The French "DPA" and the absence of double jeopardy or non bis in idem protection

The US has long been a pioneer in implementing laws with a strong extraterritorial effect. The Foreign Corrupt Practices Act (FCPA) is a prominent piece of legislation which regularly makes headlines in France whenever the US Department of Justice (DOJ) imposes sanctions on French companies¹. 

In order to address the gap in its national legislation on the issue of corruption, the French legislator implemented Law No. 2016-1691 on 9 December 2016, referred to as "Sapin II Law". Among the tools now available to the newly created National Financial Prosecutor's Office are the judicial agreements in the public interest ("Conventions Judiciaires d'Intérêt Public" or CJIP), inspired by the Deferred Prosecution Agreements of the FCPA.

A criminal settlement ending prosecution under certain circumstances

The CJIP is a settlement mechanism through which the French Public Prosecutor will drop judicial proceedings if the prosecuted company agrees to pay a fine of up to 30 per cent of its average annual turnover in the last three financial years and/or to implement compliance measures². The CJIP specifies the company's obligations, i.e. the amount of the fines and the specific measures to be implemented.

The CJIP differs from the DPA as it only applies to corporations. More specifically, it will apply to companies with a minimum of 500 employees and with an annual turnover of € 1 million. Its scope is also limited ratione materiae as it applies to specific matters: bribery, influence peddling, and laundering the proceeds of tax fraud.

Once the CJIP is accepted by the company, confirmed by the judge and fully implemented/performed depending on the company's obligations, prosecution can no longer occur. On the contrary, if the conditions set forth in the CJIP are not satisfied the prosecution can resume.

The CJIP mechanism has already proved somewhat efficient with three CJIPs concluded since the law was implemented: HSBC Private Bank on 14 November 2017, Kaeffer Wanner and SAS Set Environnement on 23 February 2018. 

The potential collateral effect of the CJIP

Multinational companies face the risk of multiple prosecutions when the same facts can justify prosecution in more than one country. This risk is naturally increased in corruption cases. Despite the fact that the CJIP does not require companies to plead guilty, an acknowledgment of certain facts may be required. Such acknowledgment could lead to additional investigation in other jurisdiction (or could be used by potential litigants in subsequent civil litigations).

There are no international framework to limit such risk. If the US practice of denying the application of the non bis in idem principle is often mentioned³, one should not forget that in France as well, facts that have been prosecuted - or been subject to the equivalent of a DPA - can also be prosecuted in France. 

This issue recently arose before the French Supreme court when it ruled that the Paris court of appeal could hear a claim of bribery based on facts previously submitted in a guilty plea before a US court⁴. This decision is the latest ruling in the Oil-for-food scandal. In 2007, Vitol had agreed to pay a US$ 17 million fine when charged by the New York Supreme Court for a bribery offence. Nonetheless, French courts decided they could hear the case anew since the facts occurred on French territory, which constitutes one of the jurisdictional criteria for French criminal courts.

This absence of protection of a party engaging in a settlement – as a DPA or a CJIP –against the dangers of double proceedings undermines the efficiency of such mechanism.

A necessary co-operation to successfully tackle corruption

Among European member states, the transnational application of the non bis in idem principle is granted⁵. The European Court of Justice ruled that when "following such a procedure [here, a criminal settlement], further prosecution is definitively barred, the person concerned must be regarded as someone whose case has been 'finally disposed of'", regardless "the fact that no court is involved in such a procedure"⁶. In the light of this decision, the settlement of a CJIP could prevent the company from being prosecuted before the courts of another member state.

Outside of the EU, it appears that states are keen on developing a co-operation to successfully fight corruption. For instance, when sanctions occur on the national territory of a foreign company prosecuted under the FCPA, US authorities are now more likely to take such sanctions into account when determining the amount of the potential fine⁷. 

This tendency has been recently confirmed by the US DOJ which, on 9 May 2018, has announced a new policy regarding the coordination of corporate resolution penalties providing for a better cooperation at a national level but also at an international level to reduce "Pilling on". According to this new policy, "the Department should also endeavour, as appropriate, to coordinate with and consider the amount of fines, penalties, and/or forfeiture paid to other (…) foreign enforcement authorities that are seeking to resolve a case with a company for the same conduct"⁸.

Thus, although no binding international agreements govern the issue of the application of the non bis in idem principle, when dealing with criminal settlement, it may be assumed that foreign transactions are taken into account by public authorities when determining the fine's amount. 

Nonetheless, such gap in the legislation and the lack of judicial foreseeability that derives from it is far from satisfying. Understandably, French law is determined to fight corruption, but these measures cannot be implemented at any cost. The challenge for the years to come will be to set up international regulations that will provide corporations with a reliable framework that will encourage disclosure and prevent uncoordinated enforcement actions.

With thanks to Lisa Vivent of Ashurst for her contribution.

1. Fines reached US$398 million for Total in 2013, US$772 million for Alstom in 2014, and up to US$8,6 billion for BNP Paribas in 2014.
2. Article 41-1-2, I of the French Code of Criminal Procedure.
3. US –v- Duarte Acero, 296 F 3rd 1277, 11th Circuit, 2002.
4. Cass., Crim., 14 March 2018, n° 16-82.117. 
5. Article 54 of the Convention Implementing the Schengen Agreement; Article 50 of the European Convention on Human Rights. 
6. EUCJ, 11 February 2003, Gözütok and Brügge, case (C-187/01) (C-385/01), see paragraphs 30 and 31.
7. DPA of SBM Offshore, 29 November 2017: when calculating the SBM's US$238 million fine based on facts of corruption, the US Department of Justice credited SBM's payment of a US$200 million penalty it previously settled on with the Dutch Public Prosecutor's Office in connection with the same facts of corruption (available at: https://www.justice.gov/opa/pr/sbm-offshore-nv-and-united-states-based-subsidiary-resolve-foreign-corrupt-practices-act-case). 
8. U.S. Department of Justice, "Policy on Coordination of Corporate Resolution penalties" (9 May 2018) (available at: https://www.justice.gov/opa/speech/file/1061186/download).