FRANCE Law and Practice Contributed by: Christophe Ingrain, Tristan Gautier and Benoît Martinez, Darrois Villey Maillot & Brochier
Sanctions for Non-Compliance Failure to comply with these obligations can lead to both administrative and criminal repercussions: • The AFA is empowered to conduct controls and issue sanctions for companies that breach their compliance obligations. Fines for legal entities can reach EUR1 million, and fines for individuals EUR200,000. • A compliance order may be imposed on a legal entity convicted for an offence of bribery or influ - ence peddling and require the company to imple - ment the measures listed above, under the control of the AFA, for up to five years (Article 131-39-2, CP). • The act of refraining from taking the measures imposed by the AFA is punishable for the repre - sentatives of legal entities by two years’ imprison - ment and a EUR50 000 fine (Article 434-43-1, CP). Additional fines and sanctions may apply. 3.4 Insider Dealing, Market Abuse and Criminal Banking Law Insider Dealing The offence of insider dealing, punishable under Arti - cles L. 465-1 et seq., CMF, constitutes one of the main forms of market abuse under French law. It is generally the AMF, rather than the criminal court, that imposes stock market sanctions. To establish insider dealing, two main elements must be proven: the existence of inside information and the existence of an insider. The CMF distinguishes three forms of insider dealing: • use of inside information to acquire or dispose of financial instruments; • recommendation or inducement to engage in a transaction based on inside information; and • unlawful disclosure of inside information to another person. The offence is intentional and carries criminal sanc - tions of five years’ imprisonment and a fine of up to EUR100 million, which may be increased to ten times the amount of the illicit profit, provided that the fine is not less than the benefit obtained. When the offence
is committed as part of an organised group, penalties may increase to ten years’ imprisonment and a fine of up to EUR100 million, potentially raised to ten times the profit gained (Article L. 465-1, CMF). Additional fines may apply. Market Abuse Market abuse covers a broader range of manipulative practices, including market manipulation, false or mis - leading transactions, and the dissemination of false information, all prohibited under the Market Abuse Regulation (EU) No 596/2014 (MAR), directly appli - cable in France and complemented by the domes - tic enforcement powers of the AMF and the criminal courts. Banking Offences French criminal banking law derives primarily from two sources: the CC and the CMF. These frameworks penalise various forms of illicit financial activity, includ - ing unauthorised banking or financial solicitation, credit-related offences, and violations of consumer protection provisions. 3.5 Tax Fraud Tax fraud is a criminal offence committed when a tax - payer uses any of the following means to deceive the tax authorities in order to avoid paying or reduce the amount of tax due (Article 1741 of the General Tax Code): • failure to file tax returns within the prescribed deadlines (simply failing to submit the required tax documents on time constitutes an offence, even if the taxpayer ultimately owes no tax); • concealment of taxable income or assets; • organising insolvency or obstructing tax collection; and • acting “in any other fraudulent manner” (this final category is intentionally broad and covers all con - ceivable methods that might be used to evade or diminish tax liability). The offence therefore requires both: • a material element, consisting of one or more fraudulent acts; and
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