Demystifying the implications of France’s SAPIN II for emerging markets

In a multi-jurisdictional and cross border environment, it is imperative for nations across the globe to strengthen their stance on anti-corruption by improved regulations to mitigate risks. In line with this, France enacted the amended SAPIN II law to combat bribery and corruption in mid-2017. The Act aims at boosting France’s competitiveness in matters related to compliance.

To discuss the impact of SAPIN II Act on companies in emerging markets such as India, Middle East, Africa and ASEAN, a webinar was conducted by EY’s Fraud Investigation & Dispute Services practice. This also had senior Partners from Navacelle Law and Law Offices of Panag & Babu share their perspectives from both a global and India standpoint. Stéphane de Navacelle, Partner at Navacelle Law who has significant experience in French and US white collar crime, and has participated in several landmark cases involving Foreign Corrupt Practices Act (FCPA) and embargo restrictions, insider trading and fraud discussed the intricacies and significance of SAPIN II law. After that, Sherbir Panag, Founding Partner, Law Offices of Panag & Babu, a white collar crime specialist focusing on cross border cases involving the FCPA and other anti-bribery laws shared interesting insights on SAPIN II’s impact on India.

To set the context, SAPIN II has gained prominence in India and other emerging markets in the recent past due to the rising cases of investigations around French organizations in these regions.

Stéphane elaborated the recently passed new French corporate duty of vigilance law (with an extraterritorial application), which imposes onus on organizations to safeguard health, environmental calamities and human rights, with heavy fines levied in case of non-compliance. His session covered the importance of co-operation with foreign authorities, emphasizing the need for greater awareness around the risk and possible interest of French authorities, especially when dealing with a local prosecutor during an investigation. Several other subjects were also covered including the need for an effective compliance system to deter criminal corporate liability, possibility for anti-corruption NGOs to initiate criminal prosecutions, the legal instruments available for practical co-operation and advantages and disadvantages around self-reporting.

Sherbir highlighted that India is currently heading for an ‘information arbitrage’ between what is expected by the law enforcements (more information and disclosure) as compared to the existing state and form, wherein there is no agreement or a settlement framework for organizations to disclose information. That said, there has been an upward trend witnessed in India toward the need for a robust compliance program and adoption of global standards such as the SAPIN II law and the ISO 37001 certification that will build a coalition between multinationals and Indian companies in the future to work in sync and remain compliant. He concluded that there has been a sea of change in the functioning of the compliance programs and its efficacy 10 years ago vis-à-vis now, owing to the continuously evolving business backdrop.

With the rising cases of fraud and abuse, it is only vital for companies to relook and re-invent the existing compliance wheel and comply with the transforming regulatory landscape.

Follow @EY_India and track #EYForensic for regular updates


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