Public Interest Judicial Agreement guidelines published by France's financial prosecutor

The French National Financial Prosecutor's Office (Parquet National Financier (PNF) published new guidelines in February 16, 2023 relating to the Public Interest Judicial Agreement (Convention Judiciaire d’Intérêt Public) (CJIP).

Guidelines updated

In 2019, the PNF published guidelines with the French Anti-Corruption Agency (Agence Française Anticorruption).

The PNF intended to provide more readability, transparency and predictability to practitioners and companies with an update of its guidelines after three years of practice and the conclusion of 14 new CJIP.

What were the main lessons learnt?

Good faith as a determining criterion

While there are no prior conditions required to access a CJIP, the PNF makes the criterion of good faith a determinant factor in the choice of a CJIP.

The PNF assesses this criterion on the basis of the company's cooperation, which is characterised by its active participation in the determination of the truth through an internal investigation of the facts and of the persons involved and, where applicable, of the inefficiency of the compliance programme.

In addition, the PNF takes into consideration the adoption of enforcement measures to strengthen the compliance programme, the adaptation of the company's strategy to the identified risks.

Confidentiality of exchanges

One of the sensitive issue in the implementation of the CJIP remains confidentiality of the exchanges and elements communicated by the public prosecutor.

The PNF draws a distinction between prior informal discussions, which are not confidential, and the "formalized" procedure, which is confidential, based on article 41-1-2 III of the French Code of Criminal Procedure (Code de procedure pénale).

Consequently, the information and documents exchanged during the informal period might be used if negotiations fail.

Furthermore, the new guidelines do not clearly identify when discussions become “formalised”.

However, the PNF states that oral exchanges can be conducted under “the faith of the court” (la foi du palais). The faith of the court is an unwritten rule, which aims to protect informal discussion within the justice professional community (in particular, discussions between lawyers, judges and prosecutors). It also states that evidence obtained during the investigation through requisitions or seizures will remain admissible in the procedure.

Calculation of the fine

The maximum amount of the public interest fine is set at 30% of the average annual turnover over the last three years.

The new guidelines allow the PNF to take into account the consolidated turnover of the group to which the accused company belongs. Thus, it seems that the PNF reserves a tough treatment for large groups.

This fine is based on two grounds: a "restitutive" one, which is equal to the amount of the benefits resulting from the breaches, and a "punitive" one, which is calculated by applying to the first amount a multiplier determined by increasing or decreasing factors, each with its own ceiling.

The increasing factors are: any obstruction of the investigation, the size of the company, the weakness of the compliance programme, the repeated nature of the acts, the judicial, fiscal or regulatory history, the use of the resources of the legal person to conceal, the creation of tools to conceal, the participation of a public official and the serious disruption of the public order.

The decreasing factors are: spontaneous disclosure, single occurrence, relevance of internal investigations, active cooperation, coercive measures, effectiveness of the internal alert system, non-equivocal recognition of the facts, prior compensation of victims.

These quantified indicators give companies more predictability on the minimum and maximum levels in the calculation of fines.

The 'non bis idem' effect

The PNF stands as a defender of the “non bis in idem” principle in the international order.

In the event of subsequent requests from foreign authorities, the PNF might require to collaborate under condition that the foreign authority's undertakes not to initiate new proceedings against the legal entity for the same facts.

The individuals

The guidelines have not changed the sole applicability of the CJIP to legal persons.

However, the PNF indicates that a "simultaneous and joint settlement" of the situation of the legal entity and the individual would be preferred when relevant.

The guilty plea proceedings might be used (Comparution sur Reconnaissance Préalable de Culpabilité) (CRPC).

However, the PNF indicates that "the good faith of the company in the negotiation of the CJIP is assessed in particular on the basis of its ability to conduct an internal investigation to identify the main individuals involved in the facts and to reveal them to the public prosecutor's office during the investigations and negotiations”.

The PNF is, therefore, encouraging legal entities to report their directors or employee’s misbehaviours, without any guarantee that a CRPC would be offered and accepted for directors.

The new guidelines therefore do not settle the issue of the potential conflict of interest, which arises from the fact that an executive may be reluctant to disclose corporate misconduct if he or she is at risk of being prosecuted, and if documents may be used against him or her before criminal court at later stage.

Osborne Clarke comment

The new guidelines provide more readability, transparency and predictability on the access, the negotiation and the conclusion of a CJIP, which is what the protagonists were waiting for.

We recommend continuous update of the Sapin 2 law programme, when relevant, and an efficient update and management of internal investigations alert systems in order to assess the relevancy of entering into negotiations with the French prosecutor, bearing in mind that the “informal” period is a high-risk period in terms of confidentiality and documents exchanged with the PNF.