Post on 18-Feb-2020
transcript
European Investment Bank
Overview of
Procurement
and Integrity
at the EIB
Andreja Neral Lamza & Mirela Lascu,
European Investment Bank
The EIB: the EU bank
Shareholders: 28
EU Member States
Around 90% (EUR
75.4bn) of lending
within the EU
Around 10% (EUR
8.38bn) of lending
outside the EU
22/05/2017 European Investment Bank 2
The EIB: Integrated in the EU accountability
system
22/05/2017 European Investment Bank 3
Treaty on EUTreaty on the
functioning of the EU
EIB Statute
Integral part of
the Treaties
Th
e E
IB i
s a
cco
un
tab
le
in f
ron
t o
f:
European Ombudsmen
European Court of Justice
Inside EU Outside EU
GtP
principle based
The EIB’s Guide to Procurement (GtP)
22/05/2017 European Investment Bank 4
ETHICAL CONDUCT
For entities or individuals found to have engaged in fraud or corruption in EIB
financed projects the Bank…
… may declare and individual or an entity
ineligible.
… may cancel all or part of the Bank
financing.
Zero Tolerance Policy which applies to
all EIB activities, staff members and
counterparts
Policy established in close
consultation with Civil Society, NGOs
and also OLAF (public consultation)
EIB’s Anti-Fraud Policy- reflected in the GtP -
Fair and transparent process –
respondent has opportunity to review the
evidence and comment
Following the
Treaty principles
(equal treatment,
non-discrimination,
mutual recognition,
proportionality and
transparency)
No standard
templates and
tender
documents like
most of other
MDB’s have
National Law implementing EU
Directives
The Covenant of Integrity (CoI):
GtP Annex 3
It is important that all links in the chain stay strong → it is vital that
all parties report any suspicions of fraud or corruption immediately!
European Investment Bank22/05/2017 5
CoI
Applicable to all contracts outside the
EU (no threshold; public & private sector
included)
Obligation for tenderers (extended to the sub-contractors) to
declare if they have been excluded by the EU Institutions or the
main MDBs
Obligation of keeping records for possible auditing (extended to the sub-contractors)
EIB’s Inspectorate General
European Investment Bank Group
Inspector General
Operations Evaluation
Fraud Investigations
Complaints Mechanism
Ex-post evaluations of
EIB Group’s Operations
Handles allegations of
maladministration
Fraud Investigations Mandate: investigates fraud,
corruption, collusion, coercion,
obstruction, money-laundering and
financing of terrorism
Legal basis: EIB’s Anti-Fraud Policy
approved by Board of Directors
Source of allegations may be internal or
external
Right to examine/copy relevant books
and records held by EIB’s borrowers/
promoters/ contractors/ suppliers etc.
6
European Investment Bank Group7
IG/IN’s Investigation
Activity
PROACTIVE(PIRs)
REACTIVE
The Fraud Investigations Division (IG/IN)
7
PROACTIVE INTEGRITYREVIEWS
8European Investment Bank Group
PIRs of EIB loans to Financial Intermediaries –schemes and indicators of misuse of funds
PIRs of EIB loans to Financial Intermediaries: Control issues
Examples of institutional problems identified at some FinancialIntermediaries - Commercial Banks as well as Public PromotionalBanks:
‣ Weaknesses of internal control systems‣ Weak or lacking AML/CFT policies, absence of compliance
officer, no PEP policy‣ Inadequate monitoring of related parties and PEPs‣ Some Public Promotional Banks are not regulated by the local
Banking Agency‣ Political committees of government ministers overriding
negative credit decisions without adequate business rationalejustification
European Investment Bank Group 9
PIRs of EIB loans to Financial Intermediaries –Irregularities identified
‣ Indications of money laundering
‣ Irregularities with regard to the purpose of theallocations
‣ Final Beneficiaries acting as front companies set up toobtain funds to the benefit of other related entities,which by themselves would not be eligible for SMEfunding
European Investment Bank Group 10
22/05/2017European Investment Bank Group 11
PIR on a road project in the Balkans –
A motorway project
Annex
Fieldwork
PIR on a road project in the Balkans –A motorway project
European Investment Bank Group 12
Findings: EIB found evidence of fraud inthe selection of subcontractors: entityappointed to deliver metal barriersturned out to be a bar
Implementation: The borrower implemented the requested changes(additional controls, composition of the PIU, external supervising engineer)and the EIB resumed lending for the new project.
Remedies:
1. Repayment of approx. Euro1m (the amount ofirregularities identified)
2. Modifications to therequirements for anothermotorway project to befinanced by EIB
PIR in the Balkans - Actions taken
1. For another ongoing project with the same borrower
2. For future projects
European Investment Bank Group 13
PIR in the Balkans - Preventive measures for another ongoing road project
European Investment Bank Group 14
TA Consultant’s MONITORING
• Controls & checks performed by Technical Assistance Consultant
REPORTINGDIRECT REPORT OF ANOMALIES
OBJECTIVE = confirm a transparent procurement process + prevent appointment of subcontractors that :
- do not hold the necessary certificates/licenses or - are affiliated to political parties or - have no relationship with civil construction business
• To all co-financers,
• Update min. every 6 months OR when major sub contract awarded
• Prompt report to the Promoter who must promptly report to EIB’s IG/IN