The legal framework for the fight against corruption: standards and institutions

The fight against corruption, once often confined to national borders and issues of public morality, has undergone profound change. Today, it is part of a dense, complex and resolutely international legal framework. Find out more at this arsenal of rules and the institutions that oversee their application has become essential, not only for lawyers, but also for any economic player keen to secure its activities and comply with its obligations. Standards no longer just come from Paris; they also emanate from Brussels, Geneva and New York.

In this article, we will explore this regulatory landscape. We begin by examining the major impetus provided by international and European organisations, which have largely shaped our current law. We will then look in detail at French legislation, whether contained in the Criminal Code or in more specific texts, including tax legislation. Finally, we will present the main institutional players, in France and abroad, whose role is essential in driving forward this fight against commercial corruption and making it effective.

The international and European foundations of the fight against corruption

The realisation that corruption knows no borders, particularly in a context of globalised trade, has led to a proliferation of international and European initiatives since the end of the 20th century. Although these texts vary in nature and scope, they have all helped to establish a global standard of probity in business.

The decisive impetus undoubtedly came from the Organisation for Economic Co-operation and Development (OECD). Its Convention on Combating Bribery of Foreign Public Officials in International Business Transactionssigned in 1997, marked a turning point. Strongly encouraged by the United States, it obliges signatory countries, including France, to make it a criminal offence to bribe a foreign civil servant in order to obtain a contract. It introduced key concepts: the need to punish so-called "foreign bribery", the criminal liability of companies (legal entities), and the broad definition of "undue advantage" (not just financial). One of its major innovations lies in its "peer review" mechanism: working groups regularly examine the legislation and practices of each member country, exerting constant pressure for improvement.

From a more universal perspective, the United Nations Convention against CorruptionThe Mérida Convention (2003) has broadened the geographical and thematic scope. While it incorporates the main principles of criminalisation, it places particular emphasis on prevention. It encourages governments to adopt transparent procedures for public procurement, to step up the fight against money laundering, and to facilitate international cooperation for the recovery of misappropriated assets. Removing obstacles linked to banking secrecy is also one of its objectives. A mechanism to monitor its effective application has also been put in place.

At European level, several texts coexist. L'European Union In 1997, the European Union adopted a convention aimed specifically at corruption involving Community or Member State officials. Later, a framework decision in 2003 played an important role in obliging Member States to make corruption a criminal offence in the context of the European Union's internal market. private sectorThe new law will set minimum sentencing standards and address the liability of legal persons and the rules of territorial jurisdiction.

Le Council of Europehas been particularly active, with two major agreements signed in 1999. The Criminal Law Convention on Corruption stresses the need for strong political commitment and increased international cooperation. The Convention was the first at European level to deal in detail with corruption in the private sector, in relation to business activity. It also set up the Group of States against Corruption (GRECO), responsible for monitoring the application of commitments by member countries. The Civil Law Convention on Corruptionwhich is highly innovative, obliges States to make provision in their domestic law for effective remedies for those who have suffered damage as a result of an act of corruption, including the possibility of obtaining damages. It enshrines the idea that corruption is not only a moral or criminal offence, but also a source of compensable economic loss.

French legislation

French corruption law is the product of a rich legislative history, marked by successive adaptations to international standards and domestic scandals. The result is a body of legislation that is sometimes scattered and not always coherent, but whose severity has increased over time.

Le Penal code is naturally at the heart of the repressive measures. The offences of bribery and trading in influence are treated differently depending on the players involved:

• Those committed by persons holding public office (passive corruption and influence peddling) are classified as "breaches of the duty of probity" (articles 432-11 et seq.).
• Those committed by private individuals (active bribery and trading in influence) are dealt with in a separate chapter (articles 433-1 et seq.).
• A specific chapter (articles 435-1 et seq.) is devoted to offences involving agents of the European Union, foreign States or public international organisations, directly transposing international and European commitments.
• Lastly, private bribery (active and passive), aimed at people who do not hold public office (company directors, employees, etc.), is covered by dedicated articles (445-1 et seq.), which are somewhat surprisingly included in a title on "breaches of public trust".

But the fight against corruption is not limited to the Criminal Code. Many external texts have been added to the system, often as a preventive measure or to target specific sectors. Examples include :

• The French Commercial Code, which makes it a punishable offence to monetise one's vote at shareholders' or bondholders' meetings.
• The Code de la construction et de l'habitation (Construction and Housing Code), which targets certain actions by the directors of HLM organisations.
• The Social Security Code, which governs relations between medical staff and drug manufacturers.

A key aspect is the taxation. For a long time, a certain tolerance prevailed regarding "commissions" paid to obtain contracts abroad, sometimes even tax deductible after passing through the "confessional" of the Ministry of Finance. Under the impetus of the OECD, this practice has ceased. Article 39, 2 bis of the General Tax Code now clearly states that sums paid to bribe a public official (French or foreign) with a view to obtaining or retaining an international contract are not deductible from profits. While the rule is morally indisputable, its application remains a challenge, given the fertile imagination that goes into disguising these payments and the intense pressure of international competition.

Lastly, a large part of France's legislative arsenal targets the prevention through transparency. Successive laws, such as the 1993 "Sapin 1" law on the prevention of corruption and the transparency of economic life, have strengthened requirements in areas deemed sensitive:

• Financing of election campaigns and political parties (Electoral Code).
• Procedures for awarding public contracts and public service delegations (Public Procurement Code).
• Town planning and commercial development, with, for example, the obligation for members of departmental commercial development commissions to declare their interests (article L. 751-3 of the French Commercial Code).
• More recently, the 2016 "Sapin 2" law introduced compliance obligations directly for businesses, marking a new stage in this preventive approach.

Institutional players in the fight against corruption

The existence of laws, even strict ones, is not enough to guarantee their effective application. The fight against corruption also relies on the action of dedicated institutions, which play a monitoring, advisory, control or advocacy role.

At international level, we have already mentioned the monitoring mechanisms of the OECD (Working Parties) and the Council of Europe (GRECO). These bodies play an essential peer review role. Their reports, which are often detailed, identify the strengths and weaknesses of national systems and make recommendations that encourage countries to improve their legislation and practices. They help to maintain constant pressure for compliance with international standards.

In France, the key institutional player today is theFrench Anti-Corruption Agency (AFA). Created by the Sapin II Act of 2016, its central mission is to prevent and help detect corruption, influence peddling, misappropriation of public funds and favouritism. It operates in both the public and private sectors. Its activities include :  

• A mission of advice It draws up recommendations to help companies and public authorities prevent and detect corruption. These recommendations, although not legally binding, define the good practice expected.
• A mission of control Anti-corruption compliance: the AFA checks, on its own initiative or at the request of the authorities, the effective implementation of the anti-corruption compliance programmes that certain companies are obliged to adopt (under article 17 of the Sapin II law). It may issue observations and injunctions following its inspections.

Other public institutions also contribute to the fight, such as the Haute Autorité pour la Transparence de la Vie Publique (HATVP) for public officials, and TRACFIN for the fight against money laundering, which is often linked to corruption. The judicial investigation services and specialised courts obviously play an essential repressive role.

Finally, we must not overlook the role of civil society and the private sector. From Non-Governmental Organisations (NGOs) such as Transparency International are very active in advocating reforms, raising public awareness and publishing corruption perception indices that have a strong media impact. At the same time, more and morecompanies are developing their own business ethics initiatives, adopting charters or codes of conduct. This internal awareness, encouraged by institutions and public pressure, is an essential complement to the legislative arsenal for establishing a genuine culture of integrity.

Navigating this complex legal and institutional landscape, understanding the standards applicable to your business sector and the expectations of authorities such as the AFA requires constant vigilance and up-to-date expertise. To assess the compliance of your activities or define a prevention strategy tailored to your specific risks, please contact our firm.

Sources

• Penal Code: articles 432-11 et seq., 433-1 et seq., 435-1 et seq., 445-1 et seq.
• General Tax Code: article 39, 2 bis
• French Commercial Code: article L. 751-3
• Law 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernisation of economic life (known as "Sapin II").
• OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997)  
• United Nations Convention against Corruption (2003)
• Council of Europe Criminal and Civil Law Conventions on Corruption (1999)
• Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector