On December 9th, 2016, France officially enacted the Law on transparency, anti-corruption and economic modernization (so-called "Sapin II bill") which introduces the following key changes: 

• The creation of a national regulator to assist relevant authorities in preventing and detecting corruption - the Agence Française Anti-corruption (French Anticorruption Agency) (FAA). The FAA will have investigation powers and will be able to impose sanctions through its new sanction commission.
• An obligation upon French companies having 500 or more employees and a turnover above 100 million euros and any company belonging to French groups having 500 or more employees in total and a turnover above 100 million euros and their top management to implement anti-corruption compliance programs.
• The Sapin II bill lists 8 concrete measures: (i) a code of conduct, (ii) an internal alert system, (iii) a regularly updated risk mapping, (iv) due diligence and risk assessment procedures, (v) accounting control procedures, (vi) training programs, (vii) disciplinary sanction schemes and (viii) an internal system to control the implementation of these 7 measures.
• The obligation will apply to foreign subsidiaries of French groups meeting the two above mentioned criteria and French subsidiaries meeting these criteria, belonging to foreign groups.
• Failure to implement such anti-corruption program could lead to fines imposed by the FAA up to 1 million euros for the company and up to 200,000 euros for its legal representatives.
• The introduction of a French-style deferred prosecution agreement ("DPA") which will enable entities suspected of acts of corruption to enter into a criminal settlement with the French authorities, as long as prosecution has not been formally triggered.
• An extension of French authorities' power to prosecute and sanction acts of corruption committed outside of French territory.
• The strengthening of whistle-blower protection through the introduction of (i) a broad definition of whistle-blowers applicable to any fields, (ii) a structured procedure for whistle-blowers to raise alerts and (iii) a protective regime against retaliation from employers (including financial compensation in the event of litigation).

Timing: The companies subject to the new anticorruption obligation shall implement the above mentioned measures by 1 June 2017.

Next steps: The concrete implementation of the new obligation to prevent corruption is the most critical area of focus. First, foreign groups will need to determine entities that might be captured by this new obligation. Conducting an audit of current compliance programs within the group (if any) will be needed to define the practical steps to be taken to ensure conformity with the Sapin II bill. Eventually, necessary compliance programs will have to be implemented. In that regards, Orrick can offer the combination of French legal advice and the experience of US regulatory environment.