The powers of the French Anti-Corruption Agency

This Agency, created by the Sapin II Law, is the successor to the Central Service for the Prevention of Corruption.
The scope of competence and the definition of the French Anti-Corruption Agency are defined in Article 1 of the Sapin II Law. The French Anti-Corruption Agency is a national regulatory authority under the aegis of the Minister of Justice and the Minister in charge of the Budget, which assists the competent authorities as well as the persons in charge of control for the company in preventing and detecting acts contrary to the law and regulations as well as to the code of conduct, in particular concerning corruption and influence peddling but also misappropriation of public funds or illegal interest taking. It is therefore responsible for ensuring that anti-corruption measures are respected, as stipulated in Article 17 III of the Sapin II law, in particular by verifying the accuracy of the information provided by the company's representatives. Following its audit, the French Anti-Corruption Agency will draft a report containing "the agency's observations on the quality of the corruption prevention and detection system implemented within the audited company" and recommendations for improving procedures. In addition, the French Anti-Corruption Agency magistrate "may issue a warning to the company's representatives" and "refer the matter to the Sanctions Commission" pursuant to the provisions of Article 17 IV of the aforementioned law, so that the company may modify its internal compliance procedures. The report is sent to the authority that referred the matter to it and to the representatives of the company that was subject to the inspection. If the company has not adapted its internal compliance procedures by taking into consideration the recommendations of the French Anti-Corruption Agency, within a period not exceeding three years, the commission may fine the company up to 200 000 euros for individuals and one million euros for legal entities. The French Anti-Corruption Agency thus has coercive power to guide the company towards anti-corruption compliance, if one considers that one million euros for a large company is a significant sum.
Nevertheless, the Sapin II law is innovative because it allows for a change in behavior on the part of companies in a preventive manner. Only if companies do not adopt a preventive and self-regulatory behavior will they be condemned to a sanction. Moreover, the traceability of information, particularly concerning the fight against corruption, through the non-financial performance statement allows civil society to mobilize in order to bring about a change in the overall behavior of the company with respect to its compliance with the law, ethics and its code of conduct.

The role of the sanctions committee

On the procedural level
The principle of legality of offenses and penalties
With regard to the first decision dated July 4, 2019 and the second decision dated February 7, 2020 issued by the French Anti-Corruption Agency Sanctions Committee, we note that the Committee relies on the principle of the legality of offenses and penalties to deal with breaches that may lead to sanctions. In its second decision dated February 7, 2020, the Commission argues that the violations that may lead to a sanction cannot be the non-fulfillment of an injunction, but must be related to an existing situation that has existed between the date of entry into force of the anti-corruption law and the date of the Commission's decision, even though the said law imposed that the prevention and detection plan had to be published as of June 1, 2017, as mentioned in its first decision dated July 4, 2019. In the first decision it can therefore be noted that the commission only sanctions non-compliances still present on the day of the decision.
The Commission also argues that it does not have to rule on "a possible misuse of procedure" committed by the French Anti-Corruption Agency, which is requesting documents that may contain "indications of tax fraud, restrictive competition practices or for purposes of criminal investigation." In fact, it is up to the criminal court to rule a posteriori on the legality of producing documents.

The principle of the rights of the defense
In its second decision, the commission affirms that the principle of the rights of the defense applies to the preliminary examination of exchanges before the French Anti-Corruption Agency. When referring a case to the commission, the director of the agency must state the grievances clearly and precisely, on pain of nullity.

On the merits
The burden of proof
The Commission establishes that it is up to the person being monitored to provide proof that he or she has fulfilled his or her obligations so that the French Anti-Corruption Agency can check the quality of the system put in place by the company, in the event of alleged breaches. If the respondent does not provide sufficient information, the burden of proof is reversed, since the French Anti-Corruption Agency is deemed to provide proof of the breach.
However, despite the non-binding nature of the French Anti-Corruption Agency’s recommendations, it is fortunate to note that company managers who have adapted their compliance procedures to the recommendations are at an advantage since they are "presumed to meet the requirements of the law", whereas those who have only partially followed or not applied the French Anti-Corruption Agency’s recommendations must "demonstrate the relevance, quality and effectiveness of the system for detecting and preventing corruption" by proving that their method is correct. Indeed, the Commission does not examine the compliance of compliance procedures with respect to the French Anti-Corruption Agency recommendations but with respect to Article 17 of the Sapin II law, which is binding.

Risk mapping
The commission must carry out a complete examination in order to identify, independently of the recommendations made by the French Anti-Corruption Agency, whether the method adopted by the company is relevant, real and qualitative. In addition, the Commission establishes that the French Anti-Corruption Agency may not require the audited company to update its risk mapping annually.

Accounting control procedures
The Commission and the French Anti-Corruption Agency seem to have the same requirements on this point. In its second decision, the Commission considered that the unification of accounting management tools constitutes a fundamental element of accounting control. However, the unfinished revision of accounting control procedures in the fight against corruption is a failure.

The code of conduct
A paradigm shift appears between the first and second decisions rendered by the commission. Although in the first decision, the Commission seems more conciliatory than the French Anti-Corruption Agency concerning the quality of the code of conduct which, according to the Commission, was not deficient if it presented "generic" examples of prohibited behavior, in the second decision, the Commission strictly applies Article 17, II, 1° of the Sapin II Law and explains that the code of conduct must contain definitions and concrete examples of behavior to be proscribed that could be qualified as corruption or influence peddling.
It also argues that the code must be translated in order to be more accessible to all; and it must be attached to the internal regulations of French companies.

In view of the importance and number of breaches, the Commission has issued a compliance order giving a deadline for each point addressed (code of conduct, accounting controls, etc.). It can be considered that the most important thing for the French Anti-Corruption Agency and its committee is that companies adopt concrete and real compliance programs, create internal and external control mechanisms and allow for transparent traceability of their compliance approach necessary to prevent corruption and influence peddling related to contrary behaviors or acts on the part of stakeholders and subsidiaries. The group or company that tends towards this virtuous approach, even if it is not perfect, will demonstrate its responsibility to the authorities. The same is true in court.