France has become the first country to transpose the EU’s CSRD into national law and has chosen to apply strict penalties for those who do not properly audit their CSRD reports. CSO Futures reports that the French version of the CSRD comes with potential criminal liability for Directors. The article states that:
“Corporate directors could be forced to pay up to €75,000 and go to jail for up to five years if they do not present the information necessary for external auditors to certify their CSRD-aligned reports, or if they obstruct their work in any way. On the other hand, they could face two years of jail time and up to €30,000 in fines for simply failing to get their CSRD report audited by a certified entity.”
The CSRD is a directive from the EU government, so certain areas are open for individual member states to transpose as they wish. Penalties for non-compliance were not defined in the directive, so a patchwork of regulatory enforcement structures is likely. The inclusion of criminal penalties goes to show just how serious France is about CSRD reporting. The decision to include criminal penalties is reminiscent of Canada’s S-211 forced labor disclosures law, which also carries criminal penalties for directors and officers in specific cases. As more EU countries transpose the law, we’ll see if France’s penalties are the standard or an outlier.
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