The Sapin II Law introduced into French law an affirmative obligation for large companies to prevent corruption through the implementation of international anticorruption programs. This obligation applies not only to French companies, but to all consolidated foreign subsidiaries of large French companies.
Individuals and Legal Entities Subject to this Affirmative Obligation
The following entities are required to implement anticorruption compliance programs at the company or group level:
(i) French companies with individual revenue in excess of EUR 100 million and more than 500 employees;
(ii) French and foreign consolidated subsidiaries of such large French companies; and
(iii) French and foreign companies with a French parent company, consolidated revenue in excess of EUR 100 million, and with more than 500 employees.
The Eight Elements of the International Anticorruption Compliance Program
The Sapin II Law provides for the implementation of anticorruption compliance programs that include, at least, the following eight elements, mirroring international standards, particularly best practices from the U.S. and guidance issued by the U.K. Serious Fraud Office:
1. A code of conduct, incorporated into the company’s internal regulations, which defines and specifies prohibited conduct and behavior likely to constitute acts of corruption or influence peddling;
2. An internal alert system designed to collect reports by employees regarding acts and behaviors contrary to the aforementioned code of conduct (i.e., a whistleblowing mechanism);
3. A corruption risk assessment, to be updated on a regular basis, designed to identify, analyze, and prioritize the risks of exposure to external corruption solicitations based, in particular, on geographic areas and industry sectors where the company does business;
4. Review procedures for customers, direct suppliers, and intermediaries, taking into account the aforementioned corruption risk assessment;
5. Accounting control procedures, both internal and external, designed to ensure that the company’s books, accounts, and records are not being used to conceal acts of corruption or influence peddling;
6. Training programs for executives and employees most exposed to the risk of corruption and influence peddling;
7. Disciplinary sanctions for violations of the aforementioned code of conduct by the company’s employees; and
8. Internal procedures aimed at monitoring and evaluating the measures in place.