CJIP with Exclusive Networks: analysis of a slippery slope…

On June 16, 2025, a deferred prosecution agreement (CJIP) was reached between the National Financial Prosecutor’s Office and Exclusive Networks Corporate SAS as part of an investigation into bribery of foreign public officials and private-sector corruption.
Result: €16.07 million fine et 3 ans de compliance program under AFA oversight. A case that illustrates the typical risk scenario of marketing funds in indirect sales

Les faits, survenus entre 2016 et 2022, concernent la distribution de solutions IT (cybersecurity) in South and Southeast Asia and India.

The origin of this case: an internal whistleblowing report from 2021, revealing payments made between 2016 and 2022 by several group subsidiaries in Southeast Asia and Southeast Asia and India to contractual partners.

This case illustrates the risk of misuse of “co-marketing funds” or “marketing development funds” (MDF) paid to resellers, distributors or partners in an indirect sales model. This scenario is identified for over 15 years by the DOJ (Department of Justice) et la SEC (Securities and Exchange Commission) in numerous proceedings targeting, in particular, technology companies: it remains relevant today.

From commercial practice to prosecution pour corruption…. Voici notre analyse de cette pente glissante !

  1. A business practice that has proven its relevance

In indirect sales, the manufacturer co-finances marketing activities carried out by the reseller partner : trade shows, digital campaigns, client tours, etc. The partner closest to the field engages funds more effectively and handles the complexity of execution. The model is win-win and is notably at the heart of US tech success stories.

  1. The beginning of the slippery slope

Gradually, marketing services are no longer truly required as long as sales targets are met. MDFs become a covert means of improving the partner’s margin without officially lowering prices. At this stage, it is already accounting fraud since the funds should be recorded as rebates rather than expenses. Management’s view of the company’s performance is distorted.

  1. Loss of control

Once the consideration is regarded by everyone as fictitious mais « it’s normal in this business », it becomes all too easy to divert the funds :

  • Fraud by the employee in collusion with the partner,
  • Or, worse, the creation of slush funds intended for bribes.
    The mechanism is well-known and normalized within sales teams car « it’s the partner’s responsibility »

Need to circumvent a gift threshold, invite a decision-maker on a dream trip ? All you have to do is create a co-marketing invoice – nobody cares about the reality of these expenses anymore. The MDFs are then converted by the partner into airline tickets, entertainment, cash, etc.

  1. Knock, knock, this is a raid

Authorities (DOJ, PNF, SFO) – or internal audit – demand proof of past marketing expenses. If they cannot directly prove corruption, they will attack from the angle of false financial statements.

  • Accountant : « We paid on a compliant invoice with the sales representative’s payment approval. »
  • Sales Rep : “I don’t keep emails from that period, If I gave my approval to pay it’s because the partner told me they carried out the agreed marketing activities, that’s their problem. None of this is my concern. »

Moral : In companies that have had to follow compliance program, programs, these processes are identified in the risk maps and governed by specific accounting controls to always be able to ‘follow the money’ – i.e., justify the final use of funds disbursed by the company. The most mature companies manage to ensure this traceability. Some of our clients have successfully implemented these measures.

 Other points of interest in this CJIP

  • Aggravating vs. mitigating factors: the National Financial Prosecutor’s (PNF) grid
  • Aggravating factors: size of the group, recurrence of the facts, inadequacy of the compliance program, creation of concealment tools.
  • Mitigating factors: corrective measures, internal investigations relevant investigations, active cooperation, effectiveness of the whistleblowing system, acknowledgment of facts.

Understanding this balance helps prioritize corrective actions before a crisis erupts.

  • The failure of governance which identified and did everything right but failed to stop bad practices on the ground
  • The report to the PNF, filed by a compliance officer

Learn more :
-> View the signed CJIP : https://www.tribunal-de-paris.justice.fr/sites/default/files/2025-07/250616_CJIP%20signed.pdf

Pierre de Montera
pierre.de-montera@proetic.fr

All news