How can French and European companies better defend themselves against extraterritorial procedures?

Significant investigative and regulatory developments have taken place in France and the United States in recent months.

With the assistance of Mayer Brown's Compliance, Regulatory and Investigations team in Paris, we invite you to read about some recent developments below.

On 26 June 2019, at the request of Prime Minister Edouard Philippe, Member of Parliament Raphaël GAUVAIN submitted the report entitled "Restoring the sovereignty of France and Europe and protecting our businesses from extraterritorial laws and measures" ("the Report").

• The Report notes that "French companies do not have effective legal tools to defend themselves against extraterritorial legal actions", including investigations and prosecutions brought against them by foreign states. The Report states that these legal actions are questionable and appear to be based on economic reasons targeting foreign companies in direct competition with the United States.
• The Report proposes the implementation of three measures and six recommendations to better protect French and European companies.

The measures:

i) protection of the confidentiality of legal advice in the workplace, through the creation of a status of in-house lawyer "endowed with the lawyer's ethics";

ii) the modernization of the 1968 law on the transmission abroad of sensitive economic information, known as the "blocking law", including by increasing the penalty provided for in the event of violation of the law; and

iii) the extension of the application of the RGPD to data of legal persons, which would make it possible to better protect French and European companies against the transmission of their own data.

• The recommendations:

(i) the promotion of better cooperation and the adoption of uniform rules to better protect companies against the transmission of sensitive economic information to foreign authorities ;

(ii) strengthening the implementation of the Public Interest Judicial Convention ("PICJ");

(iii) seeking the opinion of the International Court of Justice on the state of international law on extraterritoriality;

(iv) the launch of a French initiative at the OECD concerning the creation of common rules on extraterritorial laws and measures; and

(v) the strengthening of European tools to protect businesses against requests from foreign authorities for the transmission of information.
In addition, the creation of a mission "aimed at strengthening the tools and means dedicated to the fight against economic and financial offences, in particular the fight against the corruption of foreign public officials in international commercial transactions" is also recommended.

Find the full report here.