Sapin II - French DPA (Article 22)

Decree No. 2017-660 was published on 29 April 2017. Its purpose is to explain the application rules of the French DPA (Transaction judiciaire) created by the “Sapin II” Law (Law No. 2016-1691 dated 09 December 2016).

Article 22 of the “Sapin II” Bill has indeed introduced the “Deferred Prosecution Agreement”  (DPA) in Articles 41-1-2 and 180-2 of the French Code of Criminal Procedure. The procedure consists of a transactional procedure between the French Prosecutor and companies suspected of international or national corruption offences (including tax fraud and money laundering).

The objective of the French DPA is to avoid a criminal sanction for companies which will therefore pay a fine. The company would also have to implement internal compliance program improvements for three years under the control of the French Anticorruption Agency (FAC), also created by the “Sapin II” Law (see our article Sapin II Bill: is France at the cutting edge of anti-corruption legislation?)

The decree thus specifies the conditions under which the French DPA is proposed, validated and executed.

As long as the public action has not been set in motion (or during a criminal investigation under specific conditions), the proposal for a DPA is handed over by the French Prosecutor to the legal representatives of the company suspected of breaching probity (or a tax fraud or money laundering). The DPA indicates in particular (i) the obligations to which the company will be held and the manner in which they are to be performed, (ii) the maximum amount of costs that will be incurred for the implementation of the compliance program of the company under the FAC’s control, (iii) the timeframe for the targeted company to inform the French Prosecutor of its acceptance or refusal, and (iv) the amount and terms of compensation for damage caused by the offense set out in the DPA.

If the victim is identified, it is up to the French Prosecutor to inform him or her of his decision to propose the conclusion of a DPA to the accused company. The French Prosecutor lays down a period within which the victim may provide any evidence justifying the reality and the extent of the damage.

According to Article 41-1-2 of the French Code of Criminal Procedure created by the “Sapin II” Law, the Decree states that, since the company agrees with the proposed DPA, the President of the Court of First Instance is seized by request by the French Prosecutor for purposes of validating the DPA.

The request shall contain the DPA accepted by the company, the document proving the agreement of the company and the procedure for the criminal investigation or judicial investigation. The order shall be notified to the legal representatives of the company and where appropriate, to the victim, by registered letter with acknowledgment of receipt.

If the President of the Court of First Instance hands down a validation order, the latter must specify that the company has a period of ten days to exercise its right of withdrawal and how the agreement is to be executed.

In this regard, the Decree adds that, whilst the convention provides the implementation of a compliance program, the FAC is directly informed. The FAC publishes the main information of the DPA on its website. At his request and at least annually, the FAC reports to the French Prosecutor the implementation of the program and any difficulties that may arise. Furthermore, the company can inform the French Prosecutor of all difficulties encountered during the implementation of the program.

Moreover, whilst the DPA provides compensation for damage, the company shall communicate to the French Prosecutor all necessary information to justify its execution within the time limits prescribed by the DPA.

Finally and as foreseen in Article 22 of the “Sapin II” Law, the Decree explains that since the company has fulfilled the obligations of the DPA, the French Prosecutor notifies the company’s legal representatives of the extinction of the public action.

The Decree came into force on 30 April 2017.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.