What is the Sapin II Law?

Sapin II law

The law n° 2016-1691, known as the Sapin II, applied on the 9th of December 2016, relates to transparency, the fight against corruption and economic modernisation.

The Sapin II law applies to French companies with more than 500 employees and a turnover of over €100 million. It also covers all companies belonging to a group whose parent company has their registered office in France and which meets the above-mentioned criteria. By capillary action, applied to all subcontractors and external service providers of ‘large’ companies, the Sapin II law impacts a majority of French companies regardless of their size.

The challenge of the law, and more generally the probity of the country’s economic life, cannot be carried out without the companies. Thus, the ultimate goal is to see companies commit to zero tolerance policies, in line with their social responsibility approaches.

What are the concrete measures to be put in place?

Eight measures and mechanisms must be implemented to comply with the Sapin II law under the obligation of vigilance:

  • Establish and adopt a code of conduct
  • Set up an internal ethics alert system
  • Mapping its risks
  • Implement procedures for evaluating business partners
  • Implement accounting control procedures
  • Implement an internal training and awareness program for teams
  • Implement a disciplinary system
  • Monitor and evaluate the implementation of measures

The French Anti-Corruption Agency (AFA), a service with national competence created by the aforementioned law, carries out advisory and assistance missions and auditing assignments. It provides support to state administrations, local authorities and any natural or legal person, by participating in administrative coordination, centralising and disseminating information to help prevent and detect corruption, influence peddling, misappropriation of public funds and favouritism.

What are the administrative and criminal penalties in a case of an event of non-compliance with the provisions of the Sapin II Act?

A distinction must be made between the penalties applicable in the event of non-compliance with the obligations arising from the Sapin II law (administrative sanctions) and the sanctions applicable in the event of corruption, influence peddling and similar offences (criminal sanctions).

Administrative sanctions:

  • Address a warning to the company’s representatives;
  • Enforce the company and its representatives to adapt internal compliance procedures (within a maximum of 3 years);
  • 1,000,000 (proportionate to the seriousness of the breach and the financial situation of the person sanctioned – differentiated between natural and legal persons);
  • Order the publication, dissemination or display of the injunction or financial penalty decision.       

Criminal sanctions:

  • Compel the company to submitting to a compliance program within a maximum of five years (under the supervision of the AFA);
  • Convict the company to pay a community fine which can amount to 30% of its turnover.

For more information, click below:

Legifrance: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000033558528&categorieLien=id

Ministry of the Economy, Finance and Recovery: https://www.economie.gouv.fr/transparence-lutte-contre-corruption-modernisation