detect international corruption involving economic operators. This is particularly the case for the staff of the tax administration, diplomatic and consular posts as well as State and regional economic services which are, like all other public officials, obliged to reveal to the judicial authority the criminal acts of which they become aware in application of the second paragraph of Article 40 of the Code of Criminal Procedure.

In this respect, in recent years, several government departments have introduced codes, charters or guides to raise awareness of ethical issues among all their officials, including the Directorate General of the Treasury and the General Directorate of Public Finances, in order to make them aware of the problem of corruption. It should be noted in this respect that the tax administration – more particularly the Directorate of National and International Tax Audit (DVNI) which is in charge of the external audit missions of large companies – can be a particularly valuable source of information on international corruption.

Within the framework of partnership established with the tax authorities, it would therefore seem appropriate for the PNF to undertake specific work to raise the auditors’ awareness of the possibilities of detecting such facts, when examining the supporting documents, for charges in connection with international contracts.

As part of its missions to monitor the robustness of anti-corruption programmes within large companies, the AFA may also be led to discover suspicious facts that may justify a report to the judicial authority pursuant to Article 3, 6° of the Law of December 9, 2016. The AFA and the PNF thus signed, in March 2018, a protocol to specify the terms of exchange between the two institutions.

Likewise, with regard to the information they acquire in the course of carrying out their missions, several independent administrative authorities may be led to report to the judicial authority suspicions of offences of this nature. This is the case, in particular, of the Competition Authority, French Prudential Supervision and Resolution Authority, Financial Markets Regulator or the High Authority for Transparency in Public Life.

In view of the nature of their tasks, certain public or semi-public operators acting as public investors, in the context of export credits or bilateral development aid may come into possession of relevant information. This is notably the case for Business France, the French Development Agency, Bpifrance, the Government Shareholding Agency and the Deposits and Consignments Fund. Most of these operators have enacted codes or ethical charters designed to detect and prevent corruption in the operations in which they are involved. Here again, it is the responsibility of the PNF to conduct awareness-raising activities aimed at these operators.

multilateral development banks, first and foremost the World Bank, are also a valuable source of reports in this area. These institutions have developed their relations with the judicial authorities of States to promote cooperation in the detection and prevention of corruption through the signing of Memorandum of Understanding.

Financial audits of State administrations or regional authorities carried out by the Court of Audit and the regional and territorial chambers of accounts may reveal situations that are contentious with regard to the rules of public probity. Articles R.141-3 and R.241-3 of the Courts of Audit Code (code des juridictions financières) provide for the judicial authority to be informed, which can be done under the conditions specified by the Circular of 10 December 2014 on relations between the judicial authority and the Courts of Audit.

Within the Ministry of Finance, the Tracfin financial intelligence unitis a major source of information for reporting situations involving a “corruption risk” from a money laundering perspective. This unit is responsible for receiving, analysing, enriching and then forwarding to the judicial authority suspicious information from regulated professionals listed in Article L.561-2 of the Monetary and Financial Code (including banking institutions, financial investment advisers, chartered accountants, notaries, etc.). To facilitate the detection of this type of cases, in 2008 Tracfin distributed a guide to help detect corruption, updated in 2014, which gives examples of vigilance indicators and corrupt arrangements, particularly international.

In the same vein, the PNF could usefully develop relations with the Strategic Information and Economic Security Service (SISSE) and with the intelligence services responsible, under the “National Intelligence Strategy”, for the defence and promotion of our economy.

statutory auditors to disclose any criminal acts of which they become aware in the course of their duties. The scope of this obligation – the breach of which is punishable under Article L.820-7 of the same code – was specified in the Circular of 18 April 2014 relating to the obligation of disclosure of criminal acts by statutory auditors. The presence of statutory auditors in the large companies and the scope of their assignments make them a valuable tool for the detection of corrupt schemes. The PNF will be able to initiate, for the attention of the French High Council for Statutory Auditors, a specific awareness-raising and training programme on the problem of detecting occult payments.

In the same way, the PNF will be able to sensitize representatives of the profession of judicial administrators as to the scope of the obligation of disclosure to which they are subject by virtue of article L.814-15 of the Commercial Code.

Alerts from persons likely to fall under the status of whistleblowers, as provided for by the Law of December 9, 2016, will require special attention and follow-up. This law has made it possible to strengthen the protection of whistleblowers in order to allow any employee or civil servant who becomes aware of acts of corruption to be able to report them without fear of reprisals within his company or administration. Where appropriate, the disclosure of confidential information likely to identify the whistle-blower and the obstruction of the transmission of an alert must be prosecuted by the competent judicial authority on the basis of Articles 9 and 1312, Anticor13 and Transparency International14.

The voluntary disclosure by companies of acts of corruption committed in the course of their international business activities by some of their members is a valuable source of detection. Since 2016, large French companies have been required to implement internal alert systems designed to collect reports from employees regarding the existence of behaviour that could be indicative of corruption or influence peddling. Although the managers of these companies are not, in this respect, subject to the obligation to report such facts to the judicial authority, it may nevertheless be in their interest to do so in order to seek in return some form of leniency with regard to the methods of prosecution likely to be envisaged by the PNF. The possibility of seeking the conclusion of a CJIP is in fact in the interest of the companies at the origin of a voluntary disclosure, as it will allow them to be protected from the risk of exclusion from public procurement procedures to which they are exposed in the event of a conviction by a court15. From this point of view, the PNF could usefully develop exchanges with organizations representing French companies internationally (MEDEF, AFEP) in order to define and implement a framework and practical incentives for spontaneous disclosure.

2.2 The role of the PNF in research, analysis and use of information

In addition to the complaints and reports mentioned above, the PNF should regularly use all the sources of information at its disposal concerning companies operating internationally. Thus, incoming requests for mutual assistance in criminal matters involving French companies or companies carrying out an economic activity on the national territory will be systematically used with a view of the possible opening by the PNF of a mirror investigation for facts of corruption.

Particular attention should be paid to national and foreign press articles that are likely, when credible and detailed facts are reported in them, to justify in-depth verifications with a view to the possible opening of a criminal investigation .16

Finally, the PNF, as a member of the French delegation to the OECD Working Group on Bribery in International Business Transactions, will have to exploit the information exchanged between representatives of the 44 participating countries.

It is important that in exploiting these different sources of information, the PNF’s attention primarily focuses on the economic sectors identified by the OECD and the European Union as most particularly exposed to the risk of corruption, namely construction, extractive industries, transport, telecommunications, pharmaceuticals, energy and military equipment.

Beyond the objectification of credible factual elements, the PNF should systematically verify whether an economic operator implicated in an international corrupt scheme is likely to fall within its jurisdiction under Articles 435-6-2 and 435-11-2 of the Penal Code, according to which French criminal law is applicable to acts of corruption or influence peddling committed abroad by persons “habitually residing or exercising all or part of [their] economic activity on French territory“. Since the legislator intended to adopt a broad definition of the exercise of an economic activity, it should be considered that persons “exercising all or part of [their] economic activity in France” within the meaning of these texts include foreign legal persons having a subsidiary, branches, commercial offices or other establishments in France, even if they do not have their own legal personality.

3.The recourse to an investigation strategy designed to reveal, in a timely and detailed manner, the corruption schemes and to identify all related parties

The emergence in recent years of new and increasingly sophisticated structures encouraging corruption (trusts, nominees, shell companies, foundations, etc.), the proliferation of tax havens, the multiplication of financial flows, the geographical dissociation of companies and their bank accounts, the use of “comptes rebonds” and the availability of increasingly powerful communication tools are the main challenges for investigators. Conducting investigations in this area therefore requires the PNF to devise and monitor a strategy based on a rigorous methodology designed to rapidly gather all the evidence needed to characterise corruption.

3.1. The definition and monitoring of objectives

The objectives to be achieved should aim at identifying the financial circuit of remuneration and all the natural persons involved in the corrupt scheme and their respective degree of involvement.

Even if in this type of case, it may seem simpler to focus the investigations on the side of the economic operator established in France rather than on the passive side of the corruption insofar as the public decision-maker is a foreigner, one should not, however, neglect patrimonial investigations that make it possible to determine whether the latter holds in France, directly or indirectly, property or assets, the origin of which may be linked to the corruption scheme in question, and whose seizure could then be envisaged.

3 .2. The applicable criminal qualifications

The main applicable offence is that of bribery of foreign public officials, both active and passive, as provided for and punished by Articles 435-1 and 435-3 of the Criminal Code. It should be stressed that, in order to be constituted, this offence does not require proof of the existence of a “bribery pact”. It is sufficient to prove that the active briber offered a sum of money or that the passive briber solicited the payment of a sum of money in exchange for the performance of an act. It does not matter whether or not this proposal or solicitation was accepted17. Thus, the attempt to bribe is not specifically criminalised, since the facts that could correspond to this meaning already constitute the bribery offence itself.

Certain facts may also be qualified as influence peddling of a foreign public official, according to the distinctions provided for in Articles 435-2 and 435-4 of the same Code. Broadly speaking, the main difference between the qualification of bribery and influence peddling lies in the fact that influence peddling, unlike bribery that targets a corrupted-corrupter relationship, applies to a triangular relationship in which a person with real or supposed influence over certain persons exchanges this influence for an advantage provided by a third party who wishes to benefit from this influence.

Given the secretive nature and ingenuity of the perpetrators of this type of offence (false invoices, multiple intermediaries, etc.), it may however be difficult to establish the constituent elements of these two offences. It will therefore be advisable not to hesitate to investigate certain peripheral offences for which proof may be easier to establish. In this respect, money laundering may constitute a useful additional offence to investigate, since corruption money generally transits through money laundering channels, especially since the proof of this offence is facilitated by the existence in Article 324-1-1 of the Criminal Code of a presumption of illegality when it appears that the material, legal or financial conditions of an investment, concealment or conversion operation can have no other justification than to conceal the origin or the beneficial owner of such assets or income.

The offence of concealment may also be retained against those who hold property or benefit from it knowing that it comes from the commission of acts of corruption or influence peddling by foreign public officials. It should be recalled in this respect that concealment of stolen assets is broadly considered by the courts, which accept that the detention may not be personal (the concealed bribe may thus be in the possession of an agent, for example in a bank account).

Similarly, the use of the qualification of misappropriation of company assets may prove relevant against directors of SAs and SARLs18. The very broad nature given by the courts to the notion of conflict with the corporate interest makes it easy to demonstrate misappropriation of corporate assets. The French Supreme Court has consistently held that “the use of a company’s assets is necessarily abusive when it is done for an unlawful purpose 19. This case law also states that if it is not justified that the assets have been used in the sole interest of the company, corporate funds taken in a concealed manner have necessarily been used in the personal interest of the director20. In terms of repression, it should also be recalled that the penalties incurred are aggravated when a misappropriation of company assets has been carried out or facilitated by means of accounts opened or contracts signed abroad or through the interposition of natural or legal persons established abroad. In companies where this offence is not applicable (general partnerships, limited partnerships, etc.), the offence of criminal breach of trust may be used.

The offence of publication or presentation of annual accounts that do not give a true and fair view[noteArticles L.241-3 3°, L.242-6 2°, L.242-30 du code de commerce.[/note]may be used against the managers of SARLs and SAs. Indeed, this offence has been committed by directors who wanted to conceal hidden remuneration21. In companies for which this offence is not applicable (general partnerships, limited partnerships, etc.), the liability of managers for false accounts may be sought in the field of fraud or forgery.

Finally, since 2000 Article 39-2 bis of the General Tax Code has excluded bribes paid to a public official or third party by a company in the context of an international commercial transaction 22 from the deduction of profits subject to tax. The fact that a company deducts an occult payment is likely to characterise the offence of tax fraud provided for and punished by Article 1741 of the same code.

3.3 The choice of investigation body

OCLCIFF‘s experience with international bribery makes it particularly well suited to conduct the most complex investigations decided upon by the PNF. This office has teams of investigators trained in financial crime, corporate law, public procurement and corporate accounting.

However, the growing volume of this types of cases, as well as the singularity of the geopolitical context or sector of economic activity in certain cases, may require referral to other departments, such as the research section of the Paris Gendarmerie, which has national jurisdiction, or even more exceptionally, for cases with a more limited geography and facts of lesser importance, the regional services of the judicial police, the specialized brigades of the Paris directorate of judicial police (DRPJ), in particular the brigade for the suppression of economic crime (BRDE).

3.4 The possible investigative actions and techniques

In addition to the standard acts of investigation (findings, research on open and closed databases, documentary exploitation, witness hearings, police custody, searches, accounting and tax investigations, etc.), it should be recalled that under the terms of Article 706-1-1 of the Code of Criminal Procedure, the special investigation techniques provided for in Articles 706-80 to 706-87 and 706-95 to 706-102-5 (e.g. installation of listening devices and infiltration) may be used during the preliminary investigation of bribery and influence peddling of foreign public officials.

If the detention in police custody or the issue of a warrant for a foreign public official is envisaged, it will be necessary to check with the Ministry of Europe and Foreign Affairs23 whether the defendant has immunity from jurisdiction under conventional or customary public international law24 and, if so, whether it is enforceable.

 

3.5 3.5 The use of seizure and guarantee measures

As international corruption is an economic offence whose primary motive is profit, and whose appropriateness is assessed by its perpetrators on the basis of a “cost-benefit” balance sheet, it is important that asset-based investigations be systematically carried out in order to identify the proceeds of the offence and, more broadly, the assets of the suspects, whether they are located in France or abroad. With a view to their subsequent confiscation, occult payments received by the corrupted party and back payments received by the corrupter, should then be seized as such or by equivalent, if necessary. Economic and commercial advantages improperly obtained by the briber in execution of the act of corruption may also be seized by equivalent measures. Finally, a guarantee may be usefully required in the event of the opening of a judicial inquiry to guarantee payment of the fine.

3.6 The implementation of international mutual assistance

In the context of bribe payments involving the use of intermediaries hidden by the interposition of front companies located in tax havens, service companies or subcontractors located in the country of the corrupt public officials, the implementation of international mutual legal assistance appears particularly crucial. In addition to the difficulty linked to the opacity of these arrangements, international corrupt schemes take advantage of the existing differences between countries’ legal systems, the lack of consistency in public action and the fact that this type of crime is still generally dealt with by national judicial authorities in isolation from one other. Therefore, effectiveness in the fight against international corruption necessitates an inclusive approach that requires the PNF to establish ever closer links with the various foreign government agencies involved in the fight against international corruption.

4. The determination of an appropriate mode of prosecution for effective, proportionate and deterrent sanctions

4.1 With regard to natural persons

According to a study based on 427 international bribery cases involving legal and natural persons from countries that are signatories to the OECD Anti-Bribery Convention25, in almost one out of every two international bribery cases, kickbacks are paid or authorised by senior company management. Furthermore, according to the same study, intermediaries are involved in three out of four international bribery cases (usually local commercial agents, distributors or brokers).

It is therefore important that the action is taken not only against the employees directly involved in the corrupt scheme, but also against the managers and all natural persons outside the company who intervened, in one capacity or another, in the process of committing the offence. In this respect, it should be recalled that case law considers as accomplices to active bribery intermediaries26 or legal counsel who knowingly provided information enabling a financial arrangement to be made through a foreign company in order to conceal the offence27.

Again, if proceedings are envisaged against a foreign public official, it will be necessary to check with the Ministry of Europe and Foreign Affairs whether the defendant has immunity from conventional or customary jurisdiction.

The choice of the most appropriate criminal response, such as whether to resort to the procedure of appearance on prior recognition of guilt (CRPC) or referral to the criminal court, should take account of the background of the defendant, as well as his degree of involvement, acknowledgement of the facts and cooperation with the judicial authority.

In the event of referral to the court, penalties required should be appropriate to the seriousness of the facts, the personality and degree of involvement of the accused. It should be recalled in this respect that, in addition to a prison sentence of up to 10 years, natural persons are liable to a fine of EUR 1 million for active and passive bribery of foreign public officials, which may be increased to twice the proceeds of the offence. The penalties for influence peddling of a foreign public official are five-year imprisonment and a fine of 500,000 euros, which may also be increased to twice the proceeds of the offence28. When the natural persons involved have made it possible, through their cooperation with the administrative or judicial authority, to put an end to the offence or to identify the other perpetrators or accomplices, they should be allowed to benefit from the provisions of Article 435-6-1 of the Criminal Code, which provides that the prison sentence incurred is then reduced by half.

Finally, whenever it seems appropriate, additional penalties may be required, in particular the prohibition of civil rights, the prohibition to exercise the professional activity during which the acts were committed, the public dissemination of the decision pronounced or the confiscation of seized assets.

4.2 With regard to legal persons

In accordance with France’s international commitments, the effective criminal prosecution of legal persons must allow to put an end to the existence of commercial strategies based on the habitual use of these illicit practices.

It is therefore necessary to ensure that investigations establish elements that could justify the prosecution of legal persons for bribery or influence peddling of foreign public officials, whether as perpetrator/co-perpetrator or accomplice, in particular for acts committed abroad by their subsidiaries, intermediaries or suppliers.

A study of case law shows that the Supreme Court adopts a flexible interpretation of the conditions under which the criminal liability of a legal person may be incurred. It may be incurred through the actions of a delegator authority, such as a manager of a foreign subsidiary, or in the absence of identification of the natural person who committed the acts of corruption, when it appears with certainty that the offence was committed by an organ or representative, whoever it may be29.

Once the conditions for holding the legal person(s) involved in the corrupt scheme liable have been met, the most appropriate form of criminal response will have to be determined on a case-by-case basis.

The appropriateness of resorting to the conclusion of a CJIP will depend on the following factors:

  • the absence of a prior record of the legal person;
  • the voluntary disclosure of the facts;
  • the degree of cooperation with the judicial authority demonstrated by the managers of the legal person (in particular to enable the identification of the natural persons most involved in the corrupt scheme in question) .30.

In case a CJIP is concluded, particular attention will have to be paid to the specificities of the compliance programme imposed and to the determination of the amount of the settlement fine that will be proposed, in accordance with the guidelines specified in the Circular of 31 January 2018 presenting the Law of 9 December 2016 on transparency, the fight against corruption and the modernisation of economic life. When the conditions for the conclusion of a CJIP do not appear to be met, a CRPC may be considered. Referral to the criminal court may be reserved for the most serious and/or systemic facts and/or involving non-cooperative legal entities and/or not acknowledging the facts.

In the event of prosecution, in addition to a fine, it may be useful to require the public dissemination of the decision, compliance program, closure of one or more of the company’s establishments, confiscation of seized assets and/or exclusion from participation in public procurement contracts.

You will ensure that you systematically report to the Criminal Matters and Pardons Directorate, under the stamp of the Office of Economic, Financial and Social Law, Environment and Public Health, any corruption proceedings or influence peddling of foreign public officials reported by your prosecutors’ offices and, in general, any difficulties encountered in the implementation of this Circular.

 

Global Investigations Review (GIR) 40 Under 40 Clémentine Duverne

Age: 35
Firm: Navacelle
Job role: Partner
Location: Paris

A significant case I’ve worked on:

One thing I have learnt and truly believe is that there is no such thing as a small case. But I like it all the more when it gets technical and includes a cross-border twist. Of course, in the end, what makes the difference is the client’s gratitude! This is what will make it your favourite case.

“Clémentine and I had discussed our parallel studies and careers for close to 20 years. One day, I asked her to list all she wanted in her perfect position; over a year later we had another one of our talks and she brought up the list. I told her that the firm checked all the boxes and that she should join – and that is just what she did. Voilà! “

Stéphane de Navacelle
Managing partner at Navacelle

An important person in my career:

The old-fashioned white-collar lawyer is who I looked up to. The love of language is part of what brought me to law. I was well served with Michel Beaussier (former White & Case) who had started his boutique 35 years ago before joining the firm and Jean-Pierre Picca (White & Case), who had 30 years of high-level expertise as senior prosecutor and senior liaison legal adviser to the US DOJ. Together they taught me to always be a step ahead and never leave a corner unexplored.

“I have witnessed Clémentine deal with numerous challenging situations. She is client-driven and focuses on details when it counts while never losing the bigger picture. Her candid approach to complex situations repeatedly brings new perspectives to strategic discussions. It made absolute sense to me that she moved on into a partner position at her current firm.”

Bruno Fontaine
CACIB general counsel

www.globalinvestigationsreview.com

Report on the interests at play in relation to the status and the role of the “investigating” lawyers in internal investigations

Report on the interests at play in relation to the status and the role of the “investigating” lawyers in internal investigations

Date of presentation to the council: December 10 2019

Rapporteurs: Stéphane de Navacelle, Basile Ader, Vice Bâtonnier
Contributors: Thomas Baudesson, Jean-Yves Garaud

Text of the Report

The common law practice gave impetus to the introduction of internal investigations in France, which are now flourishing in the legal landscape and establishing a new way for lawyers to provide assistance and advice.

The rules of professional conduct for lawyers are solid guarantees for companies in which investigations are carried out, as well as for their employees. This new practice leads to certain questions however, that are not addressed by the existing regulatory and legislative rules.

In 2016, the Paris Bar Council set out the first guidelines, annexing them to the Paris Bar’s Internal Rules and implemented the preliminary steps of a warranted regulation.

In the light of the ethical issues brought to the Council by practicing lawyers, it appears relevant today to add to the rules of professional conduct as applicable to internal investigations.

I. Current context

1. Increase of internal investigations in France

1. Having first emerged in the banking, competition law and labour law sectors1, internal investigations expanded several years ago to the field of anti-corruption, triggered by the American regulators2 and the entry into force of the Sapin II law at the end of 20163.

2. These initiatives marked a significant step forward in the field, in particular by requiring companies to set up whistleblowing reporting systems4, by establishing the French Anti-Corruption Agency (Agence Française Anticorruption, “AFA5) but also by adopting a new negotiation mechanism, the judicial public interest agreement (Convention Judiciaire d’Intérêt Public, “CJIP6),introducing a system of cooperation among authorities, lawyers and prosecuted persons, hitherto unknown in France.

3. These initiatives have highlighted the mechanism of internal investigations, which enable companies to establish the veracity, the extent and the qualification of the reported facts and potentially to prove to the authorities their full involvement in the investigation and the resolution of misconduct7.

4. The lawyer within the framework of an internal investigation may be called upon by a legal entity or by an individual:

– The legal entity has recourse to an “investigating” lawyer to carry out an internal investigation, either as a preventive measure, in response to an alert or when an investigation into the potential illicit practices within the legal entity conducted by an administrative or judicial authority is already underway.

– The individual has recourse to a lawyer when he/she is involved in the internal investigation, often at the time when he/she is interviewed by the lawyers conducting the internal investigation.

5. In either case, the lawyer of the legal entity becomes an “investigator”, an information and “evidence collector8. The lawyer’s role will be to assess the veracity of the reported facts, to identify the persons involved, to evaluate the legal risks related to the elements of which the lawyer will have become aware and to advise the client on the follow-up to be given to the internal investigation.

2. Previous Bar work on the lawyer in internal investigations

6. The discussions led, in February 2016, to a report by Jean-Pierre Grandjean9, which led in turn to the adoption on September 13, 2016, of the Vademecum of the lawyer conducting an internal investigation, by the Bar Council. This Vademecum was annexed to the Internal Rules of the Paris Bar (Règlement Intérieur du Barreau de Paris, “RIBP10).

7. More recently, and in order to respond to certain challenges encountered in practice, the Ethics Committee of the Paris Bar issued an opinion on December 4, 201811.

8. The questions raised were mainly linked to the choice of lawyer, the latter’s duties towards the employees during the investigation, the processing of elements collected during the investigation in the event of success or failure of the CJIP, the need to obtain a particular title to exercise the role of “investigating” lawyer, the duty of the lawyer in the event of a disagreement between the client and the prosecuting authority and the professional secrecy in the event of an agreement.

3. Fellow practitioners regularly raise new questions on internal investigations

9. Should the lawyer be mandated by a company as a preventive measure or should the lawyer be mandated because the prosecuting authority is already in charge of an investigation, the course of the investigation is supposedly identical.

10. Once the scope of the lawyer’s mission has been determined, the lawyer will have to draw up an investigation plan, before starting the actual investigation and concluding it with the drafting of a report. In the absence of clear rules on the practice of internal investigations, the practice of internal investigations shakes up the applicable rules, from the stage of lawyer designation to the stage of execution and consequences of the issued report.

II. Food for thought on new recommendations on the ethical framework of internal investigation

11. The following recommendations intend to establish a precise framework that complies with existing regulatory and legal standards identical for all practitioners.

1. Scope of professional secrecy in internal investigations

12. In the recent years, the absolute and public order nature of professional secrecy which applies to lawyer-client communications has frequently been undermined by judicial authorities12. This makes it all the more important to specifying the application of professional secrecy in the context of internal investigations.

13. The guidelines on the implementation of the judicial public interest agreement issued by the National Financial Prosecutor (Parquet National Financier, “PNF”) and the AFA states that not all the documents contained in the internal investigation report were necessarily covered by the professional secrecy of the lawyer. The guidelines provide that: “[in] the event that the company refuses to transmit certain documents, it is for the public prosecutor’s office to determine whether such refusal appears justified under the rules applicable to such secrecy. In the event of a disagreement, the public prosecutor’s office shall assess whether the failure to hand over the documents concerned adversely affects the level of cooperation of the company. This assessment considers, where appropriate, the legal consequences that waiving professional secrecy could have under foreign laws13.

14. The Council’s initial recommendations take into account the mission carried out by the lawyer in the context of the internal investigation (assistance/advice or expertise) in order to decide on the application of professional secrecy14. The internal investigation insofar as it can serve and feed communications to the prosecuting authorities however, must be considered as part of an assistance and advice mission and must therefore be covered by professional secrecy.

15. Therefore, and namely considering the PNF’s opinion on the matter, it is important that the Paris Bar be very clear on the application of professional secrecy to all communications between the “investigating” lawyer and the client.

16. Be they minutes of interviews, analyses or reports, these documents are all drawn up by the lawyer for the client and are thereby covered by professional secrecy. Only the client is free to decide whether or not it is in his/her interest to hand them over to a third party – in this case to a prosecuting authority. This thereby limits the client’s obligation to communicate to company documents which may have been identified as relevant by the lawyer in the context of the internal investigation.

17. In addition to the application of professional secrecy to communications in the context of the internal investigation, the question regarding the use of external experts (e.g. auditors or forensic experts) to assist the investigation also arose.

18. In the United States, these experts are retained under privilege by the lawyer conducting the internal investigation. The engagement is generally a tripartite agreement between the lawyer, the company and the third party expert, which recognizes that all work is conducted under the direction of the law firm and would therefore be subject to the same professional secrecy and same privileges as an attorney’s work product.

19. Similarly, any non-lawyer (assistants, experts, etc.) that a lawyer has recourse to and commissions in the course of his/her professional practice is bound by the same professional secrecy. The work produced by the non-lawyer in the context of an internal investigation is thereby within the scope of professional secrecy.

2. “Investigating” lawyer – authorities interaction

20. Cooperation with the authorities is consubstantial with the mission, if the aim is to obtain a negotiated settlement (DPA, CJIP). This raises the question of the role of the lawyer in these communications with the authorities.

21. The guidelines issued by the PNF and the AFA specify that the spontaneous disclosure of facts to the public prosecutor’s office by the company and the communication of the conclusions of the internal investigation carried out in the company are two factors for the implementation of the CJIP15.

22. They consequently recommend that, where parallel judicial and internal investigations are conducted, “regular exchanges between the public prosecutor’s office and the legal person’s counsel should ensure proper coordination16.

23. The Bar must reaffirm the necessary independence of lawyers vis-à-vis the authorities and the application of professional secrecy to the work carried out by lawyers in relation to internal investigations. Only in these circumstances will the “investigating” lawyer be able to communicate and negotiate with the authorities in the best interests of the client – who remains free to make decisions – and be in position to provide strategic advice to the client.

24. It is important to stress that “the lawyer should at no time knowingly give the judge false or misleading information17. This rule is, of course, intended to apply in the context of the lawyer’s dealings with the public prosecutor’s office and/or investigating magistrates. The “trust in the courthouse” (foi du palais), which binds all officers of justice, is the facilitator of necessary communications for the elaboration of a CJIP or an arraignment on preliminary admission of guilt (Comparution sur Reconnaissance Préalable de Culpabilité, “CRPC”). When necessary, the lawyer must remind the client that his mission should in no way distort reality.

III. Conclusion

25. This new development of internal investigations offers new and significant professional perspectives to lawyers. The practice and legal developments in relation to the obligations of legal entities will certainly lead to new interests for and challenges that lawyers will have to overcome.

IV. Draft resolution

26. Resolution :

The Bar Council reaffirms the essential task to be undertaken by lawyers in internal investigations. It stresses the fundamental importance of professional secrecy – in the context of the lawyer’s assistance, representation and advisory mission –, of the trust in the courthouse, namely in relation to communications with the judges and to the guarantees provided by the essential principles governing the practice of the profession.

It amends the Vademecum on the Investigating Lawyer18 as follows.

V. Annexe XXIV

Vademecum of the lawyer conducting an internal investigation

In a deliberation dated March 8, 2016, the Paris Bar Council considered that internal investigations fall within the lawyer’s professional scope (excluding the investigation and research activity referred to in Article L621.1 of the National Security Code), be they within the scope of Article 6.2 paragraph 5 of the RIN (expertise activity), or within the scope of Articles 6.1 and 6.2 paragraph 2 of the RIN (assistance and advisory activities).

In a deliberation dated December 10, 2019, the Paris Bar Council amended the Vademecum as follows.
In accordance with this resolution, recommendations have been adopted in view of this activity and are to be annexed to the RIBP19.

1. The lawyer leading an internal investigation shall in all circumstances abide by our
essential principles (Article 1.3 RIN). The lawyer will ensure the abidance by the principles of conscience, independence, humanity, loyalty, delicacy, moderation, competency and prudence. The lawyer will refrain from exerting any pressure on the people he/she will speak with.

2. The lawyer will enter into an agreement with the client which, in addition to the terms of remuneration, will define the purpose of the lawyer’s mission.

3. As in all matters, the lawyer in charge of an internal investigation is bound by professional secrecy solely with respect to his/her client – no other person may request to benefit from it. In accordance with the rules of professional secrecy, when a report or any other document is drawn up by the lawyer during his/her mission, it is handed over to the client exclusively, who remains free to pass it on to a third party.

4. Prior to any contact with third parties in order to carry out the internal investigation, the lawyer will explain his/her mission and it’s non-coercive nature; the lawyer will specify to them that their communications are not covered by professional secrecy to thand that their statements may be included in the lawyer’s report.

5. The lawyer conducting an internal investigation shall refrain from accepting an investigation that would lead to an assessment of work previously carried out by him/her.

6. In all circumstances, the lawyer shall indicate to the persons he/she interviews during the investigation that he/she is not their lawyer but acts on behalf of the client who has commissioned him/her to complete this investigation.

7. The lawyer will explain to the persons interviewed and others contacted for the needs of the internal investigation that the professional secrecy by which he or she is bound with respect to his/her client is not binding with respect to them, and that the statements and other information collected during the investigation may thereby be used by the client, as well as the report that will potentially be communicated to the client.

8. The lawyer will inform the persons being interviewed that they may be assisted or advised by a lawyer should it appear, before or during her hearing, that they may be accused of misconduct following the internal investigation.

9. The lawyer may assist his/her client in amicable or contentious proceedings, relating to or arising from the internal investigation, but should refrain from doing so, namely on account of the principle of delicacy, to represent the client in proceedings brought by the client against a person the lawyer has interviewed during the internal investigation.

10. The lawyer conducting an internal investigation shall ensure that he/she is independent in the governance of the investigation and possible communications with an authority. If the internal investigation is called into question, the lawyer may recommend to his/her client to be represented by another lawyer for the separate stages of the internal investigation.

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Highlights on the impact of Covid-19

Highlights: The impact of Covid-19 on administrative law, human rights and labor, contract and criminal laws

I. The impact of Covid-19 on administrative law
II. The impact of Covid-19 on human rights
III. The impact of Covid-19 on labor law
IV. The impact of Covid-19 on contract law
V. The impact of Covid-19 on criminal law

I. The impact of Covid-19 on administrative law

On March 23, 2020, the bill proclaiming a state of public health emergency was passed in the French National Assembly. It sets out additional governmental powers, the enforcement of regulatory measures and the limitation of civil liberties in order to counter Covid-19 on French soil.

Article L.3131-1 of the French Public Health Code has always provided that the Minister of Health is to take any measure that is appropriate and proportionate to the risks involved to prevent and limit health risks for the population. Those powers can also be delegated to local government officials to address health emergency situations.

The Minister of Health has extensive powers to take both tangible and intangible measures (e.g. distribution of health products, campaigns to inform on health issues and prevent risks) or regulatory and individual restrictive measures. These range from the isolation of sick individuals to the limitation of civil liberties (e.g. prohibition of public gatherings, lockdown restrictions).

The Minister of Health alone is competent to appreciate the degree of emergency and designate the necessary responsive measures. In this, the state of public health emergency is very different to the state of emergency – the latter having to be declared by the Council of Ministers and extended by the Parliament.

The measures taken by the Minister of Health are periodically reviewed by the High Council for public health however, and measures no longer deemed necessary are to be removed immediately.

Administrative tribunals also verify whether measures taken are strictly necessary, proportionate and adapted to the situation. Local government officials can only take measures that are equal to or more stringent than higher regulations.

The law on the state of public health emergency has established a new chapter in the Public Health Code. It sets out broad powers attributed to the Prime Minister and the Minister of Health, which must also be strictly appropriate and proportionate in light of circumstances at the time of the decision and to be lifted when no longer necessary.

Those measures include but are not limited to restricting the circulation of individuals and vehicles and civil liberties, prohibiting public gatherings and individuals from leaving their home except when strictly necessary, enforcing quarantine measures, closing venues, controlling prices of goods and requisitioning all goods and services that can assist in remedying the emergency.

Accordingly and pursuant to the law and other provisions of the Public Health Code, decrees were taken by local government officials to restrict public gatherings, temporarily close schools and enforce hygiene and social distancing measures.

With great power, there must also come great responsibility: the Prime Minister, the former Minister of Health and the current Minister of Health are all subject to several criminal complaints due to their alleged mismanagement of the Covid-19 crisis. Plaintiffs argue that they voluntarily abstained from taking the necessary measures that were at their disposal and that could have prevented or mitigated the crisis.

Administrative tribunals are also free to sanction the government should it be proven that it failed to take the necessary measures that could have been taken considering its awareness of the potential risks at stake.

In this case, the statement made by former Minister of Health Agnès Buzyn regarding the government’s inability to prevent the upcoming crisis could be used by a judge to determine that the government failed to take appropriate measures.

II. The impact of Covid-19 on human rights

Following the declaration of the state of public health emergency on account of Covid-19, the French government was provided with additional powers to minimize the consequences of the crisis. Some of these measures impact civil rights however, ranging from habeas corpus to the right to life, to dignity, to privacy and to freedom of expression.

A union of medical practitioners referred to the right to life when requesting the administrative Court to order more stringent lockdown measures, e.g. prohibition of all public transport and non-essential activities, such as groceries. The Court refused most of these requests because it considered that France did not have the means to alleviate the prohibition of all activities. The government was not found guilty for having failed to test the entire population for the virus because it considered that the tests were scarce at the start of the pandemic. The request for clarification of the lockdown exceptions was granted however – French citizens are expressly permitted to leave their homes under condition that they do so for a designated purpose (e.g. groceries, specific jobs, medical visits, exercise within close range).

The question of whether the right to dignity is in jeopardy has been brought to the fore since the lack of respiratory engines and dedicated hospital beds has led to governmental guidance based on patient health and age has been issued and dedicated advisors have been designated for doctors to decide which patients to treat as priorities. Furthermore, while French law usually allows for patients to make an informed choice as to treatment, a governmental decree provides that the experimental chloroquine drug is now to be reserved for hospital patients. A union of medical practitioners has requested that this decree be repealed and that this drug – which should be taken preventatively – be administered to a wider group of patients. This request has been rejected by the administrative court until further European tests on the effects of the treatment have been conducted.

With respect to the right to privacy, telecom companies have declared that they will share anonymized data with the European Commission to enable the tracking of the contagion. This has already occurred in France, where telephone data helped determine that 17% of the inhabitants of Paris region left before the lockdown. A Committee has been established to implement a backtracking set-up, using anonymized location and health data.

Finally, freedom of expression has been limited by the duty imposed on medical practitioners working for public hospitals in France to be discrete about what they are witnessing and their working conditions. Freedom of expression is further limited by government communications. A complaint has been issued by medical practitioners against the government for endangering the population by their declarations. It is argued that the government led to contaminations by stating that masks were inefficient and dangerous to cover up the lack of masks. Moreover, while social media platforms have vowed to limit fake news about the coronavirus, the Facebook algorithm that is allowed to free-roam has been accused of censorship. Differing from other countries such as Thailand for instance, France has not as of yet implemented legal sanctions against issuers of fake news.

III. The impact of Covid-19 on labor law

The French Labor Code has undergone temporary liberalization in the context of Covid-19 and the state of public health emergency, in order to support companies and employees through the crisis and its consequences.

An employer may require an employee to take leave during the lockdown, but only after a company or branch agreement. The dates of days of reduced working time may be imposed or modified unilaterally by the employer however, without having recourse to a collective agreement.

With respect to the waiting period, for the entire duration of the health emergency, employees in both the private and public sectors will be fully compensated from the first day of their leave, regardless of their compulsory regime.

Certain categories of employers may be exempt from the rules of ordinary law governing working time. Indeed, for sectors considered particularly necessary for the security of the nation or for the continuity of economic and social life (e.g. transport, telecommunications, logistics and agriculture sectors), it will be possible to employ labor for a maximum of sixty hours. Companies operating in these same strategic sectors will also be able to mobilize their teams on Sundays to provide seven days a week service, during peak hours.

Article L.4131-1 of the French Labor Code provides that workers must immediately alert their employers to any work situation which they have reasonable grounds for believing presents a serious and imminent danger to life or health and of any defect in the implemented health and safety measures. The Labor Ministry specified a situation in which an employer does not implement the government’s recommendations relating to Covid-19 amounts to a reasonable cause to believe that a worker is in serious and imminent danger.

The rights to unemployment benefits are extended for all jobseekers who have exhausted them during the month of March.

Recourse to temporary lay-offs have been facilitated as of March 26, 2020 and to the placement of employees on partial unemployment since March 1, 2020.

IV. The impact of Covid-19 on contract law

The Minister of Economy and Finance, Bruno Le Maire, announced on February 28, 2020 that the coronavirus epidemic was to be considered as “a case of force majeure for the companies”. This declaration is limited to “government procurement contracts” however and does not qualify the coronavirus epidemic as an event of force majeure justifying the non-performance of all contractual obligations under private law.

This poses the question of under which circumstances it is possible to argue a case of force majeure to justify the impossibility to honor a contract and avoid the penalties related to non-performance.

Article 1218 of the French Civil Code defines force majeure as “an event beyond the control of the debtor, which could not reasonably have been foreseen at the time of the conclusion of the contract and of which the effect cannot be avoided by appropriate measures, prevents the performance of an obligation by the debtor.” The event must therefore be external, unforeseeable and irresistible to the other party. French case law shows that the courts do not always regard epidemics as constituting a case of force majeure, due to the lack of sufficient seriousness or availability of treatment.

By transposing the existing case law to Covid-19, it is reasonable to think that once the government or the World Health Organization has declared the existence of an epidemic, or a fortiori a state of public health emergency, it becomes an event of sufficient gravity likely to be qualified as force majeure.

The consequences of the Covid-19 crisis, namely the decisions taken by public authorities to limit the free movement of persons, are likely to be considered as a force majeure event as they constitute an insurmountable obstacle to the performance of contractual obligations. Thus, the confinement of a debtor of a contractual obligation (e.g. with respect to delivery of goods and services) could in principle justify recourse to force majeure if the effects of the event at the origin of the damage could not be mitigated by appropriate measures.

The Colmar Court of Appeal, having retained the qualification of force majeure for Covid-19, recently held that the epidemic could justify the absence of the asylum-seeker at the hearing.

Judges are reluctant however to admit force majeure to justify non-performance of a monetary obligation, on the ground that money is fungible and not irreplaceable. The Court of Cassation has ruled, inter alia, that “the debtor of a contractual obligation to pay a sum of money that has not been performed cannot be exonerated from this obligation by invoking a case of force majeure”. Where performance of a monetary obligation is thereby not impossible but only made more difficult by an event, force majeure cannot be accepted.

Nonetheless, the loss of turnover due to an epidemic is rarely covered by insurance contracts. In most insurance contracts, business interruption is covered only if it is the result of material damage, resulting from certain events listed in the insurance policy (e.g. fire, water damage, storm). An epidemic does not appear to create material damage. Businesses are thus likely to find themselves without compensation for interruption resulting from Covid-19. Even for those companies that have subscribed to a “no-damage” business interruption insurance, the coverage must include epidemic-related losses and Covid-19 must not be excluded by a specific clause.

A case of force majeure shall in principle lead to suspension of the contract and cannot exonerate the debtor from liability for a contractual obligation. The law states that if the impediment to performance is temporary, performance of the obligation is simply suspended. If however, the impediment is permanent or if the delay in performance renders performance of the contract unnecessary, the contract is terminated.

In application of a general principle of freedom of contract, a force majeure clause may specify its own definition and effects. In this case, the parties may stipulate that even in the event of force majeure, the contractual stipulations shall continue to apply. Debtors may thus agree to waive their right to force majeure and remain responsible for the performance of the contract despite an arising case of force majeure.

The parties may also renegotiate the contract when a change in circumstances unforeseeable at the time of conclusion of the contract makes performance excessively onerous for a party who had not agreed to assume the risk, a mechanism provided for in Article 1195 of the French Civil Code. If renegotiation fails, the parties may decide to terminate the contract or submit it to the judge, who will proceed to its revision. Until the judge has ruled, the parties are obliged to apply the contract in all its provisions. Here again, this mechanism may also be subject to contractual adjustment.

IV. The impact of Covid-19 on criminal law

The state of public health emergency was accompanied by sanctions, in order to enforce the emergency measures, early release to avoid contamination clusters in prisons and measures to adapt criminal proceedings to the courts’ reduced activity.

The lockdown was first set in motion by decree, issued by the Minister of Health on March 14, 2020. This was followed by the enactment of the bill on the state of public health emergency and the enforcement of measures taken by the Prime Minister. The amended provisions of the Public Health Code set out different sentences applicable to violations of the public health emergency measures.

Government authorities have the power to requisition all goods and services that are deemed to be necessary in order to fight the epidemic. A six-month sentence has been introduced for violations of the requisitions and a 10,0000 euro fine.

Individuals who violate other measures set forth in application of articles L. 3131-1 and L. 3131-15 through L. 3131-17 of the Public Health Code, are liable of a fine of up to 750 euro, which can be reduced to 350 euro. In case of a second violation occurring within a 15-day period, the fine is increased to 1,500 euro. In case of a third violation occurring within a 30-day period, individuals face up to 6-month jail sentence and a 3,750 euro fine. On account of the jail term, authorities are thereby allowed to place suspects in custody. The jail term also opens the door to fast-track criminal proceedings.

One of the government’s priorities was to avoid clusters in prisons. In two weeks, nearly 5% of the prison population benefited from early release measures. The number of prisoners dropped by nearly 4,000, which facilitated cell confinement measures for sick prisoners.

Prisoners sentenced to a term of up to five years’ imprisonment, with a remaining period of detention of up to two months, can now benefit from early release in the form of house arrest – with the exclusion of those convicted of terrorist acts, offences committed against a spouse, collective offences likely to compromise the security of establishments or disrupt public order, or offences contrary to the rules of good citizenship in the context of health and security.

Article 13 of Order No. 2020-303, 25 March 2020, provides that a person in custody or heard may speak to a lawyer, or be assisted by him remotely.

Should a doctor diagnose a person in police custody with Covid-19 symptoms, making that person’s condition incompatible with the measure, police custody would have to be lifted as soon as possible. Failing this, continued police custody would necessarily be detrimental to the person’s interests.

The French Decree n° 2020-303 of 25 March 2020, also modifies the procedural rules governing hearings.

The statute of limitations is suspended from March 12, 2020 to one month after the end of the national health emergency, i.e. as of now, June 24, 2020. Should an act interrupting the statute of limitation occur during this period, the full extent of the statute of limitation will run anew once the suspension is over, as long as it constitutes a due delay violation under article 6 of the ECHR. Moreover, procedural time-limits are also doubled. The decree remains unclear however in that it is not supposed to apply to measures taken before its enactment, in application of the non-retroactivity in pejus principle, but provides for its application from March 12, 2020.

The decree provides that hearings can be led by only one judge should the president of the court choose to proceed in this manner. In France, collegiality of decision is not a fundamental principle and so derogations are possible as long as it does not lead to inequality before law.

The decree provides that hearings and rulings can be closed to the public should the president of the court decide it. In France, while the debate can be held in the form of a closed hearing, rulings are always to be given publicly pursuant to the Procedural Code at the risk of being voidable.

The use of videoconferencing is generalized before all criminal courts without the need to obtain the agreement of the parties, save for felony courts. Established by the Law of November 15, 2001 to be used in the context of anti-terrorist proceedings, videoconferencing was generalized by the Law of March 23, 2019, that required the prior consent of the person concerned. This law did not set any objective criteria to justify the recourse to videoconferencing, other than the needs of the investigation or the need resulting from the impossibility for an interpreter to travel. First authorized for hearing, questioning or confrontation, it was gradually extended to all phases of the criminal trial including investigations and judgment.

The new decree further extends the use of audiovisual means of telecommunication by depriving the person concerned of the possibility of objecting to the use of videoconferencing. The question arises as to whether the new provisions comply with the 2018 Constitutional Court ruling stating that the recourse to videoconferencing must be justified by the specific circumstances and offer procedural guarantees. It can be argued that the circumstances resulting from the state of health emergency and its limited duration could justify the use of videoconferencing without the agreement of the persons concerned, provided that the right to a fair trial and the existence of procedural guarantees are respected. It is necessary however to ensure that these measures do not remain post-pandemic.

Navacelle trainees Clément Allais, Amelle Djedi, Soukaina El-Mekkaoui, Christelle Meda and Ekaterina Oleinikova

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