The first French judicial settlement agreement created under a recent law was concluded between HSBC Private Bank and the Financial National Public prosecutor's department for a sum of 300 million euros. See below a focus on this new alternative dispute resolution of penal offences.
Introduced in France in 2016 and named after the French Finance Minister Michel Sapin for his second major piece of legislation, the recent law has become referred to as “Sapin II” law. The judicial settlement agreement of public interest is a settlement process directly inspired by American "deferred prosecution agreement". This law permits a company suspected of corruption, trading of favors, bleaching, or bleaching of tax fraud to negotiate the amount of a fine without admission of liability, and without collecting a police record. In particular, this prosecution settlement procedure allows companies to avoid being barred from participating in public procurement tenders.
Conditions for application of settlement
This settlement procedure can be applied at the request of the Public prosecutor, as long as formal indictment has not been rendered. However, when seized, investigating judge in charge of the case also has the possibility of transmitting the case to the Public prosecutor, who can then commit negotiations with the concerned legal entity. This procedure may not be implemented without the Prosecutor’s consent.
Object of the settlement agreement
The agreement can concern the following obligations:
• Pay a fine of public interest in the Treasury the amount of which will be fixed in " proportionally to the advantages pulled by the breaches noticed within the limits of 30 % of the annual average turnover”
• Submit itself, for a maximal duration of 3 years, to its fees and under the control of the French Agency anticorruption (AFA) to a program of putting in conformity including measures of warning and detection of the facts of corruption.
• Repair the damages caused by the offences to the possible victims.
Ratification of the agreement
In case of agreement between the concerned legal entity and the Prosecutor, the latter will be seized by request the president of the “Tribunal de Grande Instance” for the purposes of ratification of the convention.
At the end of a hearing with all parties, the president of the Court will make an order in which he will decide to confirm or not the joint proposal having verified the legitimacy of using this procedure, its regularity, the conformity of the amount of the fine and the proportionality of the measures planned in light of the alleged offenses and advantages procured.
The order, the amount of the fine and the agreement must be set out in the statement of the Prosecutor and are published on the web site of the AFA.
Effects of the agreement
At the expiration of a deadline of ten days of retraction, the decision of the Court is effective. carried out.
This settlement agreement is not a statement of liability and cannot be compared with a criminal sentence.
During the execution of the agreement, the prosecution deadline is suspended. If it is completely executed, the prosecution is abandoned.
On the other hand, the Prosecutor may initiate the public lawsuit if the concerned legal entity does not totally perform its obligations.
In this last case, and except the confidentiality of the negotiations, the Prosecutor may state in front of the jurisdiction of investigations or judgment of the statements or documents handed during the procedure.
When the agreement is not executed, the Prosecutor notifies the breach of the agreement signed. Then, the fine of public interest paid in the Treasury is refund and recovered by the concerned legal entity , but the AFA fees are not.
It is necessary to note that the judicial agreement of public interest does not preclude civil plaintiffs not yet compensated to pursue claims in front of the civil jurisdictions.
Moreover, it does not exclude the risk of lawsuits instituted by foreign authorities for the same facts.
Finally, even when an agreement is concluded, the managers of the company can be sued in different criminal proceedings as natural persons. In this case lawsuits against the former managers of HSBC Private Bank should be maintained.
Our team is at your disposal for any questions about warning of the risk of corruption and statutory conformity, as well as for the assistance in case of criminal proceedings.