Commercial corruption... The term often conjures up images of high-profile financial scandals involving major companies or political figures. Yet this phenomenon is not confined to the headlines. It represents a very real, albeit often insidious, risk for businesses of all sizes, including SMEs and sole traders. As well as undermining public morality, corruption corrodes the economy by distorting competition and destroying confidence. But what exactly does this concept mean in legal terms? And how can it be distinguished from other commercial practices that may be borderline but are legal?
This article aims to clarify what commercial corruption is, by exploring its fundamental mechanisms - in particular the famous 'pact' between the bribe giver and the bribe taker - and by differentiating it from influence peddling. We will also look at two specific offences that are often encountered in business life: the offence of favouritism, which affects equal access to public contracts, and the offence of illegal taking of interests, which aims to prevent conflicts of interest among those who hold a measure of authority. Understanding these qualifications is an essential first step in identifying risks and securing your activities. For a more complete analysis of legal and institutional framework Our dedicated article goes into more detail on this subject and the applicable legislation.
Bribery and influence peddling: an illegal agreement
At the heart of corruption is a simple but devastating idea: the exchange of an advantage for an unfair action (or inaction). This usually involves two protagonists: the briber and the bribed. The first seeks to obtain something that it could not, or should not, obtain through normal channels: a contract, an authorisation, preferential treatment, etc. The second, in a position to influence the desired decision, agrees to pay for its position or influence.
What characterises this exchange is the "corruption pact", even if this term has no legal value of its own. It is the agreement, explicit or tacit, by which a person offers, solicits or accepts an undue advantage in exchange for an act or abstention falling within the scope of the function or facilitated by it. It is important to note that the offence can be constituted as early as the simple proposal or solicitation, even if the other party refuses or if the hoped-for advantage is not ultimately obtained. The law targets both the intention and the dishonest approach itself.
The players in this pact have complementary motivations. The briber is the person who takes the initiative in offering the advantage (active bribery). The bribe-taker is the person who requests or accepts the advantage in order to act against his or her duties or abuse his or her power (passive corruption). In practice, the distinction can be blurred, as the initiative may be shared or difficult to determine. What is essential is that both parties are aware of the illicit nature of the proposed exchange.
But what is meant by "undue advantage"? The law refers to"offers, promises, gifts, presents or benefits of any kind".. Case law shows an impressive diversity: it can range from sums of cash, of course, to valuable gifts, luxury trips, the provision of a flat, preferential rates on goods or services, or even the promise of a job for a close friend. The form is irrelevant, as long as the advantage is offered or received with the aim of obtaining the unfair act. It should also be noted that the advantage need not benefit the bribe-taker directly; it may be intended for a third party (a family member, a political party, etc.). The absence of personal enrichment on the part of the bribe-taker does not therefore prevent the act from being classified as corruption.
Alongside "direct" corruption, where the bribe-taker carries out the expected act himself, there is influence peddling. Here, the person solicited (the "influence peddler") does not necessarily carry out the final act himself, but he will abuse its real or supposed influence to a public authority or administration in order to obtain a favourable decision for the person paying the bribe: an honour, a job, a public contract, an authorisation, etc., as specified in articles 433-1 and 433-2 of the French Criminal Code.
The dividing line between lobbying and normal business networking may seem a fine one. After all, what could be more normal than trying to convince a decision-maker by using his or her contacts? The fundamental difference lies in the abuse and the hidden quid pro quo. Influence peddling implies that influence is bought in order to obtain a decision. favourableThis is often contrary to the general interest or to fairness, and this influence is used improperly, outside the normal framework of persuasion or representation of interests. Proving this abuse can be complex, but it is the existence of this hidden remuneration in exchange for intercession that constitutes the offence. But where does legitimate business networking end and reprehensible influence peddling begin? The question is a delicate one, and will often depend on concrete circumstances and proof of criminal intent. To explore in detail the criminal sanctions, legal proceedings and compliance obligations that arise from these acts, our article on crackdown on commercial corruption provides all the necessary details.
Similar conduct: when the law targets specific types of behaviour
In addition to corruption and influence peddling in the strict sense of the term, the French legislator has specifically identified and criminalised certain types of behaviour which, by their very nature, seriously undermine probity and fairness in sensitive areas. These offences, although distinct, are often linked to corruption or conflicts of interest. Two of them are particularly relevant in the commercial context: the offence of favouritism and illegal taking of interest.
The offence of favouritism: protecting equality in public contracts
Access to public contracts and public service delegations is a major economic challenge, particularly for small and medium-sized enterprises. To guarantee healthy competition and equal opportunities between candidates, advertising and competitive tendering procedures are required by law. The offence of favouritism, provided for in article 432-14 of the French Criminal Code, punishes those who circumvent these rules.
In concrete terms, this offence refers to the fact that a person invested with public authority (elected representative, civil servant, etc.) or acting on their behalf, commits "procuring or attempting to procure for another person an unjustified advantage by an act contrary to the legislative or regulatory provisions intended to guarantee freedom of access and equality of candidates".. This is not necessarily a direct bribe, but rather a manipulation of public procurement rules to benefit a pre-selected candidate.
The forms that favouritism can take are varied: definition of an excessively specific need in the specifications so that only one company can meet it, communication of privileged information to a candidate before publication of the invitation to tender, exclusive negotiations with a single candidate when the procedure does not allow this, selection criteria that are biased or applied in a one-sided manner, etc. The objective is always the same: to distort competition to the advantage of a particular player. For a company that is unfairly excluded, the consequences can be significant. The offence of favouritism is designed precisely to prevent and punish such breaches of fairness.
Illegal taking of interest: avoiding conflicts of interest for public officials
How can we ensure that a decision taken by a person holding public authority is taken in the general interest and not in his or her own personal interest? This is the objective of the offence of illegal interest-taking, sometimes also referred to as the "offence of interference", defined principally in article 432-12 of the French Penal Code.
This offence is punishable by law if a person acting on behalf of a public authority, entrusted with a public service mission or invested with a public elective mandate "take, receive or retain, directly or indirectly, any interest whatsoever in an undertaking or transaction in respect of which, at the time of the act, it is wholly or partly responsible for overseeing, administering, liquidating or paying".. The main idea is to prevent one person from being judge and jury. It's a bit like being both player and referee in the same match: the suspicion of bias is too strong.
The situations covered are numerous. Imagine a mayor who takes part in the town council's deliberations on the local town planning scheme that makes a plot of land belonging to him or her suitable for building, or a civil servant in charge of overseeing a company who agrees to hold shares in it. The interest may be material (financial, property) or moral (family ties with the director of the company concerned, for example). The law is broad and speaks of "any interest", and it is not even necessary for the public official to have actually benefited from the situation or for the transaction to have been disadvantageous for the administration. The mere existence of a conflict of interest is sufficient to constitute an offence.
However, the legislator has provided for some flexibility, particularly for elected representatives of small municipalities (with fewer than 3,500 inhabitants) in very specific cases (acquisition of land to build a house, renting of municipal housing, etc.). In addition, article 432-13 of the French Criminal Code specifically regulates the situation of public officials who leave office ("pantouflage"): they may not take an interest (through work, consultancy or capital) in a company that they have supervised or with which they have concluded contracts for a period of three years after leaving office. This rule is designed to prevent civil servants from "preparing their exit" by being complacent with a future host company.
The precise legal classification of these acts - corruption, influence peddling, favouritism, illegal interest-taking - is essential as it determines the liabilities incurred and the penalties applicable. The boundaries can sometimes seem blurred to a non-expert. If you have any doubts about a situation you are facing, or if you want to ensure the security of your business practices and your relations with the public sector, we can help. can help you in the analysis and prevention of these risks. For an even more practical approach and the implementation of prevention and detection strategies, consult our a practical guide to protecting your business against corruption.
Sources
- Penal Code: articles 432-11, 432-12, 432-13, 432-14, 433-1, 433-2
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