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Compliance Law, like Regulatory Law, of which it is an extension, is an Ex Ante Law.
It translates into a set of obligations that companies must perform to ensure that harmful behavior does not occur, such as bribery, money laundering, pollution, etc.
This results in "structural" obligations, such as the establishment of a risk map, a third-party vigilance system, internal controls, the adoption of codes.
The practical question that arises is whether to punish a company, it is necessary but it is sufficient that the company has not adopted these structural measures, or if it is also necessary that within it or through the persons whom it must be accountable (through the corporate officers and the employees, but also the suppliers, the sub-contractors, the financed operators, etc.) there were behaviors that Compliance Law prohibits, for example corruption, money laundering, pollution, safety-related accident, etc.
The question is probative. Its practical stake is considerable.
Because to obtain the conviction the prosecuting authority will have to demonstrate not only a failure in the structural device but also a behavioral failure.
Si l'on considère que le Droit de la Compliance est à la fois sur l'Ex Ante et sur l'Ex Post, alors l'autorité de poursuite qui requiert une sanction doit démontrer qu'il y a un comportement reprochable (Ex Post) et qu'à cela correspond une défaillance structurelle (par exemple le compte bancaire anormal n'a pas été signalé) ; si l'on considère que le Droit de la Compliance est purement en Ex Ante, alors même s'il n'y a pas de comportement reprochable en Ex Post, la seule défaillance structurelle suffit pour que l'entreprise qui doit l'organiser en son sein soit sanctionné.
If we consider that Compliance Law is both on the Ex Ante and the Ex Post, then the prosecuting authority that requires a sanction must show that there is a reprehensible behavior (Ex Post ) and that this corresponds to a structural failure (for example the abnormal bank account has not been reported); if we consider that Compliance Law is purely Ex Ante, then even if there is no reprehensible behavior in Ex Post, the only structural failure is enough for the company to be sanctioned, even if it does its best efforts, even if no prohibited behavior will have accured in Ex Post.
The second system, which is much more repressive and places a considerable burden on companies, even if there is no proven illicit behavior, is that of French Law, probably because of a tendency towards Ex Ante organization. ..
Mais il faut garder mesure. Et cette mesure est probatoire.
But we must keep measure. And this measure is probative.
This is what the Commission des Sanctions of the Agence Française Anticorruption -AFA (French Anti-Corruption Agency's Sanctions Committee) has just said, in its decision of 4 July 2019, SAS S. et Madame C.,(written in French) contradicting the position of its director, who acted as the prosecuting authority. This is yet another general proof of the autonomy of the Sanctions Committee vis-à-vis to the Administrative Authority of which it is a part, and in relation to its director, who nevertheless governs it. But, jurisdictional model obliges, he has here the status of prosecuting authority, is subject to the regime of this one and not to the regime of head of the entity. Demonstration of the "functional autonomy" of the sanctioning bodies within the administrative regulatory and compliance authorities.
Indeed, this important decision expresses with precision and reason the distribution of the "burden of the allegation" and the "burden of proof" on the prosecuting body and on the company pursued, as well as the role of presumption that the recommendations issued by the French Anti-corruption Authority can play.
Read the analysis below.
During the time of the search for evidence by the services of the Agence Française Anticorruption - AFA French Anti-Corruption Agency), the company had articulated many means to resist the notification of the grievances that had made against it the Director of the AFA, greifs the legality of offenses and penalties as well as the rights of the defense. But in the name of the notion of "utility" and effectiveness, these were not retained by the Sanctions Committee.
Indeed, in general terms, procedural principles have been very "relaxed" in the name of the principle of efficiency. Lawyers sometimes find a Constitutional Court to hear their complaints, but the organs of repression prefer to arbitrate on the side of the effectiveness than on the side of fundamental guarantees. All companies do not have the chance of EADS which obtained the cancellation of the sanction because the violation of the principle Non bis in idem.
But it is about the evidentiary system that the Sanctions Commission refused to follow the Director of the AFA, this director being the prosecuting authority in the procedure before the Sanction Committee of the French Anticorruption Agency. Moreover, the Commission considers that this is based on a "substantive analysis", which shows that the evidence is more substantive than just procedural, since it involves introducing facts into the repressive qualifications required for the sanction provided by the texts.
And even if the evidence is free for the means of proof, the system of the charges of proof is imposed by the Law. However, who bears the burden of proof also endures the risk, since in the end if we do not know the fact, we must not win the case. In addition, the burden of proof always begins to weigh on the prosecuting authority, never on the prosecuted. It is so often forgotten in Regulatory Law and Compliance Law, in spite of the repressive dimension of these and the interference of the presumption of innocence, a fundamental rule which blocks on the shoulders of the prosecuting Authority this burden of proof, we are astonished to find in this decision of 4 July 2019 this elementary reminder.
Indeed, the Sanctions Commission starts with the fact that Article 17 of the French law so-called "Sapin 2" law obliges the companies to establish numerous Compliance tools: risk mapping, internal audit, control, etc. But the decision recalls that "il incombe au directeur de l'Agence qui propose l'application de mesures revêtant un caractère de sanction de constater le manquement qu'il invoque" (It is incumbent upon the Director of the Agency proposing the application of measures of a sanctioning nature to establish the breach he alleges!footnote-126).
It is therefore on the prosecuting authority that the weight is put.
But, to use the distinction made by the French author Motulsky, and commonly applied for example in Competition Law, the Director does not have to prove the reality of the facts he invokes, but only their plausibility. In this sense, he does not support a "burden of proof", but only a "charge of allegation". The Sanction Commisson said as follows: ""Lorsque l’exercice de ses pouvoirs de contrôle lui ont permis de réunir des éléments rendant vraisemblable un manquement aux obligations, énumérées par les dispositions citées ci-dessus du II de l’article 17, d’une personne à laquelle ces obligations s’imposent, il appartient à celle-ci, spontanément ou en réponse aux sollicitations de l’Agence, d’apporter les éléments dont elle est seule à disposer permettant de déterminer si elle s’acquitte des obligations qui sont les siennes et qui sont de nature à mettre l’Agence à même, à l’issue de ses contrôles, comme il est dit au dernier alinéa du 3° de l’article 3, d’apprécier la qualité..." of all the tools put in place (When the exercise of its supervisory powers enabled it to gather evidence that a breach of the obligations listed in the above-mentioned provisions of Article 17 (II), 'a person to whom these obligations are binding, it is up to the latter, spontaneously or in response to requests from the Agency, to provide the elements which it alone has at its disposal in order to determine whether it is fulfilling its obligations which are his own and which are likely to put the Agency, following its controls, as stated in the last paragraph of 3 ° of Article 3, to assess the quality ...) of all the tools in place.
Thus, if a likelihood of failure is articulated by the Agency, the Director may charge the company what is this time a real "burden of proof", namely the charge to prove the existence of tools, which are ""effectivement pertinent et de qualité" (effectively relevant and of quality", terms using by the law "Sapin 2" itself et repeating by the Sanction Commission in its decision.
However, in this case when the company, during the investigation showed all that it had done, it was not enough to convince the Director, who said he was not convinced.
But the Sanctions Commission notes that " la personne mise en cause a suivi à cet égard, en tout point, la méthode préconisée par l’Agence elle-même dans ses Recommandations" (the defendant followed in this respect, in every aspect, the method advocated by the Agency itself in its Recommendations). It concludes that the company ""doit être regardée comme apportant des éléments suffisants, sauf à l’Agence à démontrer qu’elle n’a pas, en réalité, suivi les Recommandations." (must be regarded as providing sufficient evidence, except for the Agency to demonstrate that it has not, in fact, followed the Recommendations.).
The Sanctions Commission goes further, for the safety of all companies, by taking another case than the one before it: the one where the company does not follow the recommendations.
It begins by recalling that the company "en a le droit dès lors que les Recommandations ne constituent qu’un référentiel dont l’usage n’est en rien obligatoire" (has the right since the Recommendations are only a repository whose use is in no way mandatory).
If the company chooses not to follow the repository, the consequence is simple. In case of control, if the AFA satisfies its allegation burden, that is to say, it provides a "likelihood of breach", then if the company wants to escape a sanction and may not claim to behave in line with the recommendations of the Agency, "il lui incombe de démontrer la pertinence, la qualité et l’effectivité du dispositif de détection et de prévention de la corruption en justifiant de la validité de la méthode qu’elle a librement choisie et suivie." (it is incumbent upon it to demonstrate the relevance, quality and effectiveness of the detection and prevention of corruption by justifying the validity of the method it has freely chosen and followed.).
We could not say better, more classically and more finely.
In the present case, however, on the grounds of the corruption risk mapping grievance, the Sanctions Commission lists the cumulative and successive proceedings of the company and notes that, since the beginning of the procedure, it has taken care to follow the recommendations published by the Agency. This does not allow the Director to claim to transform his allegations into evidence and to obtain from the Sanctions Commission the pronouncement of injunctions he seeks.
The Commission stresses that the company "n’était pas tenue de suivre la méthodologie préconisée dans les Recommandations éditées par l’Agence, au demeurant postérieurement au contrôle" (was not obliged to follow the methodology recommended in the Recommendations published by the Agency...) and that the company bears the burden of destroying the likelihood of breach "en justifiant de la pertinence, de la qualité et de l’effectivité" des dispositifs "qu’il lui incombe de mettre en place" (by justifying the relevance, quality and effectiveness of the compliance devices it is incumbent on it to put in place).
But by following all of the recommendations, the company has managed to reverse the burden of proof and the Sanctions Commission comes to the conclusion that "les faits et critiques sur lesquels le directeur de l’Agence s’appuie pour qualifier le manquement de ne pas avoir établi une cartographie des risques de corruption conforme aux prescriptions légales ne sont pas suffisants pour permettre à la commission des sanctions de constater un tel manquement." (the facts and criticisms on which the Director of the Agency relies to qualify the failure not to have established a mapping of the risks of corruption in accordance with the legal requirements are not sufficient to allow the sanctions commission to qualify such a breach).
On the Code of Conduct, the analysis conducted by the Sanctions Commission is even more direct. It finds that the company has deployed it in such a way as to obtain a change in "behavior" and that it constitutes a "effet réel" (real effort) to fight against corruption. As such, the likelihood of breach is therefore broken by the company, which can not be sanctioned.
The evaluation procedures of third parties (customers and suppliers) as well as the accounting audits appear to the Commission of "reasonable" measures. That is why she refuses again to sanction or to pronounce an injunction.
This is a remarkably written, motivated, and balanced decision.
Reminiscent of the basic legal principles, which shows that the Compliance fully integrates into the principles of Law, here the Law of proof, and that if the compliance techniques are the Ex Ante in the organization of companies , the sanctions remain from the Ex Post, demanding evidence.
This also applies to injunctions, which are too often presented as security measures (see the Daimler case, in June 2019), whereas the company is penalized for non-compliance by the form of an obligation to do.
This does not weaken the authorities because, as the decision has recalled several times the prosecution can be triggered by the mere demonstration of the "likelihood" of a breach and it is up to the company to break this likelihood. In the same way, the firm may not follow the recommendations, but it is a risk of proof that it must measure well before endorsing it.