European Bank for Reconstruction and Development

1
European Bank for Reconstruction and Development

• Applying International Standards to Private
  Sector Operations
• Enery Quinones
• Chief Compliance Officer

2
Salient Facts

• Established in 1991 to promote transition to open
  market economies in 27 countries from Eastern
  Europe to Central Asia
• Single largest investor in region (30.3 billion)
• Owned by 60 countries and 2 international
  institutions

3
What are the EBRDs objectives?

• To promote transition to market economies by
  investing mainly in the private sector
• To mobilise significant foreign direct investment
• To support privatisation, restructuring and
  better municipal services to improve peoples
  lives
• To encourage environmentally sound and
  sustainable development

4
Active in all countries of operations
Cumulative commitments 30.3 billion
SE Europe Caucasus 33.6
Russia Central Asia 31.6
Central Europe 34.8
December 2005
5
Challenges

• Preponderance of our countries of operations (19)
  fall below 50th rank
• Russia dropped from 90th (2004) to 126th (2005)
• Azerbajian and Uzbekistan rank 137th
• Tajikistan (144th ) and Turkmenistan (155th)

6
Office of the Chief Compliance Officer

• Independent from banking operations
• Responsible for promoting integrity and business
  ethics in EBRD and in EBRD financed projects
• Focal point for anti-corruption work

7
Prevention

• Integrity procedures and approvals
• Robust integrity due diligence
• Independent integrity investigations

8
Independent Investigations Expenditure in Euros
9
Public Procurement

• Application of Banks Procurement Rules and
  Procedures
• Preventing abuses through open tenders
• Addressing fraud and corruption in procurement in
  EBRD funded projects

10
Detection

• Portfolio Monitoring
• Integrity Safeguards and covenants
• Investigations

11
Promoting International Standards

• Corporate goverance
• Anti-money laundering/countering terrorist
  financing
• Anti-corruption and business ethics

12
Working with Clients

• Diagnostic
• Technical assistance and training

13
AML/CFT Workshops

• Workshops in 16 countries of operations
• 338 bankers
• 254 financial institutions
• Cost of 750,000 euros

14
International Co-operation

• Establishment of an IFI Anti-Corruption Task
  Force
• Joint Framework addressing
• Definitions of fraud and corruption
• Harmonised investigative guidelines
• Mechanisms for cross-recognition of enforcement
  actions
• Information sharing

15
Longer term objective of Task Force

• Develop concrete proposals to assist countries to
  strengthen their capacity to combat corruption
  and improve co-operation with civil society,
  other stakeholders and institutions, such as the
  press and the judiciary, with a goal to enhance
  transparency and accountability.