French settlement highlights corruption risk in mining

Edward James of Pinsent Masons made the recommendation after Areva entered a convention judiciaire d'intérêt public (CJIP) with Parquet National Financier (PNF).

The PNF is the National Financial Prosecutor's Office in France and is responsible for the investigation and prosecution of serious economic and financial crime. CJIPs are the French equivalent of deferred prosecution agreements (DPAs), which are tools used in countries such as the US and UK for resolving corporate criminal matters outside of criminal proceedings. CJIPs were introduced in 2017 when anti-corruption law Sapin II came into force in France.

The CJIP agreed in this case relates to Areva’s prior conduct in Mongolia over which it faced charges in France based on alleged bribes made to a foreign public official in relation to the acquisition of uranium mining rights. Between 2013 and 2015, Areva was alleged to have paid an intermediary who in turn invested the money in a real estate venture that was 80% owned by a Mongolian government official. Areva chose to settle the matter with the PNF – under the CJIP, Areva will pay a fine of €4.8 million whilst Orano, the new name of the mining arm of its business, will be required to implement an enhanced compliance programme that it will be required to fund.

Sapin II creates onerous obligations on qualifying French companies to implement specific compliance measures, such as a code of conduct, alert, or whistleblowing, system, risk assessments, and due diligence. Compliance with Sapin II is policed by the Agence Française Anticorruption (AFA). As part of the CJIP, the enhanced compliance programme that Orano will implement will have to satisfy AFA.

The PNF said it is the 22^nd CJIP it has negotiated. James said this shows the specialist French prosecutor is both highly active and effective at resolving corporate corruption matters.

James said: “The case again highlights the risks of using agents and intermediaries to disguise bribes. It also shows that mining companies are still getting caught in the trap of trying to bribe to win licences.”

“Mining companies should be acutely aware of these two risk areas and have enhanced compliance controls in place to manage any process that involves the award or renewal of prospecting or mining licences. They should also have strict controls in place for the engagement of any agents, particularly when entering new jurisdictions and when the agents will play any role the involves engaging with government officials,” he said.