The offence of favouritism (délit de favoritisme) is today one of the most sensitive criminal offences in relation to public contracts and public procurement. It directly concerns elected officials and public officials, but also the heads of public or semi-public bodies. The counterparties of these public bodies may themselves incur criminal liability for handling the proceeds of favouritism (recel de favoritisme) if they have benefited from the offence.
In practice, decisions taken in a hurry, poorly secured procedures or “habitual” practices can be enough to engage personal criminal liability.
The aim of this article is clear: to enable you to understand what the offence of favouritism really is, when it is established, and how it materialises in practice, so that you can better assess the risks.
The offence of favouritism: a criminal offence in its own right
The offence of favouritism is provided for by Article 432-14 of the French Criminal Code.
It penalises the act, by a person exercising certain public functions, of favouring a candidate or a contracting party in breach of the rules designed to guarantee equality and transparency in public contracts.
Contrary to a widespread idea, this is not a mere administrative irregularity.
Favouritism is a criminal offence, punishable by heavy penalties, including where:
- no personal enrichment is shown;
- no financial loss is established;
- no intention to harm is characterised.
A very broad scope since the Sapin 2 Act
Since the reform introduced by the so-called Sapin 2 Act, the offence of favouritism applies:
- to all public contracts, without distinction,
- to all concession contracts, and no longer only to public service delegations.
In concrete terms, this means that all operations falling within public procurement can now be analysed from a criminal angle, from the drafting of the tender specifications through to the performance of the contract.
Who can be prosecuted for the offence of favouritism?
The offence of favouritism covers a broad circle of people.
The following may in particular be prosecuted:
- local or national elected officials,
- public officials,
- persons entrusted with a public service mission,
- the directors and managers of public establishments,
- the heads of semi-public companies (sociétés d’économie mixte),
- anyone acting on behalf of a public entity.
In some cases, the legal entity itself may also incur criminal liability, with the exception of the State.
In practice, prosecutions often concern experienced decision-makers, whom the courts accuse of not being able to be unaware of the applicable rules.
The offence of favouritism in public contracts
The contracts concerned
The offence of favouritism applies to all contracts falling within the Public Procurement Code (Code de la commande publique), in particular:
- public works, supply and service contracts,
- public-private partnership contracts (marchés de partenariat),
- defence and security contracts,
- concession contracts (services, development, special concessions).
Certain operations presented as “atypical” or “outside public procurement” may in fact be reclassified by the criminal court.
This is notably the case for:
- certain off-plan property sale arrangements (VEFA),
- agreements entered into with associations,
- or poorly classified concessions.
When is the offence of favouritism established?
This is a central question, and one that is often poorly understood.
An act contrary to the rules on competitive tendering
The offence is based first of all on a breach of the rules designed to guarantee:
- freedom of access to public procurement,
- equal treatment of candidates.
These rules derive from the Public Procurement Code and the texts that preceded it.
An unjustified advantage granted to a third party
The unjustified advantage corresponds to a competitive benefit granted to an economic operator in breach of these rules.
It can take various forms:
- award of the contract,
- privileged information,
- skewed selection criteria,
- “tailor-made” conditions of participation.
No financial loss is required.
A formal offence: an attempt is enough
The criminal provision refers to the act of procuring or attempting to procure an unjustified advantage.
The offence can therefore be established even if:
- the contract is annulled,
- the contract is never performed,
- the procedure is interrupted.
Intent assessed strictly
The offence of favouritism is intentional, but intent is largely inferred:
- from the function exercised,
- from the level of competence expected,
- from the nature of the irregularities committed.
The offence of favouritism: concrete examples
In practice, prosecutions for favouritism are based on very varied situations.
During the preparation of the contract
- tender specifications drafted to match an identified provider,
- excessive or unjustified technical requirements,
- biased selection criteria.
During the award
- artificial splitting of a contract to avoid the thresholds,
- unjustified use of a negotiated procedure,
- a total absence of competitive tendering.
During the analysis of tenders
- disclosure of privileged information,
- acceptance of a tender submitted after the deadline,
- a decision taken before the opinion of the competent committee.
During performance
- amendments (avenants) substantially altering the contract,
- unjustified payments,
- irregular extensions of services.
Favouritism, unlawful taking of interest, corruption: beware of confusion
Favouritism is distinct:
- from unlawful taking of interest, which requires a personal interest on the part of the offender;
- from corruption, which involves an agreement and something given in return.
Favouritism can exist without corruption or personal enrichment.
What penalties apply to the offence of favouritism?
The penalties provided for by law are heavy:
- up to 2 years’ imprisonment,
- a fine of 200,000 euros, or even more depending on the proceeds derived from the offence.
Additional penalties may be added:
- a ban on exercising certain functions,
- exclusion from public contracts,
- lasting damage to professional reputation.
Key takeaways
- The offence of favouritism has a very broad scope.
- It can be established without financial loss or corruption.
- An attempt is enough.
- Criminal risk exists at every stage of a public contract.
Securing procedures to limit criminal risk
In public procurement, the line between an administrative irregularity and criminal liability can quickly be crossed.
As a business criminal lawyer in Paris, I regularly assist elected officials, public officials and directors faced with inspections, investigations or prosecutions for favouritism, as well as private companies prosecuted for handling the proceeds of favouritism.
A legal analysis carried out in advance, or a rapid intervention during the investigation phase, often makes it possible to regain control of the case and to limit the criminal and reputational consequences.
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