Document production under the lens: the return of the French blocking statute?
Every now and then, references to the French “Loi de Blocage” (Blocking Statute) are made in the context of discovery or disclosure proceedings in the US or UK involving parties or documents located in France in order to question the right to access evidence from such parties. The suggestion usually does not last long and is quickly dismissed by someone remembering that the hurdle of the Blocking Statute is in fact purely theoretical given a near complete lack of enforcement in France - but beware, French lawmakers recently sought to revamp the Blocking Statute. Is it the start of a new era?
What is the Blocking Statute?
The Blocking Statute was first enacted in 1968,  and was primarily designed to counteract the United States’ broad discovery rules. As a criminal statute, it introduced a set of rules prohibiting French nationals, residents or directors of French companies from disclosing sensitive evidence to foreign authorities, or asking for such sensitive information to establish evidence to be used in foreign proceedings. Failure to comply with this prohibition was made punishable by up to six months’ imprisonment and a EUR18,000 fine.
As a result, French parties involved in foreign litigation, acutely aware of the court sanctions they may face in the foreign proceedings for not complying with a court order, used to face a dilemma. Should they comply with the disclosure order and possibly expose themselves (or their directors) to prosecution in France, or should they comply with the provisions of the Blocking Statute, but risk facing court sanctions or jeopardizing their interest in foreign proceedings?
The French Blocking Statute has however proven to be little of a threat, with very little enforcement in France,  and foreign courts usually considering that the provisions of the statute could be disregarded. Indeed, in a landmark ruling dated 1987,  the US Supreme Court held that the Blocking Statute "does not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute" and that "American courts are not required to adhere blindly to the directives of such a statute".
Furthermore, foreign disclosure remained possible pursuant to international agreements or treaties, and in particular the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970. The latter provides a framework for cross-border communication of documents, and therefore access to foreign evidence.
Reviving the Blocking Statute?
Over the years, several regulations involving extraterritoriality issues came into play that also impact disclosure of evidence by French entities in foreign proceedings: for instance at French and EU levels, the French Sapin 2 Law  created the Agence française anticorruption in 2016 and entrusted it with ensuring compliance with the Blocking Statute, and a specific legislation to protect trade secrets was adopted in 2018,  implementing EU Directive 2016/943. Article 48 of the General Data Protection Regulation  also regulates the transfer of data outside of the EU, including to foreign courts and regulatory or administrative authorities.
In 2019, French MP Raphaël Gauvain  called for the strengthening of the Blocking Statute, both in terms of process as well as sanctions. The reform of the process was ultimately implemented in France earlier this year with an amendment to the Blocking Statute passed in February 2022, introducing certain measures and clarifications on the reporting obligations incumbent on French parties involved in foreign litigation.
Since 1 April 2022, a designated department within the French Ministry of Finance, namely the Strategic Intelligence and Economic Security Service (SISSE) must assist French companies receiving discovery demands or requests from foreign authorities to disclose sensitive and strategic information. Targeted companies are required to inform the SISSE of any request for foreign disclosure and provide certain information regarding their operations, activities and competitors as well as background on the proceedings and request for evidence. The SISSE will then issue an opinion, involving as need be other relevant French authorities, to confirm the applicability – or not – of the Blocking Statute’s provisions. The opinion should be provided within one month from the request, and could then be used before foreign courts if disputes arise regarding the disclosure of evidence.
The SISSE would therefore become a one-stop shop for French parties involved in foreign proceedings and required to disclose evidence. But does this apply equally to any evidence in any set of foreign proceedings?
Qualifying ‘sensitive evidence’
On 16 March 2022, the SISSE published further guidance  designed to assist French companies in understanding and determining what information may fall within the scope of the Blocking Statute. The key question which remains relates to the nature of the evidence falling in the scope of the Blocking Statute and what constitutes ‘sensitive’ information.
Indeed, it was historically defined as documents or information of an economic, commercial, industrial, financial or technical nature, the communication of which is likely to infringe France’s sovereignty, security, essential economic interests or public order. What it meant in practice however remained unclear, and was subject to self-assessment.
Based on the SISSE’s guidance, there are in fact (at least) two levels of sensitivity: for the disclosing party, or for the French state.
The SISSE indicated that ‘corporate sensitivity’ may be characterised by the confidential nature or required protection surrounding certain information. Information which if disclosed may cause major or serious harm to the disclosing party, because of its mere disclosure, or because it may render the information unavailable or alter it, is likely to be considered sensitive information for the company. This would be for instance commercial databases, information about a planned undisclosed merger, R&D data, software or algorithms, information relating to IP rights or patents.
By contrast, ‘sovereign sensitivity’ should be analysed by reference to both the harm that may be caused and the strategic nature of the disclosing party or the sector in which it operates. Indeed, certain companies are more likely than others to be considered strategic, one would think about the defence industry. Based on the SISSE classification, ‘sovereign sensitivity’ would only apply in the case of harm caused to the disclosing party as well as where there would be extremely important and long-term impacting consequences of the disclosure that may jeopardise sovereignty, independence or French economic interests and affect public order.
French parties involved in foreign litigation should add consideration of any impact of the Blocking Statute to their litigation checklist, both in terms of compliance and litigation strategy. Similarly, non-French parties involved in litigation outside France against French parties will also need to be aware of the revision of the French legislation, which could be used as a shield to avoid or delay disclosure.
As the reshuffle of the Blocking Statute and subsequent guidance are very new, many questions remain. It is unclear what the level of compliance will be with the requirement to report to the SISSE, and it remains to be seen whether French courts will be active in pursuing alleged violations of the Blocking Statute. It is also unclear how foreign courts will respond to attempts to invoke the amended French law.
 French law No. 68-678 of 26 July 1968, as amended by law No. 80-538 of 16 July 1980
 French courts have only enforced it once, resulting in a EUR10,000 fine
 Société Nationale Industrielle Aérospatiale v. U.S. District Court for the Southern District of Iowa, 482 U.S. 522 (1987)
 French law No. 2016-1691 of 9 December 2016
 French law n°2018-670 of 30 July 2018, decree n° 2018-1126 11 December 2018
 Regulation (EU) 2016/679 (General Data Protection Regulation)
 Report to the Prime Minister, Rétablir la souveraineté de la France et de l'Europe et protéger nos entreprises des lois et mesures à portée extraterritoriale, 26 June 2019 (Gauvain report)
 French decree No. 2022-207 of 18 February 2022, Order of 7 March 2022
 https://sisse.entreprises.gouv.fr/files_sisse/files/outils/guide/guide-identification-donnees-sensibles.pdf (in French)