In an ongoing exchange on this blog, Susan Hawley and Matthew Stephenson have debated the desirability and practicality of global standards for the settlement of foreign bribery cases (see here, here, here, and here). A key country at issue in this discussion is France, which has bucked the trend among its peer nations – including the U.S., the U.K., the Netherlands, Switzerland, and Germany – toward resolving foreign corruption cases through negotiated resolution. In fact, France has increasingly come under fire from organizations like the OECD, the EU, and Transparency International for its failure to hold corrupt companies accountable at all – over the past 16 years, the French government has not secured a single corporate conviction for overseas bribery. As Sarah convincingly argued on this blog, the reason is not that French companies are less corrupt or that French authorities are less capable, but rather that procedural barriers prevent productive investigation and resolution of cases. Primarily, the French civil law system lacks a settlement mechanism by which companies can negotiate lighter penalties in exchange for fines and cooperation. France is thus an important target for legal and policy reform affecting out-of-court settlement procedures.
Until very recently, the French government was poised to undertake such reform. Late last year, French Minister of Finance Michel Sapin developed legislation aimed at strengthening the fight against corruption. The draft version of Loi Sapin II, as it is known, contained provisions that put in place a new national anticorruption agency with investigative and oversight powers, enhanced compliance requirements, greater protections for whistleblowers, and stricter disclosure protocols for public officials. The most powerful and controversial element of Loi Sapin II, however, was the “convention de compensation d’intérêt public” (CCIP). Also known as a transaction pénale, the CCIP is a settlement mechanism modeled on the American deferred prosecution agreement (DPA). This tool would have allowed agreements between companies and the government, by which an accused corporation would institute compliance measures and pay fines (capped at 30% of average revenue over the preceding three years) in lieu of facing prosecution.
Just before the text of the law was formally presented, however, the Conseil d’État – the government body that must review draft legislation sponsored by non-parliamentarians before it can be introduced in Parliament – issued a negative opinion on the CCIP. When the text was submitted to the government on March 30, it did not include the transaction pénale. Procedurally speaking, the provision isn’t yet dead – it may still be reintroduced by members of Parliament. Nevertheless, the opinion of the Conseil d’État says a lot about France’s approach to anticorruption, trends in global enforcement, and the prospects for universal settlement standards in a world where legal cultures differ substantially.
Criticism of France’s lackluster enforcement, in general, and support for the CCIP, in particular, were not enough to sway the Conseil d’État, which found that the proposed provision contradicted the aims of justice: maintenance of public order and prevention of recidivism. Specifically, the opinion noted the lack of public oversight in the proposed settlement process. Although, by the draft law’s terms, the ultimate settlement agreement would receive a public hearing before a magistrate judge, the purpose of such a hearing would only be for final approval. In the eyes of the Conseil d’État, truthful fact-finding, general deterrence, and involvement of victims would be sacrificed along the way. The opinion also expressed the view that settlements are ill-suited for corruption cases, which often involve serious wrongdoing and numerous perpetrators. This observation touched upon another main concern of the Conseil d’État: under the proposed arrangement, settlement would only be available to corporations accused of corruption-related crimes. Individuals could not settle and corporations could not settle in other contexts, a state of affairs that would undermine the consistency of principles of justice and could pose practical difficulties.
The Conseil d’État maintained some leeway and did not completely rule out a settlement procedure with better safeguards than the one proposed in Loi Sapin II. One thing is clear: France needs an alternative. The CCIP was widely recognized by French and international analysts as a hallmark of Loi Sapin II, the key to showing a good faith commitment to fighting foreign corruption. Transparency International France and French business interests have long called for the adoption of such a settlement mechanism. The Conseil d’État’s opinion and the sterilized version of Loi Sapin II constrain French authorities not only in practical terms, but in a symbolic sense, too. The protestations of CCIP critics on the grounds that the law is unjust sound almost comical in light of the complete inefficacy of the current anticorruption regime in France.
Nevertheless, the Conseil d’État raised legitimate questions about the transparency of DPA-style procedures. Such questions have arisen in the American context, as well. Other countries – like the UK – have developed modified versions of NPAs and DPAs that allow for heightened judicial scrutiny. Additionally, commentators have discussed the worry that, if accepted in the corporate corruption context, settlement practices may well spread to the rest of penal system in France, deepening the effects of legal reforms. Thus, it seems something else is clear, too: a successful transaction pénale in France will not – and should not – simply be an imported one.
In fact, a significant motivating factor for both sides of the CCIP debate is the desire to avoid what is perceived to be an increasing “Americanization” of justice in France. Sapin billed the CCIP as a necessary measure to guard French sovereignty against American prosecutors, American investigators, the American Treasury Department, and external monitors reporting to American judges. But the provision’s opponents – influential among them, the Syndicat de la Magistrature, the left-leaning magistrates’ union – take the position that introducing a quintessentially American, DPA-like procedure would be a far greater, more disruptive betrayal of French values. (The worry with American overreach in the FCPA sphere is part of a larger phenomenon – the Assemblée Nationale has established a committee to review the United States’ extraterritorial application of its laws).
As a general matter, if American enforcement actions are pushing other jurisdictions to address corruption on their own terms, that’s a good thing–although the effect can seem coercive and anticorruption advocates should be careful about promoting U.S.-specific models. Given the current trend in combating graft, it is likely just a matter of time before France adapts its legal system. The onus is upon lawmakers to forge a uniquely French solution. Regardless of what happens, the CCIP’s failure is evidence that we remain a long way from global standards in the fight against corruption.
Thanks for a very useful summary and analysis. In May 2015 Congress amended victims’ legislation to provide crime victims the right to timely notification “of any . . . deferred prosecution agreement” federal prosecutors offer a defendant. Since the courts have asserted the authority to approve deferred prosecution agreements (United States v. Saena Tech Corporation, Criminal No. 14-66 (D. D.C. 2015) ), the right to advance notification of an agreement offers victims the opportunity to challenge agreements that are too lenient.
Perhaps inclusion of such a provision in the French legislation would help temper opposition?
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