29 July 2021
An internationally renowned A-share listed high-tech company (“Company”) has an annual revenue of more than 7 billion RMB, with its market spreading all over China as well as in the countries in Asia, Europe, Africa and Latin America. In June 2020, based on the Company’s voluntary disclosure to the African Development Bank (“AfDB”) of its individual employees’ misconduct in one infrastructure project funded by the AfDB, the AfDB and the Company entered into the Settlement Agreement, under which the AfDB imposed debarment with conditional release on the Company and one of the Company’s subsidiaries.
According to the Settlement Agreement, the Company shall fully establish and implement an integrity compliance program (“ICP”) within its whole group in accordance with the Integrity Compliance Guidelines of the AfDB (“ICG”), and shall, jointly with the Integrity and Prevention Division (“PIAC.1”) of the AfDB, appoint an expert with abundant experiences in multilateral development banks compliance as the Independent Integrity and Compliance Consultant (“IICC” or the “Monitor”). The Monitor appointed will, on behalf of the AfDB, guide and assess whether the Company has established and effectively implemented the ICP in accordance with the compliance standards of the AfDB.
In August 2020, based on her good reputation and professional expertise in the field of multilateral development banks compliance, the AfDB and the Company jointly appointed Ms. Christine KANG as the Monitor of the project, who will guide and assess the implementation of the ICP of the Company on behalf of the AfDB. Since her appointment, Ms. Kang has led the JunHe team to work closely with the Company and its external counsel to review and evaluate the ICP rules established by the Company, provided detailed pragmatic suggestions for the Company to improve its compliance management system, and promoted the Company to effectively implement its ICP in line with the international standards. At the same time, during the sanction period, the JunHe team, together with the AfDB, the Company and its counsel, has worked hard to overcome the difficulties caused by the pandemic, reviewed thousands of supporting documents submitted by the Company on the establishment and implementation of its ICP, conducted three one-week-long online or on-site site visits, interviewed dozens of personnel including the chairman of the board, senior executives at all levels and employees from various departments of the Company, and finally, drafted and submitted four Compliance Reports in English with nearly one hundred pages respectively to the PIAC.1. The AfDB, the Company and its counsel all highly recognized and praised the work of Ms. Kang and the Monitor’s team. On June 19, 2021, the AfDB officially notified that the Company has met the conditions of release under the Settlement Agreement, and is released from the AfDB debarment.
In its notice of release, the AfDB highly praises the Company's compliance management work, and considers that the ICP designed and established by the Company has functioned well and continues to improve, which shall be a good example for many other Chinese enterprises who have been sanctioned. The AfDB’s release of the Company from debarment reflects that the Company has established and implemented the compliance management system with the international compliance standards, the Company is eligible to bid for projects financed by multilateral development banks, and that the Company has built strong foundation and solid guarantee for the Company’s sustainable development in line with compliance.
This project is a typical case where JunHe, for the first time, was appointed as Monitor by the AfDB, guiding a Chinese enterprise sanctioned by multilateral development banks to establish, improve and implement the ICP to be successfully released from the debarment, and is also a pioneering work where Chinese lawyer sits as the Monitor appointed by multilateral development banks, which is rare circumstance in Chinese legal market as the multilateral development banks, including the African Development Bank, used to appoint western attorneys in law firms based in Washington to serve as Monitor. In the closing videoconference upon the completion of the project, the AfDB highly praised the Monitorship work of Ms. Kang and JunHe team in this project, stating that the JunHe team “works professionally, efficiently and punctually, especially has detail-oriented insight into the implementation of the ICP, and did good job in making in-depth questions during the compliance interviews and putting forward targeted suggestions, which have made the IICC team one of the highest professional levels that the AfDB has worked with.”
The success of this project, once again demonstrates JunHe's in-depth grasp of the rules of multilateral development banks including the AfDB, as well as its significant experiences in applying international rules, adapting to China's specific situations, and seamlessly combining the both into the ICP implementation, which shows from another perspective the outstanding legal expertise of JunHe team in dealing with the sanctions, investigation and compliance of the multilateral development banks.
