Commercial aspects in the law “Sapin II” (loi Sapin II)

- Newsletter

The French law 2016-1691, also called “Sapin II” entered into force on December 11, 2016. This law on “transparency, fight against corruption and modernisation of economic life” will have an impact on the entire business law.

It aims primarily at preventing corruption by creating a French anticorruption agency (Agence française anticorruption), by introducing a general obligation of prevention of corruption risks for large companies and by protecting whistleblowers.

It also results in significant changes related to commercial matters.

  • New terms applying to all types of commercial relations

Concerning payment terms, article L.441-6 of the French Commercial Code (Code de commerce) henceforth provides a new exemption for contracts concluded in view of exporting products outside the European Union, free of VAT. There is now a 90-day payment term from the invoicing date.

The goal of this modification is for companies specialised in export to avoid suffering from the “scissor effect” between very short payment terms of French sellers and much longer payment terms imposed by foreign buyers. “Large companies” are expressly excluded from the benefit of this legal provision. Article L. 443-1 of the French Commercial Code, which concerns certain perishable goods or food products, was modified in the same way.

A detailed summary of all payment terms to be applied to French commercial agreements is available here.

For suppliers, distributors and service providers, the French Commercial Code now provides for the possibility to extend for up to 3 years the so called “convention unique”, which constitutes the distribution agreement. This possibility is also open to such agreements concluded by wholesalers (L.441-7-1).

Many constraints apply to those agreements; please contact us for further details.

Furthermore, this law provides for three new provisions set forth under article L.442-6 of the French Commercial Code concerning restrictive practices:

  • The undue or disproportionate advantages under article L.442-6 of the French Commercial Code now cover to two additional situations: the financing of a sales promotion operation and of services offered by an international central of distributors.
  • The law prohibits from imposing a clause in the “convention unique” that provides for a revision or renegotiation of prices based on one or more public price index without any direct link to the products or services covered by the agreement.
  • The submission or attempt to submit a trading partner to penalties for delayed delivery in case of force majeure is now punished.
  • Specific terms for agricultural and food products

The general terms and conditions regarding food products including one or more unprocessed agricultural products should indicate the expected average price offered by the seller to the producer of those agricultural products.

For some agricultural products, article L. 441-7 prohibits henceforth that the so called “NIP”, which constitute promotional benefits directly agreed upon by suppliers to consumers, exceed 30 percent of the scale value of unit prices, including management fees.

Other terms of the French Commercial Code have also been amended.

  • Reinforcement of the sanctions in case of violation of the transparency rules or in case of restrictive practices

The maximum administrative fine for violation of payment terms has been increased from 375.000€ to 2 million euros for legal persons (L. 441-6 of the French Commercial Code).

Concerning the penalty imposed in case of restrictive practices provided by article L. 442-6 of the French Commercial Code, particularly in case of abrupt termination of established commercial relations, of insertion of abusive clauses in a contract or of significant imbalance, the amount of the civil fine increases from 2 to 5 million euros. Previously, the Courts were simply entitled to order the publication of the decision, whereas the publication is now systematic.

In case of cumulation of administrative penalties applicable to one person for different breaches, the amount of administrative penalties was previously limited. This limitation has been removed and the penalties will now apply cumulatively (article L. 465-2 of the French Commercial Code).