The French Prosecutor Office Has Entered Into The First French DPA In History With HSBC Private Bank Suisse

Author:Ms Noëlle Lenoir, Alan R. Friedman, Paul H. Schoeman, Harry P Morgenthau, Alizée Dill and Hélène Bérion
Profession:Kramer Levin Naftalis & Frankel LLP
 
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On Nov. 14, 2017, six months after the so-called Sapin II law1 entered into force in France, the president of the Paris Tribunal de grande instance approved the first French deferred prosecution agreement (DPA or CJIP -convention judiciaire d'intérêt public) in a procedure established by this law and which was entered into on Oct. 30, 2017, by the French prosecutor office (PNF -Parquet National Financier) with HSBC Private Bank Suisse.

As a summary:

  1. What is the French DPA, the so-called CJIP ?

    This French criminal settlement procedure, quite similar to DPAs in the U.S. and UK, may be proposed:

    By the public prosecutor before the initiation of criminal proceedings2 When a criminal investigation has already begun, by the investigating judge, who may refer the case to the public prosecutor to pursue a CJIP3 Only to legal entities accused of corruption, influence peddling, laundering of tax fraud proceeds and related offenses However, neither the Sapin II law nor its related implementation Decree4 provides the applicable criteria for proposing to enter into this procedure.

    Moreover, as with U.S. and UK DPA proceedings, the CJIP does not require any admission of guilt from legal entities, although depending on the stage of the proceeding, the entity may need to acknowledge relevant facts.

    If parties reach an agreement over this procedure, legal entities can see imposed on them one or more of the following:

    Payment of a fine proportional to the benefits that result from the identified wrongdoing, which can reach up to 30 percent of the legal entity's average turnover calculated over the previous three years Implementing an anticorruption compliance program under the control of the French Anticorruption Agency (AFA - Agence française anticorruption) for a maximum of three years Payment of damages to the victims of the offense, if identified Once the agreement is reached, the public prosecutor submits it to the president of the Tribunal de grande instance for approval.5 If it is approved, legal entities have a 10-day period to withdraw.6

    As in the US, a CJIP is public and may be the subject of significant publicity: A press release is published by the public prosecutor and the AFA must release on its website the validation order, the amount of the fine and the agreement reached.7 

  2. What is the context in which the first CJIP was entered into?

    It was obvious that the PNF was eager to enter into a CJIP as soon as possible and, thus, moved very quickly to use...

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