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.