2024.10.24
The sanctioned party was a large Chinese state-owned engineering company that was widely acclaimed in the field of power engineering. At the end of 2021, the Asian Development Bank ("ADB") found that the company had committed significant non-compliant behavior when bidding for an ADB-financed infrastructure project in 2018 and thus investigated it. The JunHe team was engaged by the company to respond to the investigation. We assisted the company in carrying out a substantive internal compliance investigation, implementing remedial measures, and presenting multiple rounds of defenses to the ADB from both factual and compliance perspectives, thereby mitigating the adverse impact of the ADB investigation on the company to the greatest extent.
The ADB initially intended to impose a three-year sanction on the company. Thanks to the efforts of the JunHe team, the ADB only imposed a two-year sanction with a permission to apply for the early lifting of the sanction after 15 months from the sanction date. The ADB did not disclose the sanction measures against the company, thereby preventing the company from being subject to cross-sanctions by other multilateral development banks such as the World Bank and the African Development Bank.
Three months after the ADB sanction took effect, the JunHe team actively communicated with the ADB and procured the substantial early lifting of the sanction on the company’s subsidiaries that had nothing to do with the sanctioned behavior.
During the sanction, the JunHe team assisted the company in implementing compliance rectifications and improving its existing compliance policies. We also provided guidance as well as training for the company-wide implementation of such policies. During the monitor’s on-site inspection of the company, the JunHe team assisted the personnel of the company's headquarters and domestic and overseas subsidiaries and branches in showcasing the company's outstanding progress in compliance management to the monitor's team and the ADB by submitting compliance work records and cooperating with interviews to help the ADB better understand the company's unique features and highlights in compliance management.
Despite the ADB’s increasingly stringent compliance requirements, both the ADB and the third-party monitor highly recognized the company's compliance policies and the effectiveness of their implementation, which could not have been achieved without the joint efforts of the company's compliance team and the JunHe team. In October 2024, the company received ADB's notice regarding lifting the sanction and the goal of substantial early lifting of the sanction was achieved.
This was another representative case where JunHe advised on responding to compliance investigations and sanctions by multilateral development banks. It demonstrated the JunHe team's full-chain service capabilities in compliance investigations, sanctions, settlement negotiations and the establishment and implementation of compliance systems, and further strengthened our leading position in advising on responding to investigations and monitoring by multilateral development banks and compliance rectifications. The JunHe team showcased their professionalism, service mindset and team capability in this project and was highly praised by the client for their diligent work, outstanding expertise and prompt feedback. The client commended the JunHe team for not only helping with its compliance rectifications but also improving its compliance team’s work. The JunHe team believes that in an international environment with more and more challenging cases, we have the strength to help Chinese enterprises navigate challenges and achieve success.
Partners ZHOU, Xianfeng (Elvis), QIN, Yu (Bill), ZOU, Weining and DU, Lijing led the JunHe team, and partner LIU, Zhen was responsible for the specific work of the project.
