A guest post today from Paris-based Bryan Cave Leighton Paisner attorneys Cécile Terret, David Père and Perrine Ader.
Recently, the French company Egis Avia, a subsidiary of the Egis group, agreed to pay a fine of €2.6 million to end the proceedings for corruption in connection with a contract to modernise the airport in Oran, Algeria. The fine was negotiated with the National Financial Prosecutor (the “NPF”) under a French legal instrument, namely the Convention Judiciaire d’Interêt Public (Judicial Public Interest Agreement; the “CJIP”).
As a reminder, the CJIP is a tool that was introduced by the Sapin II law in 2016.
A true cultural revolution in France, the CJIP has paved the way for settlements between the public prosecutor and legal persons involved in corruption, influence peddling or tax fraud laundering, enabling the latter to avoid a criminal conviction and registration in its criminal record.
The contours of this tool are defined in the Code de procedure pénale (French Code of criminal procedure; the “CPP”), which lays down the conditions under which such agreements may be implemented.
This code also sets out a list of obligations and sanctions that may be provided for by the CJIP against the legal person concerned. According to Article 41-1-2 of the CPP, such agreements may, for example, provide for the payment of a public interest fine, the establishment of a compliance program under the supervision of the Agence Française Anti-corruption (French Anti-corruption Agency; the “AFA”) or the compensation of identified victims.
With regard to the Egis Avia case, a preliminary investigation was opened by the Nanterre public prosecutor’s office against Egis Avia in 2011, after an inspection carried out by the Brigade de Contrôle des Revenus (Revenue Control Brigade; the “BCR”) found that consultancy fees had been paid to companies domiciled in states and territories deemed to be uncooperative.
This investigation finally brought to light the existence of several contracts and disputed payments which allegedly made it possible to fraudulently remunerate several Algerian intermediaries in order to influence the award of a contract for the construction of an annex to the Oran terminal.
In 2018, Egis Avia was finally placed under formal investigation on the ground of bribery of foreign public officials and then declared that it recognized these charges and accepted their criminal characterization.
A CJIP was later signed between the public prosecutor and Egis Avia, providing for the payment of a public interest fine set at €2.6 million.
Such an agreement was carried out in accordance with Article 180-2 of the CPP. Indeed, while article 41-1-2 of the CPP provides that a CJIP may be implemented following a preliminary investigation, Article 180-2 of this code specifies that it is possible to agree on a CJIP in the course of a judicial investigation, even when the public prosecution has already been initiated.
In accordance with Article 41-1-2 I 1 of the CPP, the fine must be set in proportion to the benefits derived from the offenses established, up to a limit of 30% of the accused’s average annual turnover calculated on its past three annual turnovers, known at the date the offenses were established, namely the date on which the Public Prosecutor proposed the agreement. To this amount may be applied a multiplying coefficient depending, in particular, on the seriousness of the facts.
In the Egis Avia case, the NPF assessed the benefits derived from the litigious sum of €1,681,345, calculated on the basis of the margin expected from the disputed contract plus the commissions paid. To this was added an additional penalty of €918,655 due to the seriousness of the facts, bringing the final sum to €2.6 million.
The Tribunal of first Instance of Paris approved the CJIP on December 10, 2019. In its ruling, the Tribunal admitted that the Public Prosecutor was able to justify the amount of the public interest fine.
This settlement agreement constitutes the 9th CJIP signed in France since the introduction of this mechanism in 2016 and the 5th CJIP involving the National Financial Prosecutor, which confirms the Public Prosecutor’s intention to use this new legal enforcement tool to leverage quick settlements with legal entities.
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