The Sapin 2 law, in its anti-corruption component, aims to combat corruption (influence peddling, illegal taking of interest, misappropriation of public and private funds, etc.). It makes the implementation of an internal prevention system essential, structured around 3 central pillars: the commitment of the governing body, corruption risk mapping, and the management of these risks.
Upon its promulgation on December 9, 2016, Law No. 2016-1691 on transparency, the fight against corruption, and economic modernization had broad ambitions. Michel Sapin, then Minister of the Economy and Finance, wished to “proclaim an exemplary Republic.” He presented the text as one that “will allow France to reach the level of the best international standards in the field of transparency and action against corruption.” This legislation is a response to criticism from the OECD judging France’s policy as insufficient regarding corruption. It is also a response to the aspirations of the French people in search of more ethics and justice.
What are the key measures of this law? What is the assessment? Two deputies looked into the matter in 2021, commissioned by the Law Commission of the National Assembly responsible for evaluating the Sapin 2 law. Raphaël Gauvain and Olivier Marleix presented a report of 50 recommendations in July 2021.
A look back at the 2 central themes: anti-corruption and transparency.
The fight against corruption appears second in the title of the law. However, the prevention of influence peddling, extortion, illegal taking of interest, misappropriation of public and private funds, and favoritism represents a major component of the legislative text.
The Sapin 2 law innovates by involving companies in the action against corruption. Since 2017, they have been required to deploy a system, or sapin 2 software, for compliance with the Sapin 2 law intended to prevent risks, identify prohibited behaviors likely to characterize acts of corruption or influence peddling, and punish them. It is divided into 3 pillars: the commitment of leaders, corruption risk mapping, and risk management. This last pillar is itself structured into different measures that companies are required to implement:
The obligation concerns companies employing at least five hundred employees – or a subsidiary of a group whose parent company has its registered office on national territory and whose workforce includes at least five hundred employees – and whose turnover or consolidated turnover is greater than 100 million euros.
Since 2016, in the event of a legal entity being implicated for acts of corruption, influence peddling, money laundering, or certain tax frauds, the Public Prosecutor may decide to initiate legal proceedings or, on the contrary, waive them to conclude a judicial public interest agreement (CJIP).
Inspired by American and English justice, the CJIP is an alternative tool for transactional justice. The objective is to encourage cooperation. To benefit from it, the legal entity must acknowledge the facts and agree to collaborate with the justice system. According to the Public Prosecutor’s decision, it must commit to paying a fine to the State and/or implement a compliance program under the supervision of the French Anti-Corruption Agency (AFA) and/or compensate victims. The agreement is subject to a judge’s approval.
The introduction of this negotiated justice has been – and still is – debated. Its detractors denounce the possibility for fraudsters to “buy their innocence.” Its defenders see it as an accelerator of procedures.
Since the entry of the CJIP into French law, 14 agreements relating to acts of corruption have been concluded. They are published on the AFA website. The agreements have all been accompanied by significant fines. Some have led to the implementation of internal compliance programs.
In 2021, Deputy Raphaël Gauvain described this tool as a “great success of the Sapin 2 law,” calling for its reinforcement.
The 2016 legislation established the French Anti-Corruption Agency (AFA), replacing the Central Service for the Prevention of Corruption (SCPC). The agency has expanded powers. Its mission is to “prevent and detect acts of corruption, influence peddling, extortion, illegal taking of interest, misappropriation of public funds, and favoritism.”
More specifically, the agency is responsible for:
The AFA benefits from broad guarantees of independence in the text, but it is placed under the joint authority of the Minister of Justice and the Minister of Finance. In their 2021 recommendations, the deputies advocate for a clarification of the status by transferring oversight responsibilities to the High Authority for Transparency in Public Life (HATVP).
The Sapin 2 law is part of the reform movement initiated on January 29, 1993, with the Sapin 1 law on the prevention of corruption and transparency in economic life. The latter, focused on issues of political and public corruption, was supplemented in 2013 by two new legislative texts, one on transparency in public life and the other on tax fraud and major economic and financial crime.
But it is the 2016 law that expands and strengthens the systems. It responds to criticisms issued by the OECD and by the French people, who expect more ethics in public and economic life.
Far from being a “catch-all” text, the Sapin 2 law is an essential text that marked France’s entry into a new anti-corruption era. It introduced innovative tools into French law and integrated economic actors. However, while France’s progress was praised by the OECD in 2020, the country stagnates at 22nd place in the Transparency International ranking. Will the assessment carried out in 2021 and the recommendations of the National Assembly give rise to a “Sapin 3 law” to continue the progress?
In October 2016, a few weeks before the vote on the text, 57% of French people considered that people exercising important responsibilities or having power were corrupt. This figure, from a survey published by Transparency International France, expressed the strong expectation of citizens regarding ethics.
In this same survey, 79% of respondents considered the international organization’s proposal to regulate lobbying to be “effective.” This is what the Sapin 2 law legislated.
Since 2017, private law interest representatives (companies, associations, unions, etc.) must register with the High Authority for Transparency in Public Life. The digital directory is accessible to all. Every citizen can know the legal entities acting before the State and national elected officials to influence a public decision. The text also regulates lobbying, exercised under the control of the HATVP, in compliance with ethical rules.
The 2021 assessment is positive. 2,200 interest representatives were registered with the HATVP and 30,000 activities declared. The deputies nevertheless suggest in their report a strengthening of the precision and frequency of declarations, in order to facilitate their verification.
While the concept has existed since the 1990s in France, the status of whistleblower was defined with the Sapin 2 law in its article 6.
The term refers to any natural person, disinterested and in good faith, who reveals or reports a crime or an offense, a serious and manifest violation of an international commitment, a unilateral act of an international organization, the law or regulation, or a threat or serious harm to the general interest.
The law aims to ensure the confidentiality and protection of the whistleblower, but also of the targeted legal or natural person. It sets up a secure, graduated, and supported procedure for collecting alerts. The Defender of Rights is a pivotal interlocutor in the system. Its role is to “direct any person reporting an alert under the conditions set by law to the competent authorities, and to ensure the rights and freedoms of that person.”
The text guarantees the protection of the employee against dismissal or any sanction or discriminatory measure by their employer. It also establishes an offense of obstructing an alert.
This legislation was recently supplemented by the law of March 21, 2022, which transposes and strengthens the European directive of October 23, 2019.
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The Sapin 2 law aims to raise French legislation to the level of standards, in terms of action against corruption, of the most advanced countries in the field. The OECD, in its 3rd evaluation audit of France’s anti-corruption policy, highlights in this sense “a notable leap in the French legal framework for combating offenses which has allowed France to regain credibility and visibility in this field.”
Affected are companies employing at least five hundred employees, or belonging to a group of companies whose parent company has its registered office in France and whose workforce includes at least five hundred employees, and whose turnover or consolidated turnover is greater than 100 million euros. Also affected are State administrations, local authorities, their public establishments and semi-public companies, and associations and foundations recognized as being of public utility.
The Sapin 2 law innovates by involving companies and public actors in the action against corruption. They are required to deploy a compliance system intended to prevent risks, identify prohibited behaviors likely to characterize acts of corruption or influence peddling, and punish them.
Governing bodies have the obligation and responsibility to implement an internal corruption prevention system. This system is structured around 3 inseparable pillars: the commitment of the governing body, corruption risk mapping, and the management of these risks.