Previous posts here, here and here highlighted the U.S. prong of the recent Foreign Corrupt Practices Act enforcement action against French bank Société Générale S.A. (SoGen) “relating to a multi-year scheme to pay bribes to officials in Libya.”
As discussed in our previous March 2018 guest post, the French Parquet National Financier (“PNF”) (French National Financial Prosecutor) made it clear by entering into two corruption related deferred prosecution agreements (in French convention judiciaire d’intérêt public (“CJIP”)) in February 2018, that it will use this new French legal enforcement tool to leverage quick settlements with legal entities.
With the Société Générale settlement it has done precisely that. But this time, the PNF went even further by cooperating for the very first time with the U.S. Department of Justice (“DOJ”) in an international anti-corruption case.
Although Société Générale announced on the same day as the U.S. enforcement action that it reached a settlement (CJIP) with the PNF with respect to the Libya corruption case (based on the same core facts alleged in the U.S. action), the actual CJIP was not made available to the public. Since Société Générale did not exercise its right of withdrawal within a 10-day period following the approval from the French Court (tribunal de grande instance de Paris) on June 15, 2018, the CJIP was published on the French Anti-Corruption Agency (“AFA”)’s website (see here). This means that the CJIP is now final and the criminal investigation in France will be suspended for the time of the monitoring and, if Société Générale respects all its obligations, the investigation will be closed.
Set forth below are some observations regarding this French development.
Regarding the calculation of the public interest fine: The CJIP set the amount of the public interest fine at EUR 250,155,755 (same amount being paid to the DOJ), considering that this amount is proportionate to the benefits gained by Société Générale from the offenses found. The CJIP calculated that Société Générale obtained an illicit gain of EUR 334,874,863 of which half is taken into account in the CJIP given the sharing agreement with the DOJ (i.e., EUR 167,437,431). The CJIP set an additional penalty in the amount of EUR 82,713,324 taking into account aggravating factors, i.e., exceptional gravity of the offending conduct and the circumstance that those offenses were committed for years within established relationship with foreign public officials.
Mitigating factors were however, applied with respect to the monitoring. The CJIP provided that Société Générale be subjected, under the supervision of the AFA, to a two-year monitoring program. The CJIP took into consideration the fact Société Générale disclosed a number of documents allowing an assessment of the improvements it made since 2010 to its ethic compliance and fight against money laundering and corruption policy, which is still being developed within the implementation of the Sapin 2 law. As a result, the CJIP limited the duration of the monitoring to 2 years (3 years being the legal maximum) and Société Générale committed to having the AFA assess during this time period the quality and the effectiveness of its implemented measures. The French have therefore maintained control over the remediation for this French company. This is the third time in few months that the PNF imposes monitoring over French companies and one can expect that monitoring be extended in upcoming CJIPs and French companies will need to adapt to this new instrument. Legal advisers and experts will need to hire counsel aware of monitoring practices and having international experience in monitoring.
The PNF cooperated completely with U.S. enforcement authorities in the investigation and settlement of this case. For this new development, from the French side, this means that the PNF has necessarily established new and stronger relationships within the U.S. enforcement community. Those relationships are likely to lead to further cooperative efforts in the future. The PNF went so far as to thank formally the DOJ and the federal prosecutor of New York (Eastern District) for their “trust and cooperation” in its press release published on its website.
From the U.S. side, this result demonstrates that France has now implemented a legal regime to solve anti-corruption cases, which is recognized by US authorities. In this regard, the DOJ and the PNF both insisted on the joint significant cooperation. The PNF also indicated that this was a major advance, since it was the first CJIP for international corruption signed by the PNF and the first cooperative agreement with the DOJ.
Also important to note is that the DOJ decided that it was not necessary to impose monitoring over Société Générale given its cooperation with the DOJ (the DOJ did note that cooperation was “not full”), the significant remediation, and the ongoing monitoring by the AFA.
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