Enforcement authorities worldwide are increasingly confronted with internal investigations conducted by companies under investigation. This type of “cooperation” plays a significant role in their enforcement approach, but the trend has also fuelled the debate on individual rights, legal privilege and the degree of cooperation required to receive prosecution-related credit. While companies need to be aware of these issues in order to make an informed decision on whether to cooperate with enforcement authorities, the issues do vary by country. In earlier articles, we discussed the Dutch, UK and US angle. This month, we turn to France, a jurisdiction which has in recent years significantly increased its criminal enforcement efforts.
With the enhanced enforcement framework, internal investigations in France will become increasingly important, particularly within the context of an envisaged CJIP. However, a careful balancing act is necessary between the need, in the context of a CJIP, of cooperating with authorities, and the preservation of fundamental rights of defence and protection against self-incrimination of individuals.
In 2016, France introduced Sapin II, a new legislative framework to tackle bribery and corruption. That law also introduced the possibility for legal entities subject to Sapin II and prosecuted in France to enter into a Convention Judiciaire d’Intérêt Public (CJIP) with the French authorities. This is a settlement transaction similar to the Deferred Prosecution Agreements (DPAs) which already existed in the US and the UK.
The CJIP process provides several advantages for a legal entity subject to an investigation by French prosecutors. For example, a CJIP does not lead to a violation being included in a criminal record. Also, entities that benefit from a CJIP can avoid other sanctions, such as being excluded from public tenders or the closing of establishments which were complicit in carrying out the violation. Given that since 2016, 11 CJIPs have been entered into and published on the ARA website, French enforcement will become increasingly important in the upcoming years.
The law does not specifically encourage or reward self-reporting. However, much guidance has been published by various institutions for CJIPs and internal investigations; these shed further light on what is expected from companies under investigations. First, the Agence Française Anticorruption (AFA), an organisation within the Ministry of Justice charged with assisting other regulatory authorities with the detection and prevention of corruption, and the Parquet National Financier (PNF), the national prosecutor specialised in economic and financial crimes, published a joint guidance on the implementation of CJIPs (ARA/PNF Guidance) on 26 July 2019. Second, the Ministry of Justice published a bulletin about its prosecution policy on combating international corruption (Bulletin) on 2 June 2020. Finally, the Conseil National des Barreaux (CNB), the French bar association, published non-binding guidance for French lawyers on the role and rules of an attorney in the context of internal investigations (CNB Guidance) on 12 June 2020. Below are some key takeaways regarding the conduct of internal investigations as outlined in these documents, particularly in the context of potential collaboration with regulatory authorities.
According to the Bulletin, the possibility to enter into a CJIP depends on certain factors, namely:
As to the third factor, the AFA/PNF Guidance explicitly states that cooperation with prosecuting authorities is a prerequisite for entering into a CJIP. While a footnote acknowledges that such cooperation is also subject to the rules of professional confidentiality, the French authorities expect that a legal entity wishing to enter into a CJIP must actively contribute to arriving at a determination of the relevant facts in a timely manner. It further stresses that legal representatives of the legal entity under investigation remain personally criminally liable, and that the internal investigation carried out by the company must also help establish individual liabilities. Finally, principal witnesses and relevant documentation must be forwarded to the prosecutors.
The Bulletin stresses the importance of being forthcoming, where the Ministry of Justice highlights that, while there is no legal obligation for legal entities to do so, voluntary disclosure would help them obtain further clemency from the PNF and would be taken into consideration. Both documents send a clear signal that legal entities have to consider proactive disclosure if they desire clemency and the possibility of a CJIP.
In the context of cooperating companies, the individual’s rights deserve attention. The CNB Guidance also emphasises the obligations of attorneys during the conduct of an internal investigation to ensure the protection of these rights, including the need to inform individuals of their right to be represented by an attorney.
In France, as in the Netherlands, the principle of being a good employee may, under certain circumstances, require employees to cooperate with their employer when the employer conducts an investigation on the employee’s behaviour. At its simplest, the employee is expected, under his or her duty of loyalty to its employer, to answer questions regarding work performance and account for his or her activity, during a meeting scheduled in regular offices hours. However, the interview should not be held in a coercive manner, and the use of promises, offers, threats or manoeuvres are not authorised and can be sanctioned under French criminal law.
Under French law, only the client benefits from and can waive legal privilege for information and documentation that qualifies as privileged. This is essentially information that is collected or advice given within the context of the role of the attorney as an adviser to the client or within the preparation of the client’s defence. Based on these principles, the CNB Guidance concludes that the work of external counsel during the course of an internal investigation can be subject to legal privilege, and that the client does not have to provide such information to a regulatory authority. It does, however, caution against qualifying information as privileged too broadly. It also highlights that, in certain instances, information can lose its privileged nature; for example when it is too widely distributed within the company. It remains to be seen how the CNB Guidance will influence the discussion on the importance of privilege within the context of criminal investigations and how this will impact the expectations of French authorities in the context of a potential CJIP.
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