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Capital Markets

France

An Autorité de marchés financiers working group recently published a report containing 21 recommendations to amend regulations on notification of crossing shareholding thresholds and statements of intent. It suggests changes to certain thresholds and deadlines, and assimilation of securities which the shareholder has the right to acquire by virtue of a financial instrument for threshold calculation.

Corporate Finance/M&A

France

The Acquisitions Directive on procedural rules and evaluation criteria for the prudential assessment of acquisitions and increases of holdings in the financial sector has introduced consistent procedures throughout the European Economic Area for regulatory assessment of acquisitions and increases of holdings in the financial sector. Has its implementation affected acquisitions of French financial institutions?

An analysis of case law reveals that the impact of a merger on a guarantee agreement will differ depending on whether the merging company is the creditor, the debtor or the guarantor, and on whether the company is the absorbed company or the absorbing company. This update explores the various permutations.

Derivatives

France

At the 2008 annual public meeting of the Autorité des marchés financiers (AMF), market professionals approved the European Commission's proposals demanding the introduction of a centralized clearing house for credit default swaps. The AMF put in place a working group to draft its own proposals by the end of 2009.

Energy & Natural Resources

France

Under French tax law, windmills used by a company for the production of electricity can benefit from a derogatory tax regime with respect to corporate income tax, property tax and business tax. Moreover, a specific tax is applicable to windmill manufacturers established in France; there is thus a risk that a company producing electricity through windmills may be subject to this tax.

The Ministry for Economy, Finance and Industry has decided to suspend an increase in the sale price of gas provided by the public distribution network operator, despite the unfavourable opinion of the Energy Regulatory Authority. Among other things, the authority has issued a document aimed at helping household customers to choose their gas and electricity supplier.

Healthcare & Life Sciences

France

Following the signature of a national agreement requiring every company to offer health insurance to its employees, the Competition Authority has issued an opinion making recommendations to ensure effective competition between players in the complementary and collective health insurance sectors. The authority is encouraging the legislature to favour a regime where companies choose their own complementary health insurer(s).

The Competition Authority has launched an inquiry into the competitive functioning of the pharmaceutical distribution sector. In the context of stimulating competition through government support for generic medicines and the online distribution of medicines, the authority intends to examine each level in the medicine distribution chain to decide whether it is truly competitive.

An article published by specialist healthcare news website Actusoins has revealed data breaches at several French hospitals and clinics, demonstrating that such incidents can occur even in a highly regulated jurisdiction. France is one of the only countries in Europe to require that health data be stored only with hosting providers approved by the French government. In spite of these precautions, compliance appears to be lax.

Information Technology

France

Personal data processing in France is supervised by the National Commission for Data Processing and Liberties. French law requires that a declaration of any planned processing of personal data must be made to the commission for its approval. The law also establishes other legal rights and requirements for the storage, collection and disposal of personal data.

Intellectual Property

European Union

Overview
Including: Trademarks; Designs; Patents; Copyright.

The European Commission has announced the reform of the European trademark regime, amending both the EU Trademarks Directive and the EU Community Trademark Regulation. One of the key issues dealt with by the proposals relates to goods in transit. The main aim of the reform is to promote innovation and economic growth by making the trademark system more accessible, more efficient and less expensive.

France

There have recently been new developments regarding the ongoing copyright levies saga. The Constitutional Court and the Private Copy Commission have issued new decisions which, while providing useful clarification, are unlikely to bring the heated debates on this issue to a close. Meanwhile, an in-depth review of the system is under consideration and expert reports are currently in the pipeline.

In a much-anticipated decision the Paris Court of Appeal ruled on the author rights of designs for jewellery created by an employee designer during his employment at jewellery firm Van Cleef & Arpels. The court applied the doctrine of collective works provided by French copyright law in author rights.

In a recent case the Paris Court of Appeal considered the liability of a registry and a registrar for the registration of domain names that allegedly infringed trademarks. The decision should help to prevent any future rulings finding the '.fr' registry liable in such cases and serves as a reminder that trademark holders can utilise other fast and cost-effective alternatives for recovery of a domain name.

The Supreme Court has cancelled Christian Louboutin's trademark - representing a red sole - for lack of distinctiveness. Louboutin initiated proceedings after a collection of women's shoes featuring red soles was launched by high-street retailer Zara. However, the court stated that the reputation of Louboutin's red shoe soles related merely to a concept, rather than to the trademark.

The Versailles Court of Appeal has decided that while a domain name without a supporting trademark can be protected under the rules of unfair competition, it must be sufficiently distinctive. This decision clearly articulates the principle applicable to the protection of domain names under French law – namely, that they can be protected alone under the rules of unfair competition provided that they are distinctive.

A recent Supreme Court case dealt with the digitalisation of photographs by a press agency without the photographer's express authorisation. The Paris Court of Appeal had found that the digitalisation of the photographs constituted an unauthorised act of reproduction, but the Supreme Court overturned this decision.

More updates >

Product Liability

European Union

The EU Cosmetics Products Regulation, which is scheduled to enter into force in 2013, explicitly regulates the use of nanomaterials and acknowledges the uncertainties regarding their hazardous properties. As the cosmetics industry is one of the highest-level users of nanomaterials, cosmetics companies should begin adapting their chain of production and supply to deal with the obligations set down in the regulation.

The absence of specific regulations on natural and organic cosmetics and the disparity between private standards and administrative interpretations create uncertainty for European cosmetics manufacturers. Stakeholders should check the conditions of use for making claims in each country and adapt the composition of products or their marketing accordingly.

France

Unlike in many countries where public health and safety issues are monitored by the government, in France public health and safety issues are monitored by specific agencies known as 'safety agencies' – that is, public bodies that are distinct from the government which have a public service mission. The Commission on Social Affairs recently published a report on these safety agencies.

Cosmetics law will soon change significantly in all EU member states with the introduction of the EU Cosmetic Products Regulation, and the industry is already under pressure to prepare for its entry into force. In France, cosmetics manufacturers face additional pressures in the form of calls to control the labelling of products that claim to offer 'added value' and to focus more on product safety.

Including: Legislation; Authority; Liability: Adoption of tougher controls.

In early 2010 a new safety agency was created: the Agency for Food, Environmental and Occupational Health and Safety (ANSES). ANSES is a public administrative body whose main task is to protect human health from environmental threats, including threats created by products. One-and-a-half years since ANSES's creation, it is time to review its missions, powers and position among the other French safety agencies.

In light of the significant impact of the recent earthquake and tsunami in Japan, products imported from Japan represent a potential source of risk for the French authorities. The most urgent area for consideration is the import of food products, which are particularly sensitive to radioactivity.

In its first ruling on the issue of recognition of a foreign judgment in France, the Supreme Court held that "the principle of an order to pay punitive damages is not, in itself, contrary to public policy". However, the court upheld the non-recognition of the foreign judgment, as the amount awarded to the plaintiff was disproportionate to the loss and the breaches of the defendant's contractual obligations.

More updates >

Securitisation & Structured Finance

European Union

Recent amendments to EU Directive 2006/48/EC require banks to keep on their balance sheet 5% of the receivables they transfer to securitization vehicles. This requirement is expected to boost the securitization market, which has suffered during the economic crisis, and to help to ensure the market's survival.

France

In three different rulings the Paris Court of Appeal has issued a final judgment - at least for the time being - in Coeur Défense. Given the creditor-friendly nature of the court's rulings, they will be welcomed by participants in the real estate and structured finance markets.

France is examining the creation of a new refinancing instrument for banks: covered bonds based on guaranteed loans instead of mortgages. The draft on the new refinancing instrument is due to be submitted to Parliament in early 2010 and the first issue of covered bonds backed by guaranteed loans is expected in the second quarter of 2010.

Two landmark developments in securitization and structured finance have recently taken place: an attempt at introducing provisions to facilitate Islamic finance - in particular, sukuk - and developments in litigation concerning commercial mortgage-backed securities.

The government is looking to enhance Islamic finance and more specifically the issue of sukuk (Islamic asset-backed securities). France has already taken steps in favour of Islamic finance - the stock exchange regulator has published a recommendation on the listing of sukuk on Euronext Paris regarding the set-up and distribution of Islamic financial products, such as Sharia-compliant collective investment schemes.

The government has made revisions to the securitization legislation which set out to amend the law governing the activities and supervision of reinsurance companies and to reform the legal framework of the French mutual debt fund by providing greater security to securitization transactions, increasing flexibility and transparency and creating a new enlarged French securitization vehicle.

Following Ordinance 2008-556, dated June 13 2008 and implementing the EU Reinsurance Directive, Decree 2008-711 was adopted on July 17 2008. It reforms the legal framework of the French special purpose securitization vehicle, the former debt mutual fund (fonds commun de créances).

More updates >

Shipping & Transport

France

On December 12 1999 the Erika, an oil tanker carrying over 30,000 tonnes of toxic fuel, split in half and sank in the Gascogne Gulf, 30 nautical miles from West Brittany in France. After seven years of investigations, a 13-week trial and seven months of deliberation, the Paris Criminal Court issued a decision recently which will likely have a significant impact beyond marine law.

Telecommunications

France

Overview
Including: Market History; Operators; Licences; Regulatory Authority; Interconnection Regime; Consumer Protection; Competition in the Local Market; Internet Access

The French Telecoms Regulatory Authority has extended the commercial launch and population coverage deadlines for universal mobile telecommunications system services, after operators failed to meet previous targets. In addition, global system for mobile communications operators have agreed licence renewal terms with the government.

The Telecommunications Regulatory Authority has adopted certain guidelines that will apply to electronic communications networks and services until legislation is passed to implement the EU telecommunications directives. The guidelines have established a system of declaration rather than authorization, and have simplified the procedure for making preliminary declarations.

Operators recently began marketing mobile number portability services. Meanwhile, the Telecommunications Regulatory Authority has announced that its calculation of universal service overpayments made by operators totals approximately €2 billion. It has also settled a dispute between France Télécom and new entrants over the fixing of call termination charges.

The Telecommunications Ministry has approved the liberalization of wireless networks which use the 2.4 gigahertz radio frequency band, following demand for the launch of wireless fidelity services. Licensed operators and service providers will now be able to install wireless access points without prior approval from the French Telecommunications Regulatory Authority.

Following a proposal to assist the development of broadband internet access in economically weak regions, the government will allow local authorities to roll out telecommunications networks and function as telecommunications operators. Legislation must be drafted to amend existing prohibitions against public bodies acting as telecommunications operators.

On October 24 2002 the French Telecommunications Authority approved the new call termination charges applicable to SFR’s and Orange's mobile networks (the two French mobile operators deemed to have significant market power) for 2003. The new tariffs are expected to lower the call termination charges on these networks by 15%.

More updates >