Evidence gathering differs greatly between common law and civil law jurisdictions. For example, while a U.S. judge may in many instances allow extensive pretrial discovery, a French judge would generally consider nearly any discovery to be improperly invasive. In this context, French Law No. 68-678 of July 26, 1968, relating to the transfer of documents and information of an economic, commercial, industrial, financial or technical nature to foreign natural or legal persons, amended by Law No. 80-538 of July 16, 1980 (the French Blocking Statute), is among the most well-known laws aimed at limiting and in some instances restricting cross-border discovery.
The French Blocking Statute has long been criticized for presenting French companies with a dilemma: either choose to comply with the request for disclosure and possibly expose the company or its employees to prosecution in France, or comply with the provisions of the French Blocking Statute and risk jeopardizing the company's or individual's legal positions or interests in proceedings abroad. Despite these tensions, the statute appears to have only been strengthened and revitalized by certain developments in France, the EU and the U.S. all of which present new extraterritoriality issues and increase the complexities of complying with or resisting foreign discovery:
French Law No. 2016-1691 (Sapin II Law), which, among other things, entrusts the Agence française anticorruption (AFA) with ensuring compliance with the French Blocking Statute by companies under investigation by foreign authorities that have entered into agreements requiring the appointment of a corporate monitor The new EU General Data Protection Regulation (GDPR),1 and in particular Article 48 thereof, which notably regulates the transfer of data outside of the EU, including to foreign courts and regulatory or administrative authorities The U.S. Clarifying Lawful Overseas Use of Data Act (CLOUD Act),2 which establishes new procedures allowing the U.S. government to seek data from providers of electronic communication services across borders These statutory developments reaffirm the centrality of the French Blocking Statute. French MP Raphaël Gauvain emphasized this impact in a recent report to the French prime minister on the challenges posed by extraterritorial legislation and the mechanisms available to protect French companies (the Gauvain Report). The Gauvain Report, which has not been formally made public, (i) emphasizes the role of the Service de l'information stratégique et de la sécurité économiques (SISSE, a service under the supervision of the Ministry of Finance) as watchdog in the context of foreign requests for documents and information, (ii) recommends the strict enforcement of the French Blocking Statute through the increased penalties provided by the statute and (iii) calls for the establishment of a legal privilege covering communications of in-house legal counsel to French companies.
The French Blocking Statute
The French Blocking Statute primarily imposes criminal sanctions on parties that export certain categories of documents, or respond to discovery requests, without going through the proper legal and administrative channels. The law consists of four articles.
Article 1 provides that subject to treaties or international agreements it is prohibited for any individual of French nationality or who usually resides on French territory and for any officer, representative, agent or employee of an entity having a head office or establishment in France to communicate to foreign public authorities, in writing, orally or by any other means, anywhere, documents or information relating to economic, commercial, industrial, financial or technical matters, the communication of which is capable of harming the sovereignty, security or essential economic interests of France or contravening public policy, specified by the administrative authorities as necessary emphasis added. This provision becomes relevant, for example, in the context of international investigations of French nationals or companies conducted by foreign authorities including, for instance, the U.S. Department of Justice, the U.S. Securities & Exchange Commission, the U.S. Federal Trade Commission and the British Serious Fraud Office on issues such as anti-corruption, anti-money laundering, antitrust, etc.
Relatedly, Article 1bis provides thatsubject to any treaties or international agreements and the laws and regulations in force, it is prohibited for any person to request, to investigate or to communicate in writing, orally or by any other means, documents or information relating to economic, commercial, industrial, financial or technical matters leading to the...