Overseas Business Risk – France
Political and Economic
Although the French economy initially showed greater resilience to the 2009 downturn than many comparable economies and even began to recover gradually in 2010, GDP fell to .0.2% in 2012 and growth is forecast at 0.4% for 2013, Trade remains a major structural weakness of the French economy. The visible trade deficit reached an all-time high of € 70 billion (3.5% of GDP) in 2011. High oil prices and the inadequacy of domestic supply have increased imports, while the strong euro, low penetration rates in emerging economies and falling competitiveness have undermined exports. At EU level, France supports reciprocity between the EU and third countries. Business and consumer confidence remain low. Investment by firms has been moving erratically in recent quarters. Household consumption remains low, as energy-led inflation undermines purchasing power and unemployment approaches 10%.
The government recently reaffirmed commitment to reform by implementing measures to strengthen business competitiveness, including tax cuts (eg a generous research tax credit and cuts in local business rates) and more flexibility in working time legislation. It also launched a € 35 billion investment programme focusing on higher education and research, industry and SMEs, the digital economy and sustainable development. The President, François Hollande introduced new banking regulations in December 2012 and hopes to make SMEs a key lever of growth through a ‘productivity pact’.
The crisis has strongly deteriorated France’s fiscal position. The general government deficit reached a record high of 7.5% of GDP in 2009, well above the 3% Maastricht ceiling. The debt ratio was forecast to peak at 89.2% in 2013. France’s fiscal position has raised investor concern, causing a rating agency to downgrade its sovereign debt. The government committed to bring the deficit down to 3% by 2013 by tightening expenditure and raising tax and the aim of the last budget is to recuperate £23.9bn which is France’s toughest single attempt at economy in 30 years. The government also recently confirmed a temporary 75% super-tax rate for earnings over one million euros and a new 45% band for revenues over €150,000. These measures have provoked some public departures by high status French citizens.
The right to strike is protected by the Constitution. There is no restriction on the right to strike, outside of key public services, apart from minimum service in the transport industry. Striking is regarded as acceptable action by many French state workers and the right is regularly exercised in many domaines – education , hospitals, national radio etc.
France has similar levels of gender equality as the UK. A Ministry of Women’s Rights was re-established by the Hollande administration on taking office in 2012.
Racial hatred and hate crimes are banned and the police enforce the law. France is a secular country and the state neither recognises nor funds any religious group. The government is currently putting legislation to parliament to extend the right to marry and adopt children to gay couples which is meeting stiff opposition from the Catholic church.
France is a member of ILO and transposes all the directives. France is a founding member of the Council of Europe and subject to the jurisdiction of the European Court of Human Rights (which is based in Strasbourg).
Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
According to Transparency International’s Corruption Perceptions Index, France ranked 22nd in 2012, (Denmark was 1st – least corrupt; Somalia was 178th – most corrupt; UK was 17th.).
Like other large European countries, the French authorities continue to consider that there is a high threat of terrorism. Attacks could be indiscriminate, including in places frequented by expatriates and foreign travellers.
France operates a five level, colour-coded system to alert the public to the threat of terrorist operations on French territory known as Vigipirate. Level Zero – White – denotes the absence of any indication of a threat, whilst Level Four – Scarlet – denotes a certain threat. Vigipirate is currently at Level 3 – Red – denoting a probable threat. Recent French military action in Mali and Somalia have triggered fears of a backlash by militants in France.
The Government has also established a plan, Piranet, to deal with the threat of a cyberattack and carried out a major exercise to test arrangements for crisis management in such conditions in June 2010.
There is strong co-operation between the British and French authorities in the effort to combat terrorist
Protective Security Advice
Take precautions against street and car crime. Avoid having your passports, credit cards and valuables in the same place.
Guard your baggage against theft and beware of pickpockets at all times. Thieves and pickpockets operate on the Paris underground and RER lines. There have been several victims of serious assault recently on the RER line B, which serves Charles de Gaulle airport, Orly airport and Gare du Nord.
There have been a number of explosions, failed explosions and other attacks in recent years in Corsica. Government buildings, restaurants, police vehicles, bars, a discotheque and a number of holiday homes have been targeted and, in some cases, substantially damaged. In the main these buildings were closed or unoccupied at the time of the attacks, but there have been fatalities. The authorities, who have previously warned that attacks might escalate, believe that the Corsican nationalist group, the FLNC, are responsible.
IP rights are territorial ie they only give protection in the countries where they are granted or registered. There is no single European patent; a European patent is a "bundle" of individual national patents. If you are thinking about trading internationally, then you should consider registering your IP rights in your export markets.
For information on registering your intellectual property in France, you should contact:
L’Institut Nationale de Propriete Industrielle
26 bis, rue de Saint-Petersbourg
75800 Paris Cedex 08
L’Office central de lutte contre le crime organisé (Central Office for the Fight against Organised Crime) in the French Interior Ministry coordinates efforts to track down and eliminate organised crime in France.