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Corporate Crime Reporter - Double Jeopardy In Corporate Crime Cases

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Eversheds Sutherland Partner Sophie Scemla comments on Double Jeopardy In Corporate Crime Cases

The French Supreme Court in March confirmed the first conviction of two entities for bribery of a public official in France.

The judgment demonstrates that since the double jeopardy defense does not apply internationally, entering into settlements with the authorities of one of the countries involved exposes companies to the risk of multiple prosecutions and convictions before other jurisdictions in international corruption cases.

That’s according to Sophie Scemla, a partner at Eversheds Sutherland in Paris, France.

Scemla says the double jeopardy defense should be applied internationally.

And she is working with colleagues around the world to get governments to take the double jeopardy defense in corporate crime cases seriously.

Scemla chairs the Double Jeopardy Subcommittee of the International Bar Association.

“We speak with the French prosecutors,” Scemla told Corporate Crime Reporter in an interview last week. “We speak with the Department of Justice prosecutors. We speak with the Organization for Economic Cooperation and Development (OECD). Under the OECD convention, when charging in several jurisdictions, there should be cooperation between the prosecutors. The convention ought to be amended to allow for the double jeopardy defense in international bribery cases.”

Scemla says that there are signs that corporate crime prosecutors are starting to take double jeopardy seriously. She points to the recent corporate crime settlement with Societe Generale, the first ever Department of Justice coordinated prosecution with French authorities.

In June, Societe Generale, a global financial services institution based in Paris, France, and its wholly owned subsidiary, SGA Societe Generale Acceptance, entered into an agreement to pay a combined total penalty of more than $860 million to resolve charges with criminal authorities in the United States and France, including $585 million relating to a multi-year scheme to pay bribes to officials in Libya and $275 million for violations arising from its manipulation of the London InterBank Offered Rate (LIBOR), one of the world’s leading benchmark interest rates.

SGA Societe Generale Acceptance pled guilty in federal court in New York in connection with the resolution of the foreign bribery case.

Together with approximately $475 million in regulatory penalties and disgorgement that Societe Generale has agreed to pay to the Commodity Futures Trading Commission (CFTC) in connection with the LIBOR scheme, the total penalties to be paid by the bank exceed $1 billion.

“Both French and American authorities claimed jurisdiction over Societe Generale for the bribery scheme – France as the home country to the company and the United States based on the presence of a subsidiary in New York as well as business connections with the US,” Scemla said. “While prior multi-jurisdictional cases had often resulted in ‘overlapping’ or ‘piling on’ of penalties, in this case the total $585 million criminal penalty for the FCPA bribery violations will be equally divided between the US Department of Justice and the French Parquet National Financier (PNF). This crediting by the US for sanctions paid to another country’s authorities for the same conduct is a marked first in FCPA enforcement actions.”

“It is also worth noting that in the agreement with the PNF, Societe Generale also committed to have the French Anti-Corruption Agency (AFA) assess the quality and the effectiveness of the anti-corruption measures it implemented for a two-year period. The Department of Justice, in recognition of the French monitoring that would take place, did not impose a monitoring requirement as part of its settlement.”

“The coordinated resolution of the investigations with divided penalties between the French and the American authorities is also significant as it allows Societe Generale to effectively avoid double jeopardy. International jurisdictions have previously held that the double jeopardy defense does not apply in international bribery cases, in order to prevent the risk of multiple prosecutions and convictions.”

The decision by the French Supreme Court to not allow for a double jeopardy defense in international corporate crime cases grew out of the oil for food cases.

Several companies were accused of bribing Iraqi public officials in order to buy oil under the United Nations’ administered oil for food program.

Based on the report of the UN’s independent investigating commission, criminal investigations were opened in the US against many foreign companies involved in trading through the oil for food program.

Several companies entered into deferred and non prosecution agreements in the United States. One of them pled guilty to a criminal charge of grand larceny in the United States.

Scemla says that considering that the payment of these mandatory additional fees did not constitute a bribe, the charges were dropped in several countries.

But in France, several companies were indicted for bribery of a public foreign official.

The lower court decision from the Paris Criminal Court dated July 8, 2013 dismissed all charges against the indicted parties because “the double jeopardy defense shall apply without any territorial restriction.”

“Therefore the companies which had previously entered into a deferred or non prosecution agreements in the US could not be prosecuted a second time in France on the basis of the same facts,” Scemla says.

But on appeal, the Paris Court overruled the judgment of the Criminal Court on February 26, 2016. And the Supreme Court also refused to apply the double jeopardy defense in international bribery cases.

When it comes to corporate crime, things are changing quickly in France.

Until recently, deferred and non prosecution settlements were unheard of in France.

“It was impossible,” Scemla said. “There were plea agreements. But there was no chance for non prosecution or deferred prosecution agreement.”


Why did France decide to go to these agreements?

“France is a member of the OECD, which considers France as not strong enough against foreign bribery, so a new law was adopted last year. The new law created compliance obligations for corporations and their directors. If they don’t impose these compliance programs, they will be personally sanctioned. But it also created the possibility for entering into the equivalent of a deferred prosecution agreement.”

Have there been such settlements?

“Yes. There have been several. Most important is the recent settlement by the United States and France with Societe Generale. They entered into deferred prosecutions – one in France and one in the United States.”

Are you saying that double jeopardy can be used by corporate attorneys to limit liability in countries around the world?

“No. But attorneys should take this issue into account when they enter into a settlement in some countries. Just because you enter into a settlement in the United States doesn’t mean that there won’t be similar charges in other countries based on the same facts. It’s a risk that companies should take into account.”

“My position is that there should be more work internationally to evolve this issue. In the Societe Generale case, the French and the American prosecutors worked together. If they didn’t cooperate, Societe Generale might have entered into a deferred prosecution agreement or non prosecution agreement in the United States. And then it would have been prosecuted in France.”

“And double jeopardy would not have stopped it because double jeopardy doesn’t apply to international matters.”

Double jeopardy doesn’t apply to international matters. You argue it should apply?

“Of course it should apply,” Scemla said. “It is not fair that a company that pays millions of dollars in the United States will be convicted a second time for the same facts in France or in Switzerland or in Africa or in whatever jurisdiction.”

“We have a double jeopardy committee of the International Bar Association, which I chair. It is very popular among corporate lawyers because they don’t want to see their clients convicted twice.”

Is there any hope that things can change?

“You see that in the Societe Generale case. They took double jeopardy into account. The French prosecutor and the Department of Justice took into account that yes, if the company were convicted in the United States, it could also be convicted in France. So, they decided to settle together.


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Originally published by Corporate Crime Reporter. For the complete q.a format Interview with Sophie Scemla, see 32 Corporate Crime Reporter 32(14), August 6, 2018.