On the 23rd of April the EIB will approve its revised anti-fraud policy. What should have been an open process taking into account current political commitments against tax evasion and money laundering and recent investigations by the European anti-fraud office OLAF into projects financed by the EIB, will turn out to be a rushed revision ignoring concerns raised by civil society stakeholders.
Several policy processes are currently taking place including the ongoing review of the anti-money laundering directive initiated by the European Commission and commitments by EU member states - the bank’s shareholders - to take measures against tax evasion both at European level and under the framework of the G8 and G20.
“As an EU body governed by the member states, we regret the EIB is revising its policy outside of this political reality. With the issue of tax evasion high on the political agenda and with new regulation on the way, EIB’s new policy risks to be outdated before it is approved”, according to Xavier Sol, Counter Balance director.
Additionally a major investigation on allegedly failed due diligence by the Bank on corruption and money laundering is currently conducted by OLAF on EIB investments into the private equity fund ECP operating inNigeria.
“OLAF’s findings and eventual policy recommendations are expected this summer and we believe it is of importance for the Bank to draw adequate lessons on the case and reflect these in its policy once the outcome of OLAF investigation will be available”, says Revision of the European Investment Bank’s anti-fraud policy happens outside of political reality of Re:common.
But contrary to the revision of its anti-fraud policy in 2008, the EIB has not engaged in a genuine consultation process with civil society this time. At the end of March the EIB presented its revised policy to stakeholders inBrusselsbut due to its fast-tracked adoption procedure it is very likely that the Bank will not take into account the concerns raised during the meeting.
Sol: “Several loopholes remain unsolved: the EIB has still not formally committed that it will stop disbursing loans when investigations are taking place into the projects it finances. Neither has the bank addressed the problematic issue of lending through financial intermediaries such as private equity funds or commercial banks, even while this type of lending has proved to be especially vulnerable to corruption due to its opaque structure.”
“By rushing the revision of its anti-fraud policy, the European Investment Bank (EIB) is putting the credibility of its commitments against corruption and money laundering at stake”, concludes Tricarico.