The French 1968 Blocking Act: a shield against foreign interference and extraterritorial legislation

The so-called “Blocking Act” of 1968, modernised in 1980 and implemented in 2022, enables French companies to counter the interference of foreign authorities seeking to seize sensitive informations affecting the nation’s interests, including its essential economic interests, during investigations.

In particular, it prohibits French companies from communicating to foreign public authorities documents or information of an economic, commercial, industrial, financial, or technical nature, which would be likely to undermine France’s sovereignty, security, essential economic interests, or public order, and obliges foreign authorities to comply with international legal or administrative assistance procedures.

Any breach of the prohibition is punishable by:

• Imprisonment for six months and/or
• A fine of 18,000 euros

1. Updating the 1968 law

In response to increasing foreign interference with sensitive data and the use of laws with extraterritorial reach, the 1968 law was the subject of parliamentary and governmental debate. Following a parliamentary report on 26 June 2019 highlighting its shortcomings, the Ministry of the Economy and Finance published an implementing decree and order in 2022 aimed at modernising and improving its provisions.

In practice, the law did not allow French companies to justify to foreign judicial authorities the absence of disclosure of documents during transnational proceedings. Indeed, the lack of implementation and the weakness of the sanctions discredited this instrument. It was therefore necessary to strengthen the protection of French companies against foreign judicial investigations, particularly from the United States, due to the extraterritorial scope of financial sanctions.

• In practical terms, the new version of the legislation now allows French companies to apply to a single authority, the Strategic Information and Economic Security Department (SISSE) of the Directorate General for Enterprise (DGE), in the event of a foreign disclosure request.

• The new wording requires all persons to inform the SISSE without delay of any request for the disclosure of documents. The person concerned must then compile a file “as soon as possible” containing information identifying the company holding the data (company registration number, organisation chart, activities, and competitors) and the reasons for the request for disclosure (contact details of the requesting party, exchanges).

2. Recommendations for French companies

The purpose of the “Guide for the use of companies in identifying sensitive data, as referred to in Article 1 of the so-called blocking or referral law” is to assist French companies in their efforts to identify sensitive data, and to specify the procedures for contacting SISSE.

1. a) Identifying sensitive data

The guide proposes a three-stage procedure for identifying sensitive data, as defined in Article 1 of the 1968 Act:

• Firstly, identify potentially sensitive economic, commercial, industrial, financial, or technical data;

• Secondly, identify “sensitive company data”: the sensitivity of data is assessed in terms of its confidentiality, availability, and integrity. In other words, data is said to be “sensitive” if its disclosure, unavailability, or alteration would be detrimental to the company holding it;

• Thirdly, identifying “sovereign sensitive” data involves assessing, with reference to a set of indicators, the potential harm of disclosing the data and the strategic nature of the company. The strategic nature of a company is assessed based on its business activity. For example, if it is linked to the defense sector or is listed in the Monetary and Financial Code. Indicators such as the company’s independence from foreign powers and its contribution to the national and local economy may also be taken into consideration.

1. b) Approaching the SISSE

With regards to the steps to be taken by French companies, the guide recommends that they seek advice from the SISSE, independently of any current case. The DGE department will then contact the relevant ministries. The aim of this assistance is to encourage French companies in seeking and obtaining sufficient information upstream to ensure compliance.

• Following such an approach, SISSE will be able to assess the risks of the request for disclosure of sensitive data and then advise the company on how to protect itself in the face of a foreign judicial body. SISSE could, for example, add to the file a presentation of the 1968 Act and a non-binding legal opinion on its applicability. As a last resort, SISSE may request by letter the assistance of an independent commissioner or a diplomatic agent for the purpose of executing an investigative act in France formulated by a foreign judge, in order to filter the communication of data.

• In the event of requests from foreign courts to French companies, the SISSE is competent to apply directly to the Ministry of Justice to verify the applicability of the Act, and thus prevent companies from disclosing their data.

Ultimately, the 2022 amendments to the 1968 Act are designed to strengthen France’s legislative arsenal against laws with extraterritorial reach. French companies now have an administrative authority dedicated to protecting sensitive data. The updating of the 1968 Act, which had fallen into disuse, reflects a political desire for the return of the strategic State, in a world marked using the law as a weapon of economic warfare.

Our export control lawyers are at your disposal to help you incorporate these new legal provisions into the arsenal of available legal tools and integrate them into your procedures, training, and best practices.

Paris, June 1^st, 2023.

[1] Loi n° 68-678 du 26 juillet 1968

[2] Article 1 de la Loi n° 68-678 du 26 juillet 1968

[3] Article 1bis de la Loi n° 68-678 du 26 juillet 1968

[4] Article 3 de la Loi n° 68-678 du 26 juillet 1968

[5] Gauvain, R., Rétablir la souveraineté de la France et de l’Europe et protéger nos entreprises des lois et mesures à portée extraterritoriale, Rapport à la demande du Premier Ministre Monsieur Edouard Philippe, Assemblée nationale, juin 2019, 102 p

[6] Décret n°2022-207 du 18 février 2022 relatif à la communication de documents et renseignements d’ordre économique, commercial, industriel, financier ou technique à des personnes physiques ou morales étrangères

[7] Arrêté du 07 mars 2022 relatif à la communication de documents et renseignements d’ordre économique, commercial, industriel, financier ou technique à des personnes physiques ou morales étrangères

[8] Article 2 du Décret n° 2022-207 du 18 février 2022

[9] Dirigeant, représentant, agent ou préposé de la personne morale

[10] Article 1 de l’Arrêté du 7 mars 2022

[11] Rédaction conjointe de l’AFEP/MEDEF et du SISSE (en ligne)

[12] Article R1332-2 du Code de la défense

[13] Article R151-3 du Code monétaire et financier

[14] Guichet unique pour le SISSE : loi.deblocage@finances.gouv.fr