New Measures Voted by Parliament
- PARIS (AP) — French parliamentarians have definitively approved legislation aimed at combating fraud related to public assistance programs.
- The law establishes a system for temporarily suspending the allocation or payment of public aid when fraud is suspected.
- Thomas Cazenave, a rapporteur for the National Assembly, stated that this mechanism is crucial for public aid programs lacking a secure framework.
France Tightens Grip on Public Aid Fraud with New Law
Table of Contents
- France Tightens Grip on Public Aid Fraud with New Law
- France Tightens Grip on Public Aid Fraud: A Q&A
- What is the new French law about combating public aid fraud?
- What are the main measures included in the new law?
- How does the law address the suspension of public aid for suspected fraud?
- What are the changes in penalties for organized fraud?
- Who is affected by the fine for non-registration with the National Business Register (RNE)?
- How does the law affect auditors (CACs)?
- When will these measures come into effect?
- key Takeaways: A Summary
PARIS (AP) — French parliamentarians have definitively approved legislation aimed at combating fraud related to public assistance programs. The new law, adopted May 21, 2025, introduces measures including the suspension of aid in cases of suspected fraud, financial penalties for businesses failing to register with the national registry, and the lifting of professional secrecy for auditors in certain circumstances.
Suspension of Aid for Suspected Fraud
The law establishes a system for temporarily suspending the allocation or payment of public aid when fraud is suspected. This authority rests with agents responsible for the “instruction, allocation, management, control, or payment” of such aid. Suspicion of fraud is defined as the presence of “serious indications of deliberate failure or fraudulent maneuvers” intended to improperly obtain public assistance.
Thomas Cazenave, a rapporteur for the National Assembly, stated that this mechanism is crucial for public aid programs lacking a secure framework.
The suspension period is capped at three months but can be renewed for an additional three months if new evidence of fraudulent activity emerges. Authorities can also reject aid applications or payments if fraud is proven, possibly leading to the withdrawal of previously granted aid. Further details will be outlined in a forthcoming decree.
Increased penalties for Organized Fraud
The legislation increases the penalties for obtaining public aid through organized fraud. Sentences can now reach up to 15 years in prison and a fine of 1 million euros, up from the previous maximum of 10 years and a 1 million euro fine.These enhanced penalties target scams that prejudice public entities, social protection organizations, or entities responsible for public service missions.
Cazenave argues that this change elevates the offense of public finance swindle committed by organized groups to a level commensurate with the severity of the crime.
Fine for Non-Registration with National Business Register
A 7,500 euro administrative fine will be levied against commercial, craft, or independent companies that fail to register with the National Business Register (RNE). The RNE consolidates facts on companies operating in France, making it publicly available as open data.
parliamentarians emphasize that this measure reinstates the offense of failing to register with the RNE. A Senate report suggests that a lack of registration frequently enough indicates fraudulent behavior, as individuals seeking to avoid registration may lack the necesary qualifications or be subject to management prohibitions.
the penalty will apply to all those required to register, with an exception for farmers due to the specific nature of thier activities.
Auditor Dialogue Obligations Expanded
the law expands the communication obligations of auditors (CACs) by lifting professional secrecy within the context of investigations by the General Inspectorate of Finance (IGF). CACs of entities under IGF review must grant the IGF access to information and documents relevant to the management of services and organizations under their control.
This measure aims to bolster the management’s ability to combat fraud against public aid programs.
Auditors who refuse to comply with this communication obligation may be ordered by the IGF to do so within a minimum of 72 hours. Failure to comply within this timeframe could result in a daily penalty of up to 1,000 euros, proportionate to the severity of the non-compliance.
Effective Date
Unless otherwise specified, these measures will take effect the day after their publication in the Official Journal.
France Tightens Grip on Public Aid Fraud: A Q&A
What is the new French law about combating public aid fraud?
The French parliament has approved a new law designed to crack down on fraud related to public assistance programs. Adopted on May 21, 2025, the law introduces several key measures to prevent and punish fraudulent activities.
What are the main measures included in the new law?
The new law focuses on several key areas:
- Suspension of Aid: Temporarily stopping aid payments when fraud is suspected.
- Increased Penalties: Implementing tougher penalties for organized fraud.
- Fines for Non-Registration: Imposing financial penalties on businesses that fail to register with the National Business Register.
- Expanded Auditor Obligations: Extending the communication duties of auditors to facilitate investigations.
How does the law address the suspension of public aid for suspected fraud?
The law allows for the temporary suspension of public aid when fraud is suspected. This applies to the allocation or payment of aid. authorities responsible for the “instruction, allocation, management, control, or payment” of aid can initiate the suspension. The suspicion of fraud is based on “serious indications of deliberate failure or fraudulent maneuvers” aimed at improperly obtaining public assistance. A rapporteur for the National Assembly, Thomas Cazenave, highlighted the importance of this mechanism as it strengthens the security of public aid programs.
How long can aid be suspended?
The suspension period is initially capped at three months. Though, it can be renewed for an additional three months if new evidence of fraudulent activity emerges.
What happens if fraud is proven?
If fraud is proven, authorities can reject aid applications or payments. Additionally,previously granted aid may be withdrawn. Further details regarding implementation will be outlined in a forthcoming decree.
What are the changes in penalties for organized fraud?
The legislation considerably increases the penalties for organized fraud related to public aid. Sentences can now reach up to 15 years in prison, with a fine of up to 1 million euros. Previously, the maximum sentence was 10 years in prison and a 1 million euro fine. These enhanced penalties target scams that harm public entities, social protection organizations, or entities responsible for public service missions.
Why were the penalties increased?
According to Thomas Cazenave, the increase in penalties elevates the offense of public finance swindle committed by organized groups to a level more appropriate for the severity of the crime.
Who is affected by the fine for non-registration with the National Business Register (RNE)?
Commercial,craft,or independent companies that fail to register with the National Business Register (RNE) will face a 7,500 euro administrative fine. The RNE compiles information on companies operating in France and makes it publicly available as open data.
What is the purpose of the National Business Register (RNE)?
The RNE consolidates essential facts on companies operating in France. This public access to information aids in openness and helps to prevent fraudulent activities.
Are ther any exceptions to the fine for non-registration?
Yes, farmers are exempt from the fine due to the specific nature of their activities.
How does the law affect auditors (CACs)?
The law expands the communication obligations of auditors (Commissaires aux comptes, or CACs) by lifting professional secrecy in the context of investigations by the General Inspectorate of finance (IGF). CACs of entities under IGF review must provide the IGF with access to information and documents related to the management of services and organizations under their control. This is intended to strengthen the ability to combat fraud against public aid programs.
What happens if an auditor refuses to comply with the communication obligation?
auditors who refuse to comply may be ordered by the IGF to do so within a minimum of 72 hours. Failure to comply within this timeframe could result in a daily penalty of up to 1,000 euros, proportionate to the severity of the non-compliance.
When will these measures come into effect?
Unless otherwise specified, the measures will take effect the day after their publication in the Official Journal.
key Takeaways: A Summary
This table offers a concise overview of the new law’s primary changes.
| Measure | Description | impact |
|---|---|---|
| Suspension of aid | Temporary halting of aid payments when fraud is suspected. | Preventing further fraudulent disbursements. |
| Organized Fraud Penalties | Increased sentences (up to 15 years) and fines (up to 1 million euros). | Deterring and punishing large-scale fraud. |
| Non-registration Fines | 7,500 euro fine for failure to register with the RNE. | Encouraging business transparency and compliance. |
| Auditor Obligations | Lifting professional secrecy for auditor cooperation with IGF investigations. | Facilitating fraud detection and prevention. |