What is Loi Sapin II?

‘Loi Sapin II’ is the colloquial name for France’s new anti-corruption legislation: “The Law on Transparency, the fight against corruption and the modernisation of economic life.”

And it’s due to have a big impact on whistleblower protection in France.

Whilst the CNIL single authorisation (AU 004) does provide a template for the information that can be processed as part of a whistleblowing system, before now there was no protection put in place for the whistleblower.

Loi Sapin II clearly aims to remedy this, implementing provisions to both the Penal and Labour codes to protect reporters from reprisals.

Loi Sapin II is important for businesses

Articles 8 and 17 of Loi Sapin II establish a requirement for companies to have a procedure in place to take employees’ reports about potential corruption or malpractice if they have:

  • a registered office in France
  • over 50 employees

If the company is part of a Group whose main offices are in France, and they have 500+ employees or a turnover of €100 million, a full whistleblowing program will be required.

There is no prescribed structure that companies have to adhere to, only a requirement that an internal warning system designed to allow the collection of alerts from employees is implemented.

The new French Anti-Corruption Agency will be responsible for monitoring compliance and can refer non-compliant companies to the Sanctions Committee.

The Committee can impose a monetary fine up to €200,000 for natural persons and €1million for legal persons. However the fine imposed will be proportionate to the seriousness of the breach and the financial situation of the company.

What other changes are being made under the new legislation?

Article 9 ensures strict confidentiality of the identity of the authors of the report, the person targeted by the report, and the information collected by all addressees of the report.

If breached, a fine of up to €30,000 and potential two-year imprisonment may be imposed for disclosure without consent.

Article 6 broadens the definition of a “whistleblower” which, in turn, broadens the potential scope for a reporter.

A whistleblower will be defined as a person who discloses, in a disinterested and bona fide manner:

  • a crime or offence
  • a breach or violation of an international undertaking, law or regulation
  • a serious threat to public interest and conduct contrary to the company’s code of conduct

As well as the new categories of scope afforded by the Act, Article 6 also strictly prohibits reports, in any form, covered by the secrecy of national defence, medical confidentiality or the secrecy relations between a lawyer and his client.

What else is covered by Loi Sapin II?

The Act does not make reference to CNIL’s AU-004, so it is likely that they will work concurrently.

The following issues will be accepted as part of the whistleblowing procedure:

  • financial
  • accounting
  • banking (including anti-corruption and anti-competitive practices)
  • health and safety
  • environmental protection
  • discrimination and harassment at work

Are there any issues with Loi Sapin II?

CNIL has not, at this time, expanded the Single Authorisation (AU 004) to include the Loi Sapin’s II amendments. There is some ambiguity as to whether the single authorisation will be amended or if companies will be required to apply for full authorisation.

If CNIL requires companies to obtain full authorisation for the Loi Sapin II amendments, this will increase implementation time, presenting a potential issue for enforcing the non-compliance regulations.

The Conseil d’Etat should be releasing further guidance on the implementation of Loi Sapin II in the near future which should address this issue.

You can find further guidance here.

Global reach of Loi Sapin II

An important feature of the new legislation is that it applies even for acts committed abroad by a French national, or by a person habitually resident or exercising all or part of his economic activity on French territory.

This deliberately broad term will circumvent the dual criminality requirement and allow prosecutors to pursue those who commit corruption abroad.

Other points to consider

As well as the whistleblowing procedure, Loi Sapin II adds several additional requirements with the aim of detecting and preventing corruption:

  • Companies will now be required to implement a code of conduct defining and illustrating the different types of behaviour to be avoided
  • Accounting control procedures are needed to ensure that records and accounts are free from corruption
  • Regularly updated documentation of risk mapping to identify, analyse and prioritize risks of corruption in the company and for the company’s customers and suppliers is required.

Whilst it remains to be seen how effective Loi Sapin II will be in practice, it is a clear step forward in the fight against corruption and a vast improvement for whistleblowing protection in France.

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