1 General Criminal Law Enforcement
1.1 What authorities can prosecute business crimes, and are there different enforcement authorities at the national and regional levels?
Business crimes are usually prosecuted by a public prosecutor. Upon completion of his/her investigation, a matter considered to have sufficient evidential support will be referred to trial, generally before the criminal court of first instance (Tribunal correctionnel) for a trial without a jury. In unusually complex or large business crime cases, the public prosecutor may refer the matter to an investigating judge (juge d'instruction), who will then conduct an investigation (instruction) and decide whether or not to refer the matter to trial.
These enforcement authorities usually operate at a regional level, working with local police units. Certain criminal violations – such as complex criminal environmental cases – are usually handled by the public prosecutors or investigating judges of specialised offices (pôles). Since 2013, France has had a national prosecutorial office dedicated to financial matters (Parquet National Financier, "PNF"). The PNF is composed of 18 public prosecutors. It has nationwide jurisdiction to prosecute complex financial crimes. Occasionally, when a financial case is complex and/or requires specific investigating measures, the PNF may refer the case to the investigating judges of the Paris court (pôle financier du TGI de Paris).
Certain business crimes are prosecuted by administrative agencies. For instance, cartels are prosecuted by the Competition Authority (Autorité de la Concurrence) while other anticompetitive behaviours can be prosecuted as ordinary crimes; market abuses (i.e., insider trading, market manipulation and dissemination of false information) are prosecuted either by the PNF or the Financial Markets Authority (Autorité des Marchés Financiers, "AMF").
Under certain conditions, victims of business crimes may also initiate prosecution, either by bringing cases directly before trial courts, or by requesting the appointment of an investigating judge.
1.2 If there is more than one set of enforcement agencies, how are decisions made regarding the body which will investigate and prosecute a matter?
For most of financial crimes – including corruption, influence peddling, tax fraud, money laundering, etc. – the PNF has concurrent jurisdiction with regional public prosecutors. In practice, however, complex financial cases are handled by the PNF.
For market abuse crimes, the PNF has exclusive jurisdiction (i.e., regional public prosecutors cannot prosecute), provided that the case is not prosecuted by the AMF. Since March 2015, market abuses have only been subject to one type of prosecution, either criminal (PNF) or administrative (AMF). Once a first-level investigation has been carried out (usually by the AMF investigators), the AMF and the public prosecutor will decide whether the prosecution will be criminal or administrative.
In any case, the PNF or the public prosecutors may decide to refer a case to an investigating judge.
1.3 Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?
Several administrative agencies are responsible for administrative enforcement of certain business crimes:
- The Competition Authority is the enforcement authority for cartels involving corporations (enforcement against individuals participating in a cartel is led by regular criminal authorities).
- The AMF is the enforcement authority for market abuses, provided it is not enforced criminally by the PNF (see question 1.2).
- The Prudential Control and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution, "ACPR") is the enforcement authority for non-compliance with anti-money laundering and anti-terrorist obligations of banks and insurance companies.
- The French Anti-Corruption Agency (Agence Française Anticorruption, "AFA") is the enforcement authority for non-compliance with the obligation to implement corporate compliance programmes.
1.4 Have there been any major business crime cases in your jurisdiction in the past year?
On February 20, 2019, the Paris criminal court convicted Swiss bank UBS AG of illegal solicitation of financial services and aggravated laundering of the proceeds of tax fraud, and imposed a fine of €3.7 billion. This is by far the largest fine ever imposed by a French criminal court. UBS AG appealed that decision.
2 Organisation of the Courts
2.1 How are the criminal courts in your jurisdiction structured? Are there specialised criminal courts for particular crimes?
Criminal violations are divided into three categories, which determine the applicable procedures and the participants in the process. High crimes (crimes) are criminal matters punishable by imprisonment of more than 10 years. They are always prosecuted by an investigating judge and are tried before a mixed jury in a special court (cour d'assises). Ordinary crimes (délits) are violations punishable by imprisonment from two months up to 10 years and by financial penalties. They are generally prosecuted by a public prosecutor, with an investigating judge appointed in cases of complex violations. Ordinary crimes are tried before a criminal court of first instance without a jury (tribunal correctionnel). Misdemeanours (contraventions) are violations punishable by financial penalties, and they are tried by a police court (tribunal de police). Most business crimes are ordinary crimes. However, some business crimes are not treated as ordinary crimes, but rather as "administrative offences". As such, they are not tried before regular criminal courts. For instance, cartels are tried before the Competition Authority, and market abuses are tried before the AMF Enforcement Committee (unless they are subject to regular criminal prosecution by the PNF).
2.2 Is there a right to a jury in business crime trials?
Since most business crimes fall within the category of ordinary crimes, they are usually tried before a criminal court of first instance (tribunal correctionnel) before professional judges and without a jury.
3 Particular Statutes and Crimes
3.1 Please describe any statutes that are commonly used in your jurisdiction to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
- Securities fraud
Most of the regulations governing securities violations originate from the 2014 EU market abuse regulation n°596/2014 and the April 16, 2014 directive n°2014/57/EU. The regulation and directive have been codified in the French Monetary and Financial Code (Code Monétaire et Financier, "CMF").
The main offences related to financial markets are insider trading (délit d'initié) and market manipulation (manipulation de marché) (see below).
If prosecuted by the PNF, an individual found guilty of market abuse may be sentenced by a criminal court to five years' imprisonment and a €100 million fine, or 10 times the amount of the profit realised. A corporation may be penalised with a €500 million fine, 10 times the amount of the profit realised, or 15% of its annual consolidated turnover. If prosecuted by the AMF, an individual does not face a prison sentence but may be sentenced to a €100 million fine or 10 times the amount of the profit realised. A corporation may be penalised with a €100 million fine, 10 times the amount of the profit realised, or 15% of its annual consolidated turnover.
Awareness of committing a violation is required to establish a criminal offence, but it is usually not required to establish an administrative offence. Attempted market abuse is punishable before both the criminal courts and the AMF Enforcement Committee.
- Accounting Fraud
Pursuant to Article L.242-6 of the French Commercial Code, directors may be criminally liable for falsifying financial statements. This offence is punishable by up to five years' imprisonment and a €375,000 fine.
Fraudulent management leading to bankruptcy is punishable by up to five years' imprisonment and a €75,000 fine (Article L.645-2 et seq. of the Commercial Code). Fraudulently organising one's insolvency in order to evade a criminal conviction or a civil sanction is punishable by up to three years' imprisonment and a €45,000 fine (Article 314-7 of the Criminal Code).
- Insider trading
The insider trading crime (délit d'initié), which can only be prosecuted by the PNF, is defined by Article L.465-1 of the CMF. The related administrative offence (manquement d'initié), to be prosecuted by the AMF, is defined by Article 8 of the EU market abuse regulation.
Insider trading is committed when a party deals – or recommends that another person deal – in securities on the basis of insider information, that is, information that is not publicly known and which would affect the price of the securities, if it were made public.
The regulation against insider trading applies to any person who possesses inside information as a result of their: (a) position as a member of the administrative, managerial or supervisory bodies of the issuer; (b) position in the capital of the issuer; (c) access to the information through the exercise of his or her employment, profession or duties; or (d) involvement in criminal activities. The prohibition also applies to any other person who possesses insider information under circumstances in which that person knows or ought to know that it is inside information.
For applicable sanctions, see above: "Securities fraud".
The misuse of corporate assets (abus de biens sociaux) is an offence that concerns corporate managers who directly or indirectly use corporate property for purposes which are inconsistent with the interests of the company they manage (Articles L.241-3 and L.242- 6 of the Commercial Code). It is punishable by five years' imprisonment and a fine of €375,000. If the offence was facilitated by foreign accounts, the offence is punishable by seven years' imprisonment and a fine of €500,000.
Breach of trust is an offence that consists of the misappropriation of funds or property, which were received based on an understanding that they would be handled in a certain way (Article 314-1 of the Criminal Code). This offence is punishable by three years' imprisonment and a fine of €375,000.
- Bribery of government officials
Both passive corruption and active corruption are unlawful under French law. Passive corruption occurs when a domestic or foreign public official unlawfully solicits or accepts a bribe, either directly or indirectly. Active corruption occurs when another person, either directly or indirectly, unlawfully induces, or attempts to induce, a domestic or foreign public official or private actor to accept a bribe (Articles 433-1 and 433-2 of the Criminal Code).
For individuals, bribery is punishable by up to 10 years' imprisonment and a fine of up to €1 million, or up to twice the amount gained in the commission of the offence. For companies, the fine is up to €5 million or up to 10 times the amount gained.
Influence peddling is also punishable under French law. This offence consists of the abuse of one's real or apparent influence with intent to obtain advantages, employment, contracts or any other favourable decision from a public authority or the government. It is punishable by five years' imprisonment and a fine of €500,000.
- Criminal anti-competition
Under French law, cartels are not criminal wrongdoings but are administrative offences (see below, "Cartels and other competition offences"). However, it is an ordinary crime (délit) for any individual – but not a corporate entity – to fraudulently participate personally and significantly in the conception, organisation, or implementation of a cartel (Article L.420-6 of the Commercial Code). The criminal sanction amounts to four years' imprisonment and a €75,000 fine.
Other anti-competitive practices may be criminally prosecuted: selling a product at a loss (revente à perte) is punishable by a €75,000 fine (Article 442-2 of the Commercial Code), and artificially modifying the price of goods and services (action illicite sur les prix) is punishable by two years' imprisonment and a €30,000 fine (Article 443-2 of the Commercial Code).
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