Monday, March 19, 2012

Scorpene and the French hunt for justice | Free Malaysia Today

Scorpene and the French hunt for justice

Céline Boileau | March 19, 2012-FMT
Philippe Montigny, the president of ETHIC Intelligence, talks to FMT about how the French courts pursue issues of transnational corruption.

PARIS: Allegations of corruption, abuse of power and the brutal murder of a former model make up the plot behind the Scorpene submarine purchase, which has continued to haunt Prime Minister Najib Tun Razak.
Now the French judiciary has officially opened investigations into the sale of the two submarines which were sold to Malaysia in 2002.
It was reported that French prosecutors had prima facie evidence to probe the alleged improprieties against French naval shipbuilder DCNS.
Malaysian NGO Suaram had first filed the complaint with the French judiciary in February 2010, enquiring about the formation of Perimekar after DCNS signed the deal with the Malaysian Defence Ministry, then headed by Najib.
In an interview with FMT, the president of a Paris-based anti-corruption certification agency ETHIC Intelligence, Philippe Montigny, talks about bringing the culprits of corruption to book in the French courts.
In case of bribing foreign public officials, who can be hauled up according to the French law?
Montigny: Since the Act of Nov 13, 2007, the briber (individual or company who paid or offered the bribe), and the corrupted public official (who accepted or asked for the bribe) can be prosecuted, regardless of the country where the crime was committed. The first one will be sued for active bribery, and the second for passive bribery.
Moreover, if the offence was committed indirectly through a third party (individual or company) used to carry the kickbacks, this middleman may be prosecuted as an actor or as an accomplice in the crime of corruption.
What are the penalties?
The briber, the person bribed and the middlemen, incur the same penalties: up to 10 years imprisonment and/or a fine of €150,000 (about RM675,000). Additional sanctions are also possible, such as the suspension of civil rights, civic etc. Companies involved face a fine of €750,000 but also the reimbursement of undue profits, or even a ban on participation in public tenders or use of public savings.
What is the statute of limitation?
For most financial offences, the limitation period is fixed at three years. But it only begins when the discovery becomes possible, that is to say, for instance the last day of the receipt of what was promised or the last payment of kickbacks. It is sometimes far beyond the initial pact.
What if, by this time, the company that helped to convey the bribe disappears?
If the company is gone, people have not disappeared! Justice will still pursue all those responsible for the offence, whether as simple implementers or decision makers. Only the prosecution against the company will end.
In transnational (public) corruption cases, what is the role of intermediaries?
Most companies active in international markets rely on sales agents. These agents allow them to have additional commercial and technical assistance in countries where they are not present and/or for large projects requiring specific expertise. Commercial agents are paid for real and legitimate activities they conduct on behalf of the company.
When the law of June 2000 – which transposes in France the OECD Convention on the fight against bribery abroad – was passed (thereby prohibiting French companies to pay bribes to foreign public officials), some companies have asked their agents to pay bribes for them. The bill of the agent just had to include the bribe to be paid. As he is usually based in a third country, the odds of discovery are low and prosecution can be difficult. Since then, many intermediaries and companies were convicted in the signatory countries of the OECD convention though, and nowadays, most companies use sales agents for legitimate services, make sure that remuneration is appropriate for services rendered and have developed specific policies to monitor the sales agents’ integrity.
Why are there so little bribery cases sued in France?
Several investigations involving French companies are ongoing. Few trials began, but so far no judgment has yet been delivered.The main reason I think is procedural. The US, Britain or Germany, have features that encourage companies to make voluntary disclosure and to cooperate closely with the law if they are the subject of an investigation, including by pleading guilty. These procedures, which generally lead to less than a year, usually result in an exemption from criminal sanctions on the company, very high financial penalities and custom sanctions on those responsible for the bribe.
In France, a company has no incentive to reveal specific issues on an act of corruption it would have discovered, or to cooperate with the authorities. It follows lengthy procedures, where the judiciary loses a lot of time to establish evidence of a crime committed abroad, in other languages, other legal environments and often resulting from complex financial mechanisms.
Céline Boileau is a Paris-based freelance writer.

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