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Understanding Sapin II 

French legislation, Sapin II, came into effect in June 2017, requiring companies operating in France, including foreign subsidiaries, to implement effective anti-corruption programs. These programs are designed to prevent and detect bribery and undue influence, adhering to the rigorous standards set by the French Anti-Corruption Agency (AFA). 

Inspired by the US FCPA and the UK Bribery Act, Sapin II mandates strict regulations, including increased organizational transparency, stronger internal monitoring systems, robust whistleblower protections, and effective supply chain risk management due diligence. The French Sapin II law targets corruption by requiring certain companies to implement anti-corruption programs. It applies to:

Large French companies: Those with at least 500 employees and a turnover exceeding €100 million.

French subsidiaries of large groups: Even if the subsidiary has fewer than 500 employees, it must comply if the parent company in France meets the employee threshold and the group's consolidated turnover exceeds €100 million.

The Importance of Compliance With SAPIN II

Non-compliance with Sapin II can lead to severe penalties for both companies and individuals. Companies can be fined up to €1 million for failing to implement required compliance programs, and up to €5 million or double the benefit derived from corruption in actual corruption cases. Additional sanctions may include judicial supervision, bans from public contracts, and requirements to strengthen compliance programs under AFA supervision. Executives and managers can be fined up to €200,000, face imprisonment for up to ten years, and potentially be banned from holding public office or serving as company directors.

Key Requirements of SAPIN II

Sapin II mandates the establishment of an internal anti-corruption program that includes the following elements:

Code of Conduct: A clearly defined code of conduct outlining acts that constitute corruption, integrated into the company’s internal regulations.

Internal Whistleblowing System: A confidential internal alert system that allows employees to report breaches of the code of conduct safely and anonymously.

Risk Mapping: Regularly updated risk maps to identify, analyze, and prioritize the company’s exposure to corruption risks, considering factors such as business sector and geographic location.

Third-Party Evaluation Procedures: Due diligence procedures for assessing the integrity and compliance of third parties such as suppliers, subcontractors, and business partners.

Accounting Controls: Robust internal or external accounting controls to ensure accurate and transparent financial records that prevent the concealment of corrupt activities.

Training Programs: Comprehensive training and awareness programs for employees, particularly those most exposed to corruption risks, to educate them on anti-corruption policies and practices.

Disciplinary Measures: Clear disciplinary measures for employees who violate the company’s anti-corruption policies, ensuring accountability.

Monitoring and Evaluation: Ongoing monitoring and evaluation of the effectiveness of the anti-corruption measures and internal controls, with periodic reviews and updates to reflect current risks and regulatory requirements.

GAN Integrity for SAPIN II Compliance

GAN Integrity supports these principles through a comprehensive anti-bribery management program, enhancing every aspect of compliance.

ABAC Program Management Conflict of Interests Management Third Party Risk Management Disclosure Management Reporting and Documentation

ABAC Program Management

Ensure your organization upholds ethical integrity and ABAC compliance through comprehensive risk assessments, effective policy management, and continuous monitoring. Capabilities include:

  • Third-party due diligence: Mitigate bribery and corruption risks with integrated questionnaires, sanctions checks, and risk intelligence data.
  • Disclosure management: Consolidate and assess conflicts of interest (COI), gifts, travel, entertainment, and political and charitable contribution disclosures.
  • Reporting and documentation: Maintain a complete audit trail and detailed reporting to easily demonstrate compliance to stakeholders and regulators.
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Frequently Asked Questions

 

What is the Sapin II law?
The Sapin II law is French legislation that came into effect in June 2017, requiring companies operating in France, including foreign subsidiaries, to implement effective anti-corruption programs. Inspired by the US FCPA and the UK Bribery Act, Sapin II mandates strict regulations, including increased organizational transparency, stronger internal monitoring systems, robust whistleblower protections, and effective supply chain risk management due diligence.
The Sapin II law provides guidance for French companies to implement comprehensive anti-corruption compliance programs, which include eight key elements such as a code of conduct, internal alert system, and corruption risk assessment. These guidelines aim to align France with international anti-corruption standards and require large companies with over 500 employees and annual revenue exceeding €100 million to establish robust measures for preventing and detecting corruption and influence peddling.
Companies failing to implement required compliance programs under Sapin II can face fines of up to €1 million, while actual corruption cases may result in fines of up to €5 million or double the benefit derived from corruption. Additionally, executives and managers can be personally fined up to €200,000 and face imprisonment for up to ten years for non-compliance with Sapin II regulations.
Sapin II affects large French companies with at least 500 employees and a turnover exceeding €100 million, as well as French subsidiaries of large groups that meet specific criteria. The law also impacts foreign companies operating in France, requiring them to implement effective anti-corruption programs to prevent and detect bribery and undue influence.

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