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Since the enactment of the
Foreign Corrupt Practices Act ("FCPA") on 1977, USA has been the leading the
international fight against corruption. FCPA sets forth a standard for other
jurisdictions in its extraterritorial and rigorous enforcement of its rules and
regulations against corruption. In addition, OECD Convention on Combatting
Bribery of Foreign Public Officials in International Business Transactions
("Convention") has been another push force in the field, obliging its
signatories on a global scale to strengthen their laws to fight international
corruption. Following the US leadership and acting under the awareness raised
by the Convention on the issue, recent years witnessed legislative developments
from many countries which sought more effective ways of fighting corruption. This article will focus on two of the recent
legislative updates in the arena of fighting corruption, namely, the
developments in France and Germany.
France
On 8 November 2016, Sapin II, an anti-corruption
reform law, was accepted by the French parliament. This was preceded by months
of debate and alterations regarding the content of the proposed legislation. The
reform comes after criticism that France has not enforced any foreign bribery
cases, even though large French companies such as Total, Technip and Alstom has
been subject of US anti-corruption enforcement actions within scope of the
Foreign Corrupt Practices Act. All three companies agreed to pay more than $300
million to settle the FCPA charges. In addition, Transparency International's
Exporting Corruption Report of 2015 criticizes French anti-corruption law due
to the lack of enforcement of the foreign bribery offence.[1]
With this, France has now joined other European countries (such as Germany and
Spain) who have updated their anti-corruption legislations.
One of the most important reforms legislated with the
Sapin II is the obligation on large firms to enforce compliance programs.
Accordingly, companies with more than 500 hundred employees and annual revenue
of at least € 100 million are obliged to enforce compliance programs. The
compliance program should include (i) a risk assessment mechanism, (ii) a code
of conduct, (iii) accounting controls, (iv) third party due diligence
mechanism, (v) a system for internally reporting suspected wrongdoings, (vi)
training for employees, (vii) a policy regarding the disciplinary actions to be
taken where necessary and (viii) a mechanism for evaluating the compliance
system. In case companies do not abide by this requirement, the new
anti-corruption agency to be established as per Sapin II, will have the power
to (i) impose fines, (ii) issue warnings or (iii) injunctions and (iv) the
agency may publish this decision.
Further, Sapin II introduces US-style deferred
prosecution agreements ("DPAs") to the French legal system for corruption
crimes.
The law also imposes a whistleblower regime, whereby
the whistleblowers are to be protected from retaliation, and their identities
should stay secret.
Further, foreign companies which conduct whole or part
of their businesses in France can be prosecuted under Sapin II for foreign
bribery. Prior to Sapin II, the French law only applied to its citizens or
businesses incorporated in France in foreign countries, if these acts are
punishable under the legislation of the country, where the crime was committed.
This was a much criticized aspect of the French legislation as an impediment
for the enforcement of the crime of foreign bribery.
Finally, a separate anti-corruption agency with more
powers than its predecessor will be established as per Sapin II. Currently, Service
Central de Répression de la Corruption is the authority to deal with the
anti-corruption matters whose originally vast powers were reduced and which was
put in a more passive position through court decisions. The agency proposed in
Sapin II will recommend anti-corruption measures to administrative authorities
and companies and will be able to monitor the compliance program obligations of
large companies.
With this new law, France
aims to address the criticisms that it does not have any foreign anti-bribery
cases. The French anti-corruption regulations are aimed to be more up-to-date
and deterrent against international corruption.
Germany
According to Transparency
International's Exporting Corruption Report, Germany has an active enforcement
of anti-corruption laws. Under German law, active and passive bribery and also
bribery of foreign officials are prohibited. Similar to Turkish law, German law
does not recognize criminal liability for companies. Instead, companies are
held civilly liable. In recent years, Germany reformed its anti-corruption
regulations in several aspects and the new law entered into force in 25
November 2015. With this law (i) the scope of foreign official has been
extended, (ii) changes regarding private sector has been made and (iii) reforms
for money laundering have been enacted.
German Law against
Corruption, which entered into force in late 2015, regulates that European
Officials too, will now be considered as German officials within scope of
corruption crimes. This means that even if a certain official may not be a
German citizen, the German Law against Corruption will apply to them
nevertheless. In addition, with the new law foreign officials who accept bribes
can be prosecuted in Germany. Further,
German law now can be applied to offences committed by a German citizen abroad
or by European public officials who have their office in Germany.
Another change was in
the private sector. Previous law did not cover the private sector bribes that
were evaluated to be outside the scope of market competition. Following the
enactment of the new law, private to private bribery now includes cases where accepting or giving any benefits
without the business owner's consent leads to a breach of duty.
Accordingly,
[1] http://www.transparency.org/exporting_corruption/France
Authors: Gönenç Gürkaynak, Esq., Ç. Olgu Kama and Burcu
Ergün , ELIG, Attorneys-at-Law.