March 22, 2020

Publications

Compliance and Extraterritoriality: a natural and effective couple for the future of Europe

by Marie-Anne Frison-Roche

ComplianceTech©. Pour lire ce document de travail en français, cliquer sur le drapeau français

This working paper is the basis for an article in the French Law Journal Le Clunet.

 

When we compare the terms "Compliance" and "Extraterritoriality", it is often with dissatisfaction, even anger and indignation. On the momentum, after having expressed a principle of disapproval of such a merger, attention is focused on how we can fight against it, to break the link between Compliance and Extraterritoriality. But do we have to go so fast? Is this negative initial assessment correct?

Indeed, thus gone, it is frequently explained that the binding mechanisms of Compliance are suffered, that they come from abroad!footnote-1750, that they apply with efficiency but in an illegitimate way, without agreement of the one who must submit to it, whose resistance is therefore certainly ineffective but nevertheless justified. In the same spirit, when we start to shell the cases, like so many scars, sort of rosary, even crown of thorns, BNPP case!footnote-1718, Astom case!footnote-1717, etc., the wounds not yet closed turn into reproaches made against the rules, public authorities, even reproaches made against named people.

We are leaving this kind of complaint against X, which targets what would be this appalling "Compliance", this Law which would be both hostile and mechanical which would not have been able to stay within the limits of borders, Compliance being thus placed in contrast to sovereignty and protection, which presuppose staying within its limits!footnote-1716 and being able to protect companies from abroad. More concretely, this presentation targets more directly the United States, which uses "the legal weapon", slipped under what is then designated as "the artifice of the Law" with extraterritorial scope. But this effect would in reality be the very object of the whole: their hegemonic will to better organize at least a global racket, notably through the Foreign Corrupt Practices Act (FCPA) and at best a world government through notably the embargoes.Those who believed otherwise would be naive or foolish. This silences the opponents because who likes this costume? So the world would be put in a ruled cut; what the mafia could not have done, Compliance Law would have obtained, offering the whole world to the United States thanks to the extraterritoriality of its national Law.

Compliance Law would thus become the very negation of Law, since it has the effect, even the purpose (barely concealed by strategic, powerful and shameless States), of counting borders for nothing, whereas Public International Law, in that it is built between the sovereign subjects of law that are the States presupposes the primary respect for borders to better exceed them while Private International Law takes the same postulate to better welcome foreign Law in situations presenting a foreign element!footnote-1726. Jurists believed in the force of Law; by Compliance, we would return to the sad reality that only the powerful, here the United States, dominate and - ironically - it is under the pretext of Law that they do it. It would be necessary to be well duped, or accomplice, to see there still legal where there is only the balance of powers. When one is more intelligent or skilful than that, one understands that the "small" can only be "subject" to the Compliance Law, one would have to be powerful to be the normative source and its enforcement agent. It is then towards this mis-named Department of Justice (DoJ) that the fearful, hateful and resigned glances turn. 

If you see it that way, what should you do then? The answer is obvious: react!

It is necessary to save the sovereignty, France, companies, the Law itself. If that is how the question is posed, how can we disagree? It is therefore necessary to destroy the Compliance Law and the extra-territoriality of American Law which had found this "Trojan horse", an expression so frequently used. This is the basis for the administrative reports available, for example the Berger-Lellouche!footnote-1719 parliamentary reports and the Gauvainfootnote-1720 report. Both of them broadly develop the two preceding claims, namely that the extra-priority of compliance mechanisms is illegitimate and harmful, since it is a mechanism invented by the Americans and harming the Europeans, or even invented by the Americans to harm Europeans, the description being made in much more violent terms than those used here. The description seems acquired, the reflections therefore relate to the remedies. The reaction is most often to "block" the Compliance Law in its extraterritorial effect.

But without discussing the effectiveness of the remedies proposed downstream, it is necessary to return to this description so widely shared made upstream. Because many elements on the contrary lead to affirm that ComplianceLaw first of all and by nature can only be extraterritorial and that it must be. Whether or not the State in which it was created has malicious intentions. The description which is made to us most often describes particular cases from which we draw generalities, but we cannot reduce Compliance Law to the already cooled cases, as BNPP case, or to the always hot case of the American embargo on Iran. Furthermore, one cannot take the issue of embargoes and draw conclusions, legitimate for it, but which would apply to the whole of Compliance Law. The fact that theCompliance Law is a branch of Law at the stage still of emergence can lead to this confusion which consists in taking the part for the whole, but it is very regrettable because what is justified for the embargoes does not is in no way relevant for all Compliance Law, of which precisely the Law of embargoes is only a small part, even an abusive use. This overlapping is not often perceived, because the definition of Compliance Law and its criterion are not clearly enough defined, namely the existence of a "monumental goal"!footnote-1725, which does not exist in an embargo decided unilaterally by an order decreed by the President of the United States, but which exists in all other cases and fully justifies extraterritoriality, extraterritoriality which is even consubstantial with Compliance Law (I).

Once we have distinguished the embargoes, as an atypical, sometimes even illegitimate part, of Compliance Law, we should continue this work of distinction by emphasizing that the United States has certainly invented Compliance Law!footnote-1721 but only developed a mechanical concept for the prevention and management of systemic risks. Europe has taken up this systemic conception of the protection of systems, for example financial or banking, but superimposed another conception, drawing on its deep humanist tradition!footnote-1722, whose protection of personal data is only an example and whose monumental goal is the protection of the human being. This primary concern then justifies the European use of Compliance mechanisms to interfere with global objects regardless of their location, especially the environment, and to block the entry onto the ground of objects that enter, which is contrary to Competition Law but builds a legitimate barrier under this Compliance Law, in the indifference of an extraterritorial origin (II).

Indeed, this branch of the new Law which is Compliance Law is not reducible to Competition Law!footnote-1723, any more than it is not reducible to a method. It is a substantial, extraterritorial Law because the "monumental goals" which give it substantial unity are extraterritorial. This can directly contribute to the future of a Europe which on the one hand will be able to pursue, in an extraterritorial manner, monumental humanist goals, in the field of the environment or the protection of personal information or access to the Law (in particular by the technique of compliance programs) and which, on the other hand, by the techniques of traceability of products!footnote-1724, will have the means not to bring in products manufactured in an indecent manner, except in countries which do not grant value than in Competition Law to enter the WTO.

 

 

Read the developments below.

 

1

What we almost always start with, Compliance Law being "strange" especially because it comes from the United States, v. Frison-Roche, M.-A., Compliance Law, 2016. 

2

V. par ex. Monéger, cas BNPP, ...., in Frison-Roche, M.-A. (dir)., ...

3

V. for ex. Bismuth, R. For a nuanced understanding of the extraterritoriality of American law - some reflections around the procedures and sanctions targeting Alstom and BNP Paris, 2015.

4

On the definition of sovereignty as the ability to understand its limits and to remain within its limits, even to establish them yourself, sovereignty being intimate with the idea of ​​the rule of law, v. Supiot, A., (dir.), Mondialisation ou globalisation ? Les leçons de Simone Weil, coll. "conférences", ed. Collège de France, 233 p.

5

To recall these basic elements and put them into perspective in relation to Compliance Law, v. Frison-Roche, M.-A. La partie et le tout : l'Amazonie relève de quoi ? Pour le Brésil et les Etats-Unis, de la "partie" ; pour la France du "Tout". Tout l'enjeu est là, 2019. 

6

Berger Karine, Lellouche Pierre, Rapport d'information sur l'extrateritorialité de la législation américaine, hand out to the Presidency of l'Assemblée Nationale on 5th of October 2016

7

Gauvain, R., Rétablir la souveraineté de la France et de l'Europe et protéger nos entreprises des lois et mesures à portée extraterritoriale, Rapport à la demande du Premier Ministre Monsieur Edouard Philippe, Assemblée nationale, juin 2019, 102 p.

8

Criterium found in 2016 : Frison-Roche, M.-A., Le Droit de la Compliance

9

Frison-Roche, M.-A., Compliance : before, now and after, 2017. 

12

On the links between Compliance Law and blockchain technology, v. ....

I. MONUMENTAL GOALS: DEFINING THE LAW OF COMPLIANCE, INVOLVING ITS EXTRATERRITORIAL SCOPE

sss

A. THE DEFINITION OF "MONUMENTAL PURPOSE" AND ITS CONSUBSTANTIALLY EXTRATERRITORIAL APPLICATION

S

1. The substantial definition of Compliance Law through its "monumental goals"

In a first conception!footnote-1746, Compliance consists in increasing the effectiveness and the efficiency of the rules which one regrets the too great ignorance by the actors and the slowness of sanction in Ex Post: it consists then in the obligation made operators to show the application of these rules. This application is certainly spontaneous, since Compliance has points of contact with ethics and reputation!footnote-1768, but this effectiveness is nevertheless compulsory, which nevertheless justifies repression!footnote-1766. The transformation is already great, especially in that it gives rise to a structural repressive right!footnote-1747. But if it is only that, then Compliance is a method and falls under procedural law.

In a second conception, highly substantial and justifying alone that Compliance constitutes an autonomous branch of Law, "Compliance Law"!footnote-1748, it finds its specificity and its autonomy in "monumental goals". This expression was proposed in 2016!footnote-1767. In a Law of teleological nature, Public Authorities affirm that goals must be achieved, such as the fight against global warming or equality between men and women or the fight against corruption or the prevention of market failures. In this respect, Compliance Law is akin to Regulatory Law, which is itself teleological and in principle!footnote-1769.

These goals are stated as first and essential, but they are not achieved, either by force of circumstances or by force of the State. In this, the substantial specificity of Compliance Law appears, both in relation to Competition Law (which it opposes) and in relation to Regulatory Law (which it extends).

Indeed, were not made in themselves. Thus the "principle of competition" is certainly first, since it suffices in Competition Law to make the market work, but it is not "monumental" since freedom of contract and the right of property are enough to make it work . The aims of the Compliance Law are "monumental" in that simple and general mechanisms such as the contract and property are not enough: a whole arsenal of specific laws, Supervisory Authority, secondary principles and of Ex Ante decisions to claim to reach them. In this respect the Law of Compliance is an extension of the Law of Regulation, which also supports the monumental "claim"!footnote-1749 to achieve objectives that some seek as constituting "the general interest".

2. The consubstantially extraterritorial scope of the substantive Compliance Law

ss

B. THE CONCRETE AND SIMPLE CRITERIA OF LEGITIMATE AND ILLEGITIMATE EXTRATERRITORIALITY OF THE LAW OF THE COMPLIANCE

1. The

II. THE DIVERSITY OF MONUMENTAL GOALS ACCORDING TO THE AREAS

A. SYSTEMIC US LAW OF COMPLIANCE

B. CHINESE LAW

III. THE CLAIM OF THE MONUMENTAL GOAL THROUGH EMERGENCY COMPLIANCE LAW BY THE STRENGTH OF A SOVEREIGN EUROPE

 

1

V. par ex. Garapon, A. et Servan-Schreiber, P., Deals de justice, 

2

In mechanisms which are therefore also largely a matter of "conviction", the lawyer therefore has a major role, including outside all litigation relating to sanctions. V. Frison-Roche, M.-A., The attorney, vector of conviction in the new compliance system, 2020.

4

Marin, J.-Cl., ....

5

Frison-Roche, M.-A., Le Droit de la Compliance, 2016. 

6

Frison-Roche, M.-A., Le Droit de la Compliance, 2016. 

7

A principle is what is said to be respected in a primary way. This is why it is public, even political, authorities which have the vocation to express them. This distinction between the principles, whose enactment is the prerogative of the Political, and the technical modalities which imply the enactment of general technical rules which can be taken by non-political bodies, is a central issue in Regulatory Law , since it fixes the border between the Governments and the Regulatory Authorities.

It is very difficult to operate because the distinction between a political principle and a technical principle is often arbitrary (for example on which side does "net neutrality" lean?

We find the same relevance and the same difficulty in Compliance Law. It is effectively up to public and political authorities to set monumental goals, companies being able to remain neutral, to converge or to take them on their own account, but being unable neither to counter them nor (and therein lies the issue). 'others independently. But de facto large companies occupy this normative space, so much so that Gunther Tubner could qualify them as "global neo-constituents" ... The difficulty is further increased by the fact that the distinction is no longer here between "political principle" and "technical principle", but rather between "political principle" and "ethical principle". For example if a company decides to engage in the education of girls, is it a political principle or an ethical principle?

8

On the notion of "pretension" in Regulatory Law, and in Compliance Law, in particular in that they face the natural phenomenon of "globalization", v. Frison-Roche, M.-A., Le Droit face à la Mondialisation, 2017. 

comments are disabled for this article