EBRD’s Prohibited Practice Actions Rohan Schaap Office of the Chief Compliance Officer 24 May 2017
Chernobyl New Safe Confinement 2
What do we expect from our clients? EBRD expects its Public Sector Clients to have: Comprehensive internal controls that are designed to detect and limit the opportunities for fraud and corruption. Reporting mechanism that allows internal and external parties to report suspicions of fraud and corruption, and to do so without fear of retaliation (whistle-blower protection). A process for effectively reviewing and resolving complaints of fraud and corruption.
Essential Elements of an Anti- Corruption Compliance Programme What t exists on paper er? How w com ompre rehen hensiv ive? • Anti-bribery/corruption policy • Prohibition on bribery Rules on gifts and hospitality, political donations, charitable donations, bribery solicitation • • Code of Conduct/Ethics • AML/CFT and sanctions compliance policy • Whistleblowing/Reporting mechanism Meanin aningful l impl mpleme ementatio tation? Ownership/tone from the top and middle management • • Training and awareness/raising • Repeat risk assessments • Response to compliance failures/internal investigations • Financial and non-financial control measures Monitoring and review • 4
What does the EBRD do to help reduce the demand side corruption? Ukrainian Business Ombudsman Council Extra-judicial dispute resolution mechanism MOU between Govt of Ukraine, EBRD, etc. Legislatively enshrined Engagement with govt authorities Technical capacity building Raising awareness of business integrity “Appropriate” enforcement /sanction Identifying demand side situations Business integrity and controls improvements 5
EBRD Investigations of Prohibited Practices • Investigates allegations of Prohibited Practices committed in respect of Bank Projects. • There are seven Prohibited Practices: • Fraud • Corruption • Collusion • Coercion • Theft • Misuse of Bank resources • Obstruction • Prohibited Practices can result in debarment of the relevant entities, and then(potentially) cross-debarment by other MDBs. 6
Our Expectations (during an investigation) EBRD expects its client to: Inform us of all suspicions of fraud and corruption occurring within project at the earliest possible time. Fully cooperate with EBRD’s investigations, including making its records and personnel available to investigators; Suspend (and if appropriate, dismiss) all individuals suspected of being involved; Review internal controls and make improvements where required.
What will an EBRD investigation involve? On receipt of an allegation, EBRD will: Assess the reliability and seriousness of the allegation; Assess the implications of the allegation on the EBRD programme / EBRD procurement activity; On the basis of the above, determine whether to commence an EBRD investigation into the allegations. 8
EBRD Investigations An EBRD investigation: • Will seek to determine whether tenderers or contractors / subcontractors have engaged in fraud and corruption. • Will not investigate the actions of a public sector client or its personnel (including personnel from the Project Implementation Unit). This is the role for national authorities and / or the client; • May result in EBRD imposing sanctions on an entity that is involved in fraud or corruption and / or deciding not to fund the affected project. 9
Focus Country – Ukraine Four corruption-related enforcement actions 2015-2016 # Payments Benefit Result Subject ACTI Ukraine US$22 US$100 million in 3-year 1 (Subsidiary of multinational million VAT refunds debarment agribusiness corporation) VAT refunds, 3-year Medium-sized, family- €7.2 million 2 customs clearance, conditional owned plastic manufacturer court case facilitation nondebarment 3-year €18.3 million in VAT Medium-sized, family- €4.3 million 3 conditional owned steel manufacturer refunds nondebarment 3-year Medium-sized, regional 4 US$380,000 Land registration conditional grain trading company nondebarment 10
Useful Resources • Transparency International Business Principles for Countering Bribery • ISO 37001 on Anti-Bribery Management Systems • UNODC/World Bank/OECD Anti- Corruption Ethics and Compliance Handbook for Business • UN Global Compact: A Guide for Anti- Corruption Risk Assessment • U.S. DOJ Evaluation of Corporate Compliance Programs Business Anti-Corruption Portal • • World Economic Forum Partnering Against Corruption Initiative 26 May, 2017 11
Questions? EBRD Website: www.ebrd.com List of Ineligible Entities: www.ebrd.com/ineligible-entities.html Report Fraud and Corruption: http://www.ebrd.com/eform/contact/1390580844264 Ombudsman Business Council: https://boi.org.ua/en/ 12
Recommend
More recommend
