Justice or else: is France in the DOJ’s line of fire?

“We have already seen four major quasi-criminal settlements – with Technip, Alcatel, Total and Alstom –  where the US Department of Justice (DOJ) investigated French companies even though, at least in some of those instances, the connection with the United States was not very clear,” Frederick T. Davis, a counsel with Debevoise & Plimpton LLP and former US Federal Prosecutor said in an interview with ETHIC Intelligence. The French laws have a significant gap when it comes to prosecute corporations in France as there is no equivalent to the UK Bribery Act “corporate offence” adopted in 2010, explained Davis.

The Article 121-2 of the French Penal Code is “significantly more restrictive than the American approach” and that would explain why the US, using the Foreign Corrupt Practices Act (FCPA), is far more successful in prosecuting international companies, including French ones. The DOJ believes that because “French companies have not met their responsibilities in areas of international law enforcement and regulation (…) they merit attention from Washington DC,” concluded Davis. “The lack of timely and complete cooperation, which effectively frustrated the prosecution of culpable individuals, was one of the tipping points leading to charges, guilty pleas and landmark monetary penalties in the BNP Paribas case last year,” declared US Assistant Attorney General Leslie R. Caldwell on April 17, 2015.

In June 2014, BNP Paribas agreed to plead guilty and to pay $8.9 billion for illegally processing financial transactions for countries subject to US economic sanctions. Against this backdrop General Electric (GE)’s takeover of Alstom’s energy activities has been particularly controversial. “Likewise, a company’s decision not to cooperate may delay, but rarely thwarts, our investigation,” Caldwell said about Alstom that finally pleaded guilty too and paid a $772 million penalty in December 2014, barely one month after GE’s takeover. Despite possible gaps in French legislation over corruption, there is however strong sense in France that French companies would be deliberately targeted.

Beyond law enforcement, can one see here some kind of unconventional competition? “The State failed to defend the (national) interests,” in the case of Alstom, the French Center for Research on Intelligence (CF2R) underlined in a recent research report. There is not so-called “economic war,” US sources affirmed, just the application of law. It is true that companies among many others like American Avon Products, Swiss Crédit Suisse or Swedish-Swiss ABB were targeted as well. But latest revelations about years-long German intelligence service (BND) spying on French officials on behalf of the US National Security Agency (NSA) will likely increase such sense.