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International experts - Published: 20 June 2018
Claire Tetart
Head of Anti-Corruption Certification, ETHIC Intelligence - Paris

The French National Prosecutor’s office recently concluded a deferred prosecution agreement with the Société Générale bank to settle suspicions it had paid bribes to foreign public officials. Société Générale was issued fines of 250,150,755 euros. For the first time since the entry into force of the Sapin II law, this resolution was coordinated with the US Department of Justice which also concluded a deferred prosecution agreement with the French bank based on the same facts.

What was the Société Générale charged with to merit this DPA?

Following the lifting of Libyan sanctions by the United States and the European Union between 2004 and 2006, Société Générale was accused of using a Libyan intermediary to bring business to one of its subsidiaries, LYXOR, which specialized in structured products. The intermediary is believed to have put the Société Générale into contact with the Libyan Investment Authority, a public entity created by the Libyan state in order to manage and invest funds which it had accumulated over the sanctions period. The Libyan Investment Authority or LIA had invested more than USD2.1 billion in the bank and it was alleged that employees of the LIA received undue advantages (trips, gifts, human resource assistance, etc.) from the Société Générale to facilitate financial investments.

How did the French and American authorities work together to arrive at this joint agreement?

The American authorities were the first to open an investigation into Société Générale’s activities in 2014. The French National Prosecutor got involved in 2016 following the publication of articles in the press which suggested acts of corruption linked to investments the LIA had made with the Société Générale. Very quickly the two authorities started working together to share details of the investigation and to ensure that human resources were not duplicating tasks. Thanks to the Treaty on Mutual Legal Assistance between the US and France, the French and American prosecutors could exchange information and manage the investigation from both sides of the Atlantic.
The methods used to calculate fines were relatively similar on both sides. It was determined that the total fine would be USD 585,552,888 to be divided equally between the US DOJ and the French National Prosecutor’s office.

How and by whom will the bank’s monitorship be carried out?

The monitorship, that is to say, conformity with Article 131-39-2 of the French Criminal Code, will be supervised by the French Anti-Corruption Agency for a duration of two years. The DOJ determined that an American monitor was not necessary and agreed with the French National Prosecutor to install the monitorship directed by French authorities. It is one of the first cases where the DOJ accepts to surrender this authority. In most cases, the DOJ is responsible for the designation of a monitor as was evidenced in the DPA with the telephone operator, VimpelCom in 2016, where the prosecution was conducted by both the DOJ and the Dutch authorities.

What lessons can be learned by this first DPA agreed to by both French and American authorities?

This DPA opens a new chapter in international corruption prosecutions. For several years, the American authorities had issued unilateral sanctions against French companies, but this negotiated settlement demonstrates that French authorities are now a legitimate prosecutorial authority in the eyes of the US DOJ.

It is important to remember the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997 which was ratified by the US and France and which stipulates in its Article 4 the rule of « ne bis in idem" in anticipation of multi-jurisdictional investigations. The article details that states must determine amongst themselves which one is the most appropriate to prosecute a corporate offense.

It will be interesting to see if the United States and France continue this collaboration and issue parallel sanctions or if this decision opens the way for a unique decision-making authority.

Claire is a counter financial crime specialist, possessing university diplomas from Luxembourg, England, Ireland and France. She started her career in the compliance department of a major international telecoms company and joined ETHIC Intelligence a year later. She is a regular speaker at anti-corruption conferences and teaches ISO 37001.

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