Law 2019-744 of 19 July 2019 seeks to simplify and update wide-ranging aspects of company law. The measures include changes to the approval process that public limited companies must follow in order to issue, in favour of a third party, a guarantee of the obligations of a subsidiary that they control. These changes aim to enable foreign subsidiaries of French companies to respond more quickly to international tender processes.
The Commercial Division of the Supreme Court has clarified how an assignment of business receivables, known as a 'Dailly assignment', operates. Through this decision, the Supreme Court has reinforced the effectiveness of the Dailly assignment mechanism by giving full effect to the assigned debtor's actual knowledge of the assignment and by giving no effect to contractual provisions that restrict assignment.
The new law on the duty of vigilance for parent companies and principal contractors aims to improve the accountability of multinational companies, prevent serious incidents in France and abroad and allow parties to obtain compensation for losses which they suffer as a consequence of non-compliance. To achieve these aims, the law requires companies to draft an awareness plan and implement a monitoring and whistleblowing system. It also introduces penalties for non-compliance.
The Sapin II Law aims to support transparency, modernise business activity and combat corruption. It introduces measures to regulate executive pay in listed companies, simplify company law and modernise bond issues. Among other things, it has simplified the procedure for contributions of goodwill, abolished the prior authorisation requirement for certain transactions and simplified the procedure for issuing bonds.
The government recently adopted Ministerial Order 2019-75, which aims to ensure that International Swap Derivatives Association-type master agreements on financial services continue to be used. To enable EU clients to pursue their existing contractual relationships after a no-deal Brexit, the order offers a simplified method of replicating a master agreement with an EU entity that belongs to the same group of companies as the UK financial institution with which that client had an existing contractual relationship.
In January 2019 France passed Act 2019-75, which authorised the government to take measures to prepare for the United Kingdom's departure from the European Union without a deal by way of ministerial orders, particularly in the area of financial services. Subsequently, in February 2019 the government adopted a ministerial order which, among other things, aims to ensure that International Swaps and Derivatives Association-type master agreements on financial services continue to be used.
Articles 59 and 60 of Law 2016-1691 (the Sapin II Law) on transparency, anti-corruption and the modernisation of economic life established a system of immunity from the execution of civil judgments on property in France which is owned by foreign states. The main purpose of this aspect of the Sapin II Law is to limit the risk of litigation arising from seizures or attachments of property belonging to foreign states.