For some time now France has been behind its European peers in terms of managing and mitigating corruption throughout the business world. The French Anti-Corruption Agency passed a bill in 1993 known as the Sapin Act which was aimed at identifying and punishing acts of corruption throughout France. Since then, France has furthered its fight against corruption and implemented the Sapin II on December 9, 2016, furthering the country's commitments to transparency, fighting corruption, and developing a healthier economy.
Sapin II did not take effect until June 1, 2017and allowed for the country to coincide French anti-corruption standards with that of their international peers. Sapin II also outlined corporate compliance guidelines as well as defining whistleblower reporting procedures while prohibiting retaliation against said whistleblowers. The implementation of Sapin II was a significant step forward for France bringing the country’s compliance standards to be more similar to that of other European countries, however, despite Sapin II the country still remains ranked 23rd least corrupt country in Transparency International’s Global Corruption Perception Index.With this being the case France has chosen to reexamine Sapin II and release an altered document known as Sapin III. With the inevitable coming of Sapin III, it is ever more important for organizations to understand the French compliance landscape and best prepare for what might come with Sapin III. Below are some requirements dictated by Sapin II, last updated on January 31, 2022:
· Code of Conduct and Training. Sapin II dictates that organizations must create and implement a corporate code of conduct outlining expectations for all members of the organization. In addition, effective compliance training must be provided to ensure that all relevant employees have a clear understanding of mitigating policies and procedures, especially those that are regularly exposed to possible corruption.
· Reporting. Sapin II requires that organizations provide all employees with easy access to internal reporting systems that can be used to report potential acts of misconduct.
· Identifying Risks. Organizations must develop effective means of identifying risks and developing mitigation factors. Risks are constantly changing so organizations must maintain continual analysis and provide updates for the current risk environment. Risks that should be analyzed contain but are not limited to vendors, customers, and suppliers.
· Transparency. Sapin II requires that adequate controls be implemented throughout the organization to better offer transparency in departments such as accounting.
Sapin II to Sapin III
Sapin II’s fight to reduce corruption does not affect every organization throughout France. Sapin II currently only pertains to both public and private organizations that are headquartered in France withat least 500 employees and a revenue of €100 million. This also pertains too organizations in which their parent company is headquartered in France and meets the other previously mentioned parameters. Failure to comply with Sapin II guidelines can result in a fine imposed by the French Anti-Corruption AgencyRanging from €200,000 to €1 million. With Sapin III around the corner, organizations must be prepared for its potential changes. While nothing has been concretely stated, the main tenets of Sapin II should largely stay the same. Other alterations include: the requirement for a parent company to be headquartered in France will be eliminated, Sapin III looks to offer betterfinancial and legal protections to whistleblowers, and further clarify French anti-corruption policy.