2024.10.14
The sanctioned company in this instance was a subsidiary of a Fortune Global 500 Chinese central state-owned enterprise, whose business covered industries such as mining, transportation, metallurgy and power. In a project financed by the Asian Development Bank (“ADB”), ADB’s Office of Anticorruption and Integrity (“OAI”) found that the company had violated ADB’s compliance policy and imposed sanctions disqualifying it from bidding for projects for three years. OAI allowed the company to apply to ADB for the lifting of the sanction two years after the original sanction date.
As required by ADB, the company appointed an independent and reputable third-party organization to act as its compliance monitor during the sanction to examine and assess on behalf of ADB the effectiveness of the company’s implementation of a compliance management system and issue monitoring reports to ADB describing the establishment and implementation of such a system. Considering the experience and outstanding reputation of JunHe’s team in advising on compliance with the regulations of multilateral development banks, the company engaged JunHe to act as its compliance monitor in 2022, which was fully recognized by OAI.
After its appointment as compliance monitor, JunHe made a full assessment of the company’s existing compliance policies and management framework and comprehensively reviewed its compliance management system. JunHe’s team proposed revisions to such policies with reference to internationally recognized standards of corporate compliance management, thus laying a clear foundation of rules for the company’s subsequent compliance rectification.
The JunHe team conducted multiple monitoring visits to the company’s headquarters and overseas branches in 2023 and 2024. The JunHe team reviewed thousands of documents regarding the company’s compliance management and interviewed key compliance management personnel at the headquarters and branches to gain a full understanding of the company’s compliance management in bidding, personnel, finance and project execution, as well as the effectiveness of compliance training, risk assessment, whistleblowing and investigation mechanisms within the company. In the monitoring reports submitted to ADB, JunHe described the general picture of the company’s compliance management and put forward suggestions for its improvement with reference to the standards of integrity and compliance prevailing in ADB and other multilateral development banks. Thanks to the independent monitoring of the JunHe team and the full cooperation given by the company and its counsel, ADB recognized the effectiveness of the company’s implementation of compliance policies and approved the early lifting of sanctions on the company.
This was another example of JunHe’s success in acting as a compliance monitor recognized by a multilateral development bank. Compliance reviews by multilateral development banks have become increasingly stringent in recent years, and JunHe keeps abreast of the latest rules and working standards of major banks. It is committed to strengthening the common understanding of compliance standards among different cultures, considering the neutrality, technicalness and applicability of these standards.
Given the tight schedule and heavy workload of this project, the sanctioned entity had to do a lot within a short period of time to improve its compliance management and prove the functionality of its systems. While acting as monitors, JunHe made suggestions to the company to improve its compliance management, and fully demonstrated to ADB the company’s excellent compliance performance, which ultimately contributed to the successful early release of the sanctions.
Partners ZHOU, Xianfeng (Elvis) and ZOU, Weining led the JunHe team, and partner LIU, Zhen was responsible for the specific work of the project.
