In other words, companies are encouraged, as part of their internal investigations, to identify individuals who may be held liable as well as key witnesses. According to the guidelines, the company must also provide the prosecutor’s office with relevant documents and, where applicable, transcripts of interviews conducted by the company or its counsel with witnesses or individuals who may be involved in the events. The guidelines emphasize the need to ensure “the preservation of evidence and, in particular, the truthfulness of testimony,” which are indeed essential requirements not only for establishing the truth but also for respecting the rights of the defense. This requires companies to adopt “ethical” internal investigation procedures that are adapted to the French judicial system.
We can, however, expect that recent developments in the CRPC procedure—specifically, the addition of a paragraph to Article 495-8 of the Code of Criminal Procedure that formalizes the practice of certain prosecutors to propose the exclusion of a conviction from criminal record entries No. 2 or No. 3—will lead to greater use of this opportunity. Similarly, the provision in the same article allowing the prosecutor to inform the individual or their attorney, by any means, of the proposals they intend to make before recommending a sentence strikes us as a very encouraging sign for the development of these mechanisms toward genuine dialogue.
Furthermore, such a procedural approach is not without risk, as evidenced by the failure of the CPRC in the UBS case. A former executive of the bank had decided to use the CPRC mechanism, which was not approved by the judge; as a result, he was referred to the criminal court to stand trial alongside his former employer. This difficulty—even if it appears to remain marginal—raises numerous questions regarding the actual scope of the admission of facts made during the CPRC proceedings, the confidentiality of which remains poorly protected in practice.
In light of these observations, only the promotion of a negotiated procedure that is attractive and protective of the rights of the defense will encourage individuals to resort to this new form of negotiated justice. It is worth recalling the famous Tesco/Rogberg case of 2019, in which all of the dismissed senior executives were acquitted after a Deferred Prosecution Agreement (DPA) was reached between the Serious Fraud Office (“SFO”) and Tesco; or the 2018 Alstom/Hopkins case, in which a British national and former Alstom employee refused to plead guilty and challenged the jurisdiction of the U.S. Department of Justice and, by extension, the application of U.S. anti-corruption law. The U.S. Court of Appeals ruled in his favor against the U.S. Department of Justice…
THE PARALLEL WITH THE U.S. FRAMEWORK
This framework outlined in the recent guidelines is reminiscent of the measures in effect in the United States, which were recently reformed. As a reminder, the U.S. Department of Justice (“DoJ”) had defined the applicable standards through a framework introduced in 2015 known as the “Yates Memo.” This so-called “all-or-nothing” approach required companies to produce all information regarding individuals involved in the disputed conduct in order to qualify for leniency (DoJ’s Principle of Federal Prosecution of Business Organizations, Focus on Individual Wrongdoers).
The new policy marks a shift by now allowing companies to “identify the individuals substantially involved in or responsible for the violation in question” (G. Colwell, T. Zeno, and C. Goldstein, “DOJ Relaxes ‘All or Nothing’ Yates Memo,” The Anticorruption Blog, November 29, 2018).
Attorney General Rod J. Rosenstein had announced this policy shift in a speech last year, advocating for a more pragmatic approach: “When we offer only a binary choice—full credit or no credit—experience shows that this delays the resolution of certain cases while offering little or no benefit.” Companies were, in fact, required to conduct a thorough analysis before initiating any cooperation. This requirement also had the effect of exacerbating internal tensions (DoJ, Deputy Attorney General Rod J. Rosenstein delivers remarks at the American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act, November 29, 2018).
TOWARD THE EMERGENCE OF A NEW FORM OF NEGOTIATED JUSTICE FOR INDIVIDUALS?
Currently, only six judicial agreements in the public interest have been concluded, so it would be premature to draw conclusions about the outcome for individuals following the conclusion of such an agreement.
The question of what strategy an individual should adopt is particularly delicate when the individual is expressly identified by the company to which investigative authority has been partially “delegated” and which led to the conclusion of a CJIP. This situation appears all the more sensitive when the CJIP is concluded following a preliminary investigation, as Article 180-2 of the Code of Criminal Procedure expressly requires the corporate entity to acknowledge the facts and accept the criminal classification applied, which closely resembles the prerequisites for a CRPC, even though in a CJIP no guilty verdict is ultimately handed down and the agreement does not result in a conviction. The statement of facts on which the prosecutor and the legal entity agree in the CJIP, as well as the need to identify, at a minimum, the body or representative capable of incurring the liability of the legal entity in question, pursuant to Article 121-2 of the Penal Code, necessarily involves reference to the role of certain natural persons.
In France, as in the United States, entering into an agreement does not imply an admission of guilt and is not binding on natural persons; however, in practice, these agreements contain very comprehensive factual statements and criminal classifications (C. Ascione Le Dreau and B. Grundler, “The Fight Against Corruption—Natural Persons Facing Plea Bargaining—David vs. Goliath?”, International Journal of Compliance and Business Ethics, Feb. 2019. Comment 31), so that the individual’s freedom of choice appears, at first glance, to be compromised once the agreement is signed.
One interesting avenue for consideration that appears to be emerging is the use of the CRPC procedure—similar to the procedure followed by the former executive of HSBC Private Bank Switzerland—which can be initiated by the public prosecutor’s office or by the individual concerned and their attorney. However, this procedure will only be feasible once the facts have been established, as required by Article 495-9 of the Code of Criminal Procedure, which requires the judge responsible for approval to “verify the facts and their legal classification.” The circular of September 2, 2004, regarding Law No. 2004-204 of March 9, 2004, which introduced the CRPC procedure, noted that this procedure was “in its very essence very different from the ‘plea bargain’ procedures that exist in Anglo-Saxon countries, in which priority is given to the defendant’s admission of guilt—with the prosecuting authority able to negotiate and drop certain charges in exchange for a guilty plea and acceptance of sentences on other charges—rather than to the reality of the acts that were actually committed.”
An analysis of the order in question highlights the various advantages of this mechanism. It effectively allows for a swift resolution of the case, avoids the uncertainties of a lengthy, costly, risky, and more high-profile trial, and enables the parties to benefit from a “negotiated penalty.”
In this case, the criminal penalty imposed does indeed appear balanced in light of the facts described, the defendant’s character, and the severity of the various offenses charged (including 10 years’ imprisonment and a €750,000 fine for the offense of aggravated money laundering, Art. 324-2, 1°, of the Penal Code).
However, despite these indisputable advantages, several factors could temper the appeal of such a mechanism. First, unlike the CJIP, the CRPC requires an admission of guilt. The effects of a conviction may be limited, as in this case, when the sentence proposed by the public prosecutor’s office provides for an exemption from entry in Bulletin No. 2 of the person’s criminal record. However, the conviction remains recorded in Bulletin No. 1 of the criminal record.
