1 / 21

The EIB Group – The EIB

The EIB and Fraud: How the EU Bank combats and prevents Fraud and Corruption Jan Willem van der Kaaij (EIB Inspector General) 4th ICAC Symposium Hong Kong, 15-17 December 2009. The EIB Group – The EIB. EIB – The EU Bank: Providing long-term finance for projects promoting European objectives;

jlittle
Download Presentation

The EIB Group – The EIB

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. The EIB and Fraud:How the EU Bank combats and prevents Fraud and CorruptionJan Willem van der Kaaij (EIB Inspector General)4th ICAC SymposiumHong Kong, 15-17 December 2009 European Investment Bank

  2. The EIB Group – The EIB EIB – The EU Bank: • Providing long-term finance for projects promoting European objectives; • Supporting EU Development and Cooperation Policies in Partner Countries. • 2008 key figures: • Total Lending: EUR 57.6 bn - European Union: EUR 51.5 bn - Partner countries: EUR 6.1 bn • Borrowings: EUR 59.5 bn • Subscribed capital: EUR 232.4 bn (at 01/04/2009) European Investment Bank

  3. EIB lending 1958-2008 European Investment Bank

  4. The European Investment Bank (EIB)European priority objectives • Within the Union: • Cohesion and convergence • Small and medium-sized enterprises (SMEs) • Environmental sustainability • Knowledge Economy • Trans-European Networks (TENs) • Sustainable, competitive and secure energy European Investment Bank

  5. The European Investment Bank (EIB)Europeanpriority objectives • Outside the Union: • Private sector development • Infrastructure development • Security of energy supply • Environmental sustainability • Support for EU presence in Asia and Latin America via Foreign Direct Investment (FDI) European Investment Bank

  6. EIB Activities Outside the Union • Supporting EU Development and Cooperation Policies in Partner Countries • EIB external mandates: • Pre-accession countries: • Candidate countries - Croatia, Turkey and Former Yugoslav Republic of Macedonia • Potential candidate countries - Western Balkans • European neighbourhood: • Mediterranean Neighbourhood (FEMIP) • Eastern Europe, Southern Caucasus, Russia • Development: • Africa, Pacific and Caribbean (ACP) • South Africa • Asia and Latin America (ALA) • Loans of EUR 6.1bn in 2008 European Investment Bank

  7. Asia and Latin America • EIB can lend up to EUR 3.8 bn during 2007-2013: • Support for EU presence in Asia and Latin America through Foreign Direct Investment and technology transfer • Environmental sustainability (climate change mitigation) • EU energy security • Loans of EUR 470 m in 2008 European Investment Bank

  8. The Project Cycle at the EIB N.B.: Fraud/corruption can affect each phase of the project cycle. European Investment Bank

  9. EIB Fraud Investigations (1) Investigations of allegations of the following in EIB-financed contracts (as well as Bank staff cases of internal fraud, if any): • fraud; • corruption; • collusion; and • coercion. • Key features: • independent in the exercise of its responsibilities; • work cooperatively with OLAF; • fair/impartial with due regard to rights of persons involved; • all information/documents kept strictly confidential; • right to examine/copy promoter/contractors’ books and records. N.B.: Investigations are administrative, fact–finding inquiries. European Investment Bank

  10. EIB Fraud Investigations (2) • Standard Process: receipt, registration and evaluation of an allegation results in decision whether to open a case; • Sources of Information incl. documents, electronic data, site inspections/audits, and statements from witnesses; • Findings: based on both exculpatory (disprove) and inculpatory (prove) information; • Standard of Proof: “more probable than not”; • Obstruction of investigation: false statement or act to impede the investigation by staff member is sanctionable; • Case reports simultaneously to President and VPs, the Audit Committee and OLAF. European Investment Bank

  11. EIB Fraud Investigations (3) European Investment Bank

  12. EIB – OLAF Cooperation (1) OLAF and EIB: • Legal basis – ECJ decision in 2004 concerning access to EIB in “financial interests of the community”; • OLAF expertise : • investigation; • prosecution; • contact with countries’ judicial systems. • Working together: EIB banking expertise plus OLAF investigative/prosecution expertise; • Pooling of resources is more efficient. European Investment Bank

  13. EIB – OLAF Cooperation (2) • Systematic & Routine: When complaints are received, two possibilities: • (1) Cases not valid  OLAF can review the list; • (2)Cases opened  OLAF informed by e-mail; Monthly reporting to OLAF at same time. • Cooperation: • Regular meetings (Brussels and Luxembourg); • OLAF can join any site visit and EIB joins OLAF missions; • EIB files and staff open to review by OLAF; • EIB staff can report suspicions directly to OLAF. European Investment Bank

  14. EIB’s Anti-Fraud Policy (1) Anti-Fraud Policy approved by Board of Directors in 2008 is published on the EIB website. The Policy includes: • Harmonised IFI definitions of fraud, corruption, collusion and coercion (WB, AfDB, etc… signed the Uniform Framework Agreement in September 2006 in Singapore); • Money laundering & terrorist financing plus referral of suspicious transactions to local authorities. Also, EIB uses a bespoke version of harmonised IFI Investigation Procedures (also part of the Uniform Framework) – Now, all IFIs investigate the same things in same way. European Investment Bank

  15. EIB’s Anti-Fraud Policy (2) In addition, EIB also: • updated its whistleblower protection; • is training all operations staff (and all newcomers) in fraud awareness / red flags; • is developing a sanction/debarment process; • will recruit additional staff - also to increase proactive capacity. European Investment Bank

  16. Fraud Awareness/Red Flags We advise EIB staff and project officials to: - enforce the rules and controls; - use “professional scepticism” – if something looks odd, it probably is! - not rely on appearances – look behind the paperwork and beneath the surface (e.g. conduct random sampling); - assume corrupt parties know “the system”; - train staff to recognise red flags (officials living beyond their means, unusual unit prices, odd bidding patterns, sham firms winning contracts, etc…) and deal with fraud/corruption issues; - reward staff for reporting fraud or corruption by including governance issues in staff appreciation. European Investment Bank

  17. Increasing deterrence (1) Deterrence: not only identifying the fraudster/briber, but also increasing the risk for him/her by: • regulatory/audit/financial follow-up; • criminal investigation/prosecution; • reputational risk, media coverage, etc…; • debarment. In particular, EIB will: • recover misapplied funds, suspend disbursements, and implement rectification measures. European Investment Bank

  18. Increasing deterrence (2) As a key player in international financial community, EIB: • exchanges informationwith other IFIs and other parties; • raises awareness of fraud and corruption issues; • works with IFI’s to furtherharmonise approaches to key issues(disclosure of previous sanctions, agents fees etc.); • reviews/updates its policies & procedures to ensure they are robust and match ‘best practice’; • continues dialoguewith civil society, NGOs, contractors, etc… European Investment Bank

  19. EIB’s Cooperation with National Authorities We are committed to cooperate and will: • Refer cases for investigation/prosecution to national authorities; • Assist with requests for information/documents and training; • Provide witnesses and/or evidence for criminal proceedings (subject to immunities and privileges); Cooperation is two-way - EIB expects: • Early notification of fraud or corruption issues affecting EIB-financed activities; and • Cooperation to assist EIB investigations. European Investment Bank

  20. Contact Us Please do not hesitate to contact us at: EIB Investigations Division, 98-100 boulevard Konrad Adenauer, L-2950, Luxembourg (+352) 4379 84238 (+352) 4379 64000 j.vanderkaaij@eib.org devries@eib.org or investigations@eib.org and also http://www.eib.org/about/news/how-to-report-fraud-or-corruption.htm European Investment Bank

  21. Thank you European Investment Bank

More Related