Stéphane de Navacelle
NACACELLE, Paris
sdenavacelle@navacelle.law

Roxane Castro
NACACELLE, Paris
rcastro@navacelle.law  

Laura Ragazzi
NACACELLE, Paris
lragazzi@navacelle.law

On 4 December 2023, the Paris judicial court (tribunal judiciaire de Paris) approved the last two conventions judiciaire d’intérêt public (CJIP) (deferred prosecution agreements) for the corruption of foreign public officials, signed between the National Financial Prosecutor’s Office (Le procureur national financier or PNF) and ADP Ingénierie (ADPI) on the one hand and SEVES Group/SEDIVER on the other hand.^[1]

These two CJIPs, relating to acts of corruption of foreign public officials, bring to 20 the number of CJIPs signed since the creation of this procedure by the Sapin II Law of 2016 and the signing of the first CJIP in October 2017. They also bring to five the number of CJIPs concluded in the area of corruption during 2023,^[2] demonstrating that, while this procedure has been extended to multiple offences, such as tax fraud, it is not neglecting the original offences for which it was created, that is, corruption and influence peddling.

ADPI CJIP concludes an investigation opened in 2014 related to the corruption of foreign public officials

ADPI would have committed acts that could be considered as corruption of foreign public officials in Libya and the United Arab Emirates

In 2013, ADPI filed a complaint for breach of trust, forgery, use of forgeries, complicity and concealment of these offences after: (1) receiving an anonymous letter revealing facts likely to be considered as corruption in connection with the negotiation of Libyan contracts between 2006 and 2008; and (2) discovering documents suggestive of acts of corruption of foreign public officials in the course of litigation with a service provider. In 2014, the Paris Public Prosecutor's Office entrusted an investigation to the central office for combating corruption and tax financial offences (Office centrale de lutte contre la corruption et les infractions financières fiscales or OCLIFF), which relinquished jurisdiction in 2016 in favour of the PNF.^[3]

On the one hand, the investigation conducted by the PNF, as well as the internal investigation conducted by ADPI, show that ADPI certainly had confidential information on a call for tenders launched in 2006 by the Libyan Civil Aviation Authority (LCAA) and that intermediaries, including public officials, may have facilitated the award of this contract.^[4]

It also appears that ADPI's subsidiary in Libya (ADPI LIBYA) benefited from advantageous local financial arrangements, even though the conditions for obtaining them were not met, which was made possible in return for a payment made by an ADPI intermediary to the competent administrative body.^[5] It was also revealed that several contracts were concluded with local service providers, sometimes at prices higher than the market price, without it being possible to assess the reality of several of their services.^[6]

On the other hand, it appears from the PNF investigation and two audit reports carried out by ADPI that the latter signed a contract in 2011 for the creation of a housing estate with a subcontracting company majority-owned by a representative of the Emirate of Fujairah (United Arab Emirates) for an excessive amount in relation to the subcontractor’s scope of work and without any deliverables being found.^[7] In addition, it appears that, under an agreement signed between ADPI and the said representative, the latter and its company received commission of five per cent and 21.5 per cent on each payment made to ADPI in connection with contracts and consultancy work carried out in the Emirate of Fujairah.^[8]

Therefore, the PNF concluded that all of these acts were likely to be considered as the corruption of foreign public officials.^[9]

ADPI agreed to pay a 'public interest fine', but was not required to implement a compliance programme under AFA supervision

For the facts described above, ADPI agreed to pay a public interest fine (amende d’intérêt public) of €14.600m.^[10] This fine was calculated on the basis of the benefits obtained from the breaches identified (restitutive part), as well as taking into account major factors, such as the accumulation of separate acts (committed in Libya and the Emirate of Fujairah) and minor factors, such as ADPI's active cooperation, which contributed to uncovering the truth and the numerous corrective measures implemented in terms of governance and compliance (afflictive part).^[11]

The amount of the benefits obtained from the breaches identified in Libya is based on a forecast estimate of the results at the start of the performance of the contracts and not the actual margins derived therefrom. This amount was ultimately not taken into account in the calculation of the fine because of the context of the civil war and the fact that ADPI had to stop its services in February 2011 and did not receive such an amount of money.^[12]

This fine is also the only penalty imposed on ADPI because the PNF did not ask for the implementation of a compliance programme. This deliberate choice by the PNF appears reasonable given that, since 4 January 2022, ADP International and its subsidiaries, including ADPI, have been subject to a two-year control on the implementation of their compliance programme by an independent expert as part of a settlement agreement signed with a development bank, and that ADP SA has declared that it is implementing the improvement actions raised by this expert throughout the entire ADP Group.^[13]

SEVES Group/SEDIVER CJIP was concluded following the opening of an investigation regarding the corruption of foreign public officials in 2018

SEDIVER would have committed acts that could be considered as corruption of foreign public officials in the Democratic Republic of Congo, Algeria, Libya and Nigeria

In 2017, the statutory auditor of SEDIVER, a SEVES subsidiary, informed the Nanterre Public Prosecutor's Office that the company had been the subject of an investigation by the World Bank into a contract for the rehabilitation of a power line in the Democratic Republic of Congo (DRC), for which it had been selected as a supplier of insulators. In 2018, the Nanterre Public Prosecutor's Office opened an investigation for the corruption of foreign public officials, which was subsequently transferred to the PNF in 2019.^[14]

The PNF’s investigation revealed that, in 2012, a World Bank financed contract was concluded between a state-owned company in the DRC, Société Nationale D'électricité (SNEL), and an Indian company, and that SEDIVER acted as a subcontractor responsible for supplying insulators for a power line. It was discovered that, in the context of this contract, SEDIVER paid commissions to several DRC public officials via a consultancy firm commissioned by the World Bank to assist SNEL in organising the contract, as well as via a Swiss agent and his company, in order to promote its selection as a subcontractor.^[15]

The investigation was extended to other projects in the DRC carried out by SNEL where similar facts were identified. It was also extended to other countries (Algeria, Nigeria and Libya), which it appears also involved the aforementioned Swiss agent and his company, as well as another Indian agent and his Emirati company, to whom a commission was allegedly paid by SEDIVER in connection with one of the projects in the DRC.^[16]

At the end of its investigation, the PNF concluded that all these facts relating to the DRC, Algeria, Libya and Nigeria, acknowledged by SEDIVER and SEVES Group, were likely to be considered as the active corruption of foreign public officials.^[17]

A 'public interest fine' was imposed on SEDIVER, which was required to implement a compliance programme under AFA supervision

For the aforementioned facts, SEDIVER agreed to pay a public interest fine of €13,373,000 and to implement a compliance programme under the supervision of the AFA for a maximum period of three years in order to ensure that SEVES Group's anti-corruption system is in place and effective. It was specified that the costs incurred by the AFA will be borne by SEDIVER up to a maximum of €500,000.^[18]

Investigations assessed that the benefits obtained from the breaches were identified to be €9,552,000 (restitutive part). Major factors, such as the systemic nature of the facts identified during the period 2009–2015 in commercial matters, as well as minor factors, such as compensation for the damage suffered by the DRC through the payment of €6.8M made by two subsidiaries of SEVES Group to the World Bank pursuant to the settlement agreement signed in November 2017, were applied to this amount (afflictive part).^[19]

The PNF decided to apply a ‘golden clause’ in favour of SEDIVER

The PNF agreed to the implementation of a ‘golden clause’, which provides that the CJIP signed regarding the aforementioned facts also covers facts about the corruption of foreign public officials of the same nature likely to have been committed in a list of 19 countries between 2009 and 2015 by SEDIVER. The PNF explained its decision using the systemic nature of the facts identified, the additional investigations carried out to identify the two agents’ scope of work, which seemed difficult, and the full cooperation of SEVES Group, which voluntarily provided information from its internal investigation.^[20]

In accordance with its Guidelines on the implementation of the judicial agreement of public interest (‘Lignes directrices sur la mise en œuvre de la convention judiciaire d’intérêt public’) of 16 January 2023, the PNF provided that this clause only applies if such facts have not been concealed during the procedure and that, should they be committed, they are immediately reported.^[21] Moreover, the application of such a clause implies an increase in the fine for the systemic nature necessarily superior to the minor factors. Although the details of the calculations are not reported in this matter, this seems to be the case because it was noted that one of the major factors is the systemic nature of the facts identified during the period 2009–2015 in commercial matters.^[22]

Therefore, although these two CJIPs were approved on the same day and both relate to the corruption of foreign public officials, they are quite different, both in term of the facts, which are not at the same level of complexity, and in terms of penalties, which do not fall under the same method of calculation with regard to the public interest fines and which provide, in one case, an obligation to implement a compliance programme and, in the other, no such obligation. They highlight the different options and methods for assessing sanctions, as well as the practical and pragmatic approach to the facts that is applied by the PNF.

CJIP SEVES Group/SEDIVER also shows the new aspects of this practice in that it provides a ‘golden clause’, which is a new option clearly provided by the new PNF’s 2023 guidelines, but not included in the AFA and PNF’s 2019 guidelines. This clause is a way to make the CJIP procedure more attractive for companies. It attests the willingness of prosecuting authorities, including the PNF, to resort more to negotiated justice.

Finally, the omnipresence of development banks in these two procedures should be noted and the impact that the procedures they lead may have on the modalities of concluding a CJIP in France. Indeed, ADPI escaped a compliance programme under the control of the AFA thanks to the expert mandated under the settlement agreement between ADP International and the International Finance Corporation (IFC), and SEDIVER benefited from the minor factor related to compensation for the damage suffered by the DRC thanks to the settlement agreement signed with the World Bank, which provided compensation to the latter of €6.8M.

This is in line with the PNF ‘2023 Synthesis’ (‘Synthèse 2023’), which states that it has implemented innovative investigation strategies in recent years by strengthening its cooperation with foreign authorities and developing its contact network with French and foreign administrative authorities, such as the World Bank and Inter-American Development Bank.^[23] Companies must therefore be aware of the interconnection between certain procedures and the growing relationship between different authorities around the world that increases their risk of prosecution.