Introducing the French Anti-Corruption Guidelines (2/4)

A striking feature of the Agence Française Anticorruption (AFA) Guidelines is the fact that they are meant to be applicable to ALL types of organizations, whether public or private, large or small: “The anti-corruption referential is a coherent and inseparable body applicable to all organizations, whatever their size, their corporate form, their sector of activity, their turnover of their payroll” (see Guidelines).

It might be a bit unsettling at first to realize that the same Guidelines are meant to apply to entities as diverse as a small municipality, a multinational corporation, a state-owned enterprise, the Ministry of Health, a small or medium-sized company, a law firm, etc. But there is a strong precedent here: the US “Organizational Guidelines”, that in 1991 literally “invented” compliance (see here), take the exact same approach and define an “organization” as “a person other than an individual”. In practice, this implies some tailoring of the Guidelines in consideration of the size and nature of the organization. One may regret the lack of AFA guidance here, especially when it comes to small and medium companies : the draft version of the AFA Guidelines included specific guidance for small organizations, but this section has been removed from the final version.

It should be noted that, interestingly, the scope of the Guidelines exceeds the scope of entities that, pursuant to article 17 of the Sapin 2 Law, are subject to AFA controls and sanctions. Just as a reminder, the scope of article 17 consists of: (i) companies headquartered in France having at least 500 employees whose annual turnover is more than €100 million; (ii) companies belonging to a group, whose parent company is headquartered in France, when the group has at least 500 employees, and a consolidated turnover exceeding €100 million; (iii) unincorporated French state-owned enterprises (établissements publics industriels et commerciaux).

Why would an organization that is NOT subject to AFA controls care about AFA Guidelines? In my opinion, such an organization should be very much care, for two reasons :

First, it may, one day, cross the above-mentioned thresholds, and thus become immediately liable to controls and sanctions, so… better prepare.

Second, the progressive generalization of third party due diligence will lead investors and other business players to ask questions about the anti-corruption compliance program of their third parties, and whether they comply with French best practice. And make no mistake here: entities that are outside of the scope of AFA controls will ne be spared. On the contrary, the fact that they are not otherwise controlled might lead due diligence requesters to be particularly cautious.