CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in France

Under French law, there is no general obligation to report a criminal offence.

However, the Criminal Code (Articles 434-1 to 434-3) introduces an obligation to report offences in specific cases and criminally punishes failure to report it.

Article 434-1 of the Criminal Code imposes an obligation to report a crime when it is still possible to prevent or limit its effects, or when the perpetrator is likely to commit further crimes that could be prevented (for the purposes of this provision, this means the highest category of offence):

‘The fact that any person with knowledge of a crime whose effects can still be prevented or limited, or whose perpetrators are likely to commit further crimes that could be prevented, fails to inform the judicial or administrative authorities is punishable by three years' imprisonment and a fine of EUR 45,000.’

A distinction is therefore made between crimes that have not yet been committed and which can be prevented, which must be reported, and those that have already been committed, for which there is no obligation to report. French courts consider that failure to report a criminal offence after it has been committed cannot constitute an offence or an act of complicity.

Article 434-3 of the Criminal Code also provides an obligation to report abuse or assault of vulnerable persons (for ex. minors), failure to do so being criminally punished -but it does not fall within the scope of white-collar crime.

In addition, the legislator specifically requires the reporting of certain offences. For instance, Article L.561-1 of the Monetary and Financial Code requires persons who carry out, control or advise on transactions involving capital movements to report to the public prosecutor any transactions involving sums that they know to be the proceeds of an offence punishable by a prison sentence of more than one year or related to the financing of terrorism. Consequently, for some categories of individuals or legal entities, mandatory reporting arises from AML Regulation.

Also, certain persons, namely public officials or functionaries, or any public authority, who become aware in the course of their duties of a crime or offence, are subject to a reporting obligation (Article 40 of the Code of Criminal Proceedings).

Finally, although it is not mandatory, it is of course always possible to report the commission of a criminal offence.

The person who has knowledge of the crime that must be reported is responsible for submitting a report. The report must be made to the judicial or administrative authorities, in practice the public prosecutor or the police services.

Failure by a person with knowledge of the commission of a crime that can still be prevented (Article 434-1 of the Criminal Code), or with knowledge of abuse or assault against a vulnerable person (Article 434-3 of the Criminal Code), to inform the authorities is punishable by three years' imprisonment and a fine of EUR 45,000, which may be increased to five years' imprisonment and a fine of EUR 75,000 for certain crimes.

Some categories of persons may not be punished for failing to report an offence or an offender in application of Articles 434-1 and 434-3 of the Criminal Code. These are, for instance, persons bound by legal secrecy, such as lawyers.

In principle, there is no risk associated with reporting a criminal offence, a fortiori when it is a legal obligation.

However, Article 226-10 of the Criminal Code punishes slanderous accusation, whereas to report facts that could lead to administrative, judicial or disciplinary sanctions, when it is known to be false, whether it is addressed to a judicial or administrative police officer, to an authority with the power to take action or refer the matter to the competent authority, or to the hierarchical superiors or employer of the person reported. Slanderous accusation is punishable by five years' imprisonment and a fine of EUR 45,000.

For a person within a company, the risk associated with reporting an offence committed by another individual within the company is to potentially incriminate the company itself, as elaborated in question 5.

As a general principle under French criminal law, if an offence is committed on behalf of the company or benefited the company, the company may be held criminally liable, subject to certain conditions, under Article 121-2 of the Criminal Code.

The company may also be held civilly liable towards the damaged persons or damaged entities, if any.

The company's managers may also be held criminally and/or civilly liable, as they are the company's representatives and/or because the offences benefited them.

Finally, any individual within the company that participated in the commission of an offence or hindered the discovery of a crime by concealing or destroying evidence, may be held criminally liable.