In the first conviction against a legal person by a French tribunal, the aerospace and defense group was fined 500,000€ for bribing foreign public officials. Two former Sagem managers who faced up to 18-month suspended prison sentences and a 15,000€ fine each, were acquitted. The public prosecutor had originally sought dismissal of the charges against Safran (30%-owned by the French State) but later did not make a formal request for sentencing at trial.
The Safran case has tested the resolve of the French judiciary to pursue not only individuals but companies for foreign bribery. Will the verdict be a prelude to greater enforcement activity in France? It may be too soon to tell, but the timing could not have been better: France's anti-corruption track record has been under scrutiny by the OECD's Working Group on Bribery which is due to announce its Phase 3 findings in October. Given the OECD's views on the critical importance of corporate liability in curbing the supply side of foreign bribery, that France has convicted a legal person for acts of corruption is significant.
Prior to the Safran decision, only three minor convictions for foreign bribery have been handed down since the adoption of France's foreign bribery law in June 2000 (compare to 42 for Germany). The OECD corruption watchdog is expected to lean heavily on France for its weak enforcement record and recommend reform such as independence of the public prosecutor, greater resources for the judiciary as well as higher and more dissuasive sanctions.
What does this mean for companies doing business in France? In an era where pressure is mounting on OECD member countries to pursue multinationals for foreign bribery through multilaterial action and international cooperation, it may be only a question of time that France demonstrates its commitment to fight corruption by practicing what it preaches in the law. In anticipation, companies under France's jurisidictional reach will want to review their anti-corruption compliance policies and procedures to ensure a culture of compliance throughout their global operations.
