Promoting Integrity in the Work of International Organisations: Minimising Fraud and Corruption in Projects (Contributions to Finance and Accounting)

This book is an in-depth study of how to promote integrity and avoid fraud & corruption in the work of international organisations, in particular multilateral development banks, such as the European Investment Bank, World Bank, Asian/Inter-American/African Development Banks and European Bank for Reconstruction and Development. A number of issues are reviewed, including procurement, compliance, corporate governance, business ethics, anti money laundering and a number of relevant case studies highlighted. In addition, effective methods and tools of prevention, proactive monitoring and detection are reviewed and, if misconduct is identified, sanctioning the perpetrators of such misconduct is discussed. Foreword Preface Acknowledgements Contents Abbreviations Chapter 1: Introduction Chapter 2: International Finance 2.1 Public Versus Commercial Banks 2.2 Public Banks 2.2.1 The World Bank 2.2.2 European Investment Bank 2.2.3 Other MDBs 2.2.4 Bilateral Agencies 2.3 Other International Organisations 2.4 Key Parts of a Project 2.4.1 Dedicated Project Office 2.4.2 Contractual Terms 2.4.2.1 EIB ́s Information and Visits Clause 2.4.2.2 WB ́s Disclosure of Fees Paid to Agents 2.4.2.3 EIB ́s Covenant of Integrity 2.4.3 Undertaking on Prohibited Conduct 2.4.4 Undertaking on Exclusion/Debarment 2.4.5 Books and Records Inspection 2.4.6 Monitoring Project Developments 2.4.7 Project Supervision 2.4.8 Project Completion Chapter 3: Types of Support 3.1 Specific Issues vs General Mandate 3.2 Loans Versus Grants 3.3 Trust Funds 3.4 Variety of Finance Chapter 4: Projects 4.1 Types of Projects 4.2 Project Procurement 4.3 Possible Problems in Procurement 4.4 Project Implementation 4.5 Controls 4.6 Project Completion Chapter 5: Cyber Crime, Data Security and Data Protection Chapter 6: Money Laundering and Other Illegal Conduct 6.1 Recent Money Laundering Issues 6.2 Freezing Orders 6.3 Virtual Currencies Chapter 7: Possible Controls 7.1 Project Controls and Management 7.1.1 Terms and Conditions of the Project Loan 7.1.2 Procurement Documents 7.2 Project Boss/Staff 7.3 Press Coverage: Active Journalism, an Independent Press 7.4 Third Party Monitors 7.5 Credibility 7.6 Politicians 7.7 Financier ́s Involvement/Monitoring 7.7.1 Monitoring by Institutional Representatives 7.7.2 Complaints Mechanism 7.7.3 Investigations and Sanctions 7.8 Liability 7.9 Prevention Chapter 8: Corporate Safeguards 8.1 Compliance 8.2 More Ethical Companies 8.3 Whistleblowers 8.3.1 EU Protection of Whistleblowers 8.3.2 US Securities and Exchange Commission (SEC) 8.3.3 US Commodity Futures Trading Commission (CFTC) Awards 8.4 Auditing/Accountancy 8.5 ISO 37001 Anti-Bribery Management Systems 8.6 Reputation 8.7 Liability: Internal Controls Chapter 9: Other Possible Safeguards 9.1 Honesty 9.2 Accountability 9.3 Trust 9.4 Detailed Reviews by the Financier 9.5 Possible Investigation/Sanctioning by Financier 9.6 Related Law Enforcement Action 9.7 National Law Enforcement Agencies 9.8 EPPO/OLAF 9.9 Better Study of (and Training on) Fraud and Corruption 9.10 Trade Agreements Chapter 10: Warning Signs (or Red Flags) of Fraud and Corruption in Procurement Chapter 11: Proactive Reviews 11.1 Proactive Reviews by the Six MDBs 11.2 Other Organisations 11.3 Generally 11.4 Risk Identification and Mitigation 11.5 Investigation to Follow Chapter 12: Investigations 12.1 Allegations 12.2 Prevention/Lessons Learned 12.3 External Investigation 12.4 Internal Investigation 12.5 All Investigations 12.6 Investigation Principles 12.7 Standard of Proof 12.8 Final Reports 12.9 Sanctions 12.10 Referrals 12.10.1 Europe-Based EIB Prohibited Conduct 12.10.2 EBRD 12.10.3 OLAF 12.10.4 EPPO 12.10.5 WB INT 12.10.6 WB Sanctions 12.10.7 IDB 12.10.8 ADB 12.10.9 AfDB 12.10.10 Other Global organisations 12.10.10.1 UN OIOS 12.10.10.2 UN Development Programme 12.10.10.3 The Global Fund 12.10.10.4 Conference of International Investigators 12.11 Working with Local Law Enforcement 12.12 Examples of Prohibited Conduct Affecting an International Organisation 12.13 Broader Examples of Misconduct Chapter 13: Sanctions 13.1 Purpose of Sanctions 13.2 Process 13.3 Different Systems 13.3.1 World Bank 13.3.2 European Bank for Reconstruction and Development (EBRD) 13.3.3 Asian Development Bank 13.3.4 African Development Bank 13.3.5 EIB 13.4 Cross Debarment Agreement 13.5 Level of Sanctions Applied 13.6 Publication 13.7 Domestic Systems Chapter 14: Notable Cases 14.1 Siemens 14.1.1 Text from the Website of the US Department of Justice 14.1.2 Text from the US Department of Justice Website 14.1.2.1 Siemens Integrity Initiative 14.2 Alstom 14.2.1 Text from the US Department of Justice (DoJ) Website 14.2.2 Text from the Website of the UK SFO 14.2.3 Text Also from the Website of the UK SFO 14.2.4 Text from the EBRD ́s Website 14.2.5 Text from the AfDB ́s Website 14.3 Oxford University Press 14.3.1 Text from the Website of the UK SFO 14.3.1.1 Oxford Publishing Ltd to Pay Almost £1.9 Million As Settlement After Admitting Unlawful Conduct in Its East African O... 14.3.1.2 Background 14.3.1.3 Self Referral 14.4 SNC Lavalin 14.4.1 Text Is an Excerpt from Wikipedia (on 30/11/19) 14.4.1.1 Legal Issues 14.4.1.2 Libya (2011) 14.4.1.3 McGill University; The Arthur Porter Kick-Back Scandal (2011-2014) 14.4.1.4 Padma Bridge (Since 2011) 14.5 Wasim Tappuni 14.5.1 Text from the UK ́s City of London Police Website 14.6 VW 14.6.1 Text from EIB ́s Website 14.7 Odebrecht 14.7.1 Text from BBC News Website 14.7.2 Text from the US DoJ Website 14.7.3 From IDB ́s Website Chapter 15: Sources of Further Information 15.1 Open Contracting Partnership 15.2 OECD 15.3 B20 Collective Action Hub 15.4 Basel Institute on Governance (Based in Basel, Switzerland) 15.5 Transparency International (TI) 15.6 Integrity Action 15.7 US FBI 15.8 UK Action Fraud: National Fraud and Cyber Crime Reporting Centre 15.9 Financial Fraud Action, UK 15.10 FCPA Blog 15.11 Fraud.org: A Project of the UK ́s National Consumer League 15.12 Ethical Alliance 15.13 Ethikos Weekly 15.14 The Ethics Institute 15.15 The International Anti-corruption Conference 15.16 International Anti-corruption Academy (IACA), Laxenberg (Near Vienna), Austria 15.17 Construction Transparency (CoST) 15.18 The Stolen Asset Recovery Initiative (StAR) 15.19 Government Transparency Institute (GTI) 15.20 The Pearl Initiative 15.21 Corporate Data Quality 15.22 INTERPOL ́s Integrity in Sport 15.23 US Department of Justice (DoJ) Website 15.24 Foundation for the Global Compact 15.25 Partnership for Transparency 15.26 Coalition for Integrity 15.27 Spotlight on Corruption 15.28 Corruption Watch UK 15.29 ACFE Chapter 16: Conclusion Cases/Issues Involving Appendix: A List of Films About or Involving Fraud and Corruption