Workshop sfof{zfnfsf] c+zx?

components
• Introduction
I t d ti to t Integrity
I t it ƒ Odfgbfl/tfsf] kl/ro

• ADB’s
ADB s Anticorruption ƒ Pl8aLsf]
Pl8aLsf e| ei6frf/
i6frf/ lj/fwL
lj/f]wL
Policy, Guidelines and gLlt lgb]{lzsf tyf k|lqmof
Process

• Conducting Basic ƒ cfwf/e"t oyf]lrt

Due Diligence
g kl/>dsf] ;~rfng
kl/>dsf
• Spotting Every Day
R d Fl
Red Flags ƒ blgs
b}lgs /ftf]
/ftf em08fx?sf
em08fx?sf] klxrfg
 Would you buy a flat if hu sdhf]/ 5 eGg]
you knew its foundation
was unstable?
yfxf kfP s
s] tkfO
tkfO{F Tof
Tof]
ˆNof6 lsGg' x'GYof] <
 Would you take this
gift overseas for an
acquaintance?
i ?
lrgfhfgsf] JolQmnfO{ v'zL t'Nofpg
tkfO{F of] pkxf/ ljb]z n}hfg' x'GYof] <
Would you buy this car
if yyou knew where it of] sf/ sxfF uPsf] lyof] eGg]
had been? yfxf kfP s] of] v/Lb ug{' x'GYof] <
 Would you give your d]nfdfOgaf6 k|b'lift 5 eGg]
children milk if yyou knew yfxf kfPP Tof] b''w tkfO{Fsf]
it contained melamine? afnaRrfnfO{ lbg' x'GYof] <
Would you let your daughter
of] sfdn] sxfF k'¥ofpF5 eGg] yfxf eP
tkfO{OFsf] 5f]/LnfO{O Tof] hflu/ vfg
accept this job?
cg'dlt lbg' x'GYof] <

Attractive female, 18-

24 years old, needed
for secretarial job for
international company
in Hong Kong. Call
xxx-xxxx to apply.
cfsif{s dlxnf, !*–@$ jif{,
xªsªl:ytl cGt/f{l{ i6«o
sDkgLdf ;]q]m6]/Lsf] nflu .
cfj]b] g llbg xxx-xxxx df
kmf]g ug{'xf];\ .
• You make decisions to • cfk""m / cfˆgf] kl/jf/sf] k"0" f{
best protect yourself and ;'/Iffsf] nflu tkfO{F lg0f{ox?
your family.
ug{'xG5 .

• When administering
d
development
l t assistance,
i t • ljsf; ;xofu
;xof]u Joj:yfkg ubfubf{
you make decisions of kl/of]hgfsf nfeflGjt kIfsf
behalf of project tk{maf6 lg0f{
tkmaf6 lg0fox?
ox? ug'
ug{xG5 .
beneficiaries.

• ;"rgfsf] cefjdf tkfO{F

• You can’t make decisions
without information.
lg0f{ox? lng ;Sg' x'Gg .
Conducting
C d ti Basic
B i
Due Diligence
g

cfwf/e"t oyf]l] rt
kl/>dsf] ;~rfng
kl/>dsf
 Objectives p2]Zo
p2Zo
• T
To understand
d t d the th • æoyf]
æoyflrt
lrt kl/>dÆ eGg]
eGg
term “due diligence” kl/efiff a'e\mg .

• To understand why • oyf]lrt kl/>d lsg

due diligence is cfjZos /xG5 eGg]
eGg
necessary a'e\mg .

• To learn methods of • oyf]lrt kl/>dsf

basic due diligence ljlwx? l;Sg .
 Due Diligence
g oyf]lrt kl/>d
oyflrt
• Evaluating g what risk is • s''g} lgsfo;Fu ;DaGw :yfkgf
involved in doing ug{ k"j{ sfd ubf{ slt
business with an entity hf]lvdk"0f{ x'G5 eg]/ ljZn]if0f
prior to establishing
p ga ug]{ tyf tTsflng hflvd
ug hf]lvd dfkg
relationship and
assesses risk at that ub{5 .
point in time
time.
• clwsf/Lx? //jf e|i6frf/;Fu
• Evaluating relationships ;+nUg cg'lrt
to find
fi d lilinks
k bbetween lqmofsnkfx?aLr ;Dks{ kQf
officials and/or illicit nufpg ;DaGwx? ljZn]if0f
activities linked to ub{5 .
ub5
corruption.
Due diligence is oyf]lrt kl/>d egsf
oyflrt eg]sf]
verifying an identity… klxrfg kli6
k'li6 ug]
ug====
{

using documents, data or b:tfj]h, tYofÍ Pj+

information…
;rgfx?
;" rgfx? k|of]fuu ug======
ug]{
from a reliable and
i d
independent
d t source. ljZj;gLo / :jtGq
>f]taf6 .
 “Know your æcfˆgf] u|fxs lrGg'xf];\Æ
customer”
t ” (KYC) (KYC)
• Term used in the banking • a}+lsª If]qdf k|of]u x''g] kl/efiff
i d t
industry
• Modified to fit other • cGo kl/b[iox? cg's"n agfpg
scenarios: kl/jt{g ul/Psf] M–
– Know your employee – cfˆgf] sfdbf/ lrGg'xf];\ (KYE)
(KYE)
– Know your vendor (KYV) – cfˆgf] laq]mtf lrGg'xf];\ (KYV)

• Intended to ensure that • Joj;flos sfo{ ;DkGg ug{ cufj}

critical information is
known about a company s''g} sDkgL jf JolQmsf] dxTjk"0" f{
or individual before ;"rgf hfgsf/L x'G5 eGgsf vflt/ .
embarking in a business
venture.
 What is a reliable and ljZj;gLo / :jtGq >f]t
independent source? eg]sf] s] xf] <
• Information known to be • ;DalGwt
; al wt sDkgLsf
s kgLsf cnfjf
obtained by sources other cGo >f]tx?af6 k|fKt ul/g]
than the company in ;"rgf
question
• ;~rf/ dfWod
• Media
• Internet • OG6/g]6
• Resource material • >f]t ;fdfu|L
• Incorporation documents • ;+of]hg b:tfj]hxx?
• Interviews • cGt/jftf{x?
• Site visits • :ynut e|d0fx?fx?
 Caution ;fjwfgL

• Not all information • OG6/g]6df pknAw ;a}

on the internet is ;""rgf ;xL x‘'b}gg\ .
accurate.
• OG6/g]
OG6/g6af6
6af6 kfKt
k|fKt ;rgf
;"rgf
• Verification of facts k'li6 ug{ tYox? :yflkt
may be necessary ug{ cfjZos kg
ug kg{ ;Sb5 .
to confirm
information from
the internet.
 Basic minimum cfwf/ett Go"
cfwf/e" Gogtd
gtd
• Obtain a copypy of the • btf{
btf/;ofhg
/;+of]hg b:tfj]
b:tfjhx?sf
hx?sf
registration/
incorporation
k|ltlnkL k|fKt ug{] .
documents
• ;~rfns ;ldlt /
• Identify members of the Joj:yfkgsf ;b:ox?
board and
management. klxrfg ug]{ .

• Confirm contact details. • ;Dks{ ;""rgfx? k'l' i6 ug]{ .

 Suggested due diligence criteria
Person Company
JolQm sDkgL
N
Name, address
dd gfd 7ufgf
gfd, 7]ufgf x x
Confirmed contact information
k'kli6
li6 ul/Psf
ul/Psf] ;Dks
;Dks{ ;"
;rgf
rgf x x
Date of birth/registration hGd/btf{ ldlt x x
Incorporation documents
;+of]hg b:tfj]hx? x
Beneficial ownership nfebfos :jfldTj x
Accuracy of past activities
ljut lqmofsnfksf ;Totf x x
 Additional useful
cltl/Qm pkof]
pkofuLuL ;"
;rgf
rgf
i f
information
i
• Affiliations and use of • cfj4tf / ;xfos Ph]G6x?sf]
sub-agents k|of]u
• Bank details • a}+ssf ljj/0fx?
assf
• Compliance history • cg'kfng Oltxf;
• Financial statements • ljQLo ljj/
ljj/0fx?
fx?
• References • ;Gbe{x?
• Resumes of key • k|d'v JolQmx?sf] JolQmut
i di id l
individuals l
ljj/0fx?
• History of criminal • ck/flws cleof]u ;DaGwL
charges of legal cases sfggL
sfg" gL d2fsf
d'2fsf Oltxf;
• Media reports • k]|; l/kf]6{x?
Why due diligence oyf]lrt kl/>d lsg
i iimportant
is t t dxTjk"0f{{ x'G5
 When to conduct oyf]lrt kl/>d slxn]
due diligence ;+rfng ug]{

• During Procurement • v/Lbsf] ;dodf

– To identify ownership – :jfldTj klxrfg
x ug{
– To determine
– ;DaGwx? lglZrt ug{
relationships
– To confirm eligibility – ofUotf
of]Uotf k'kli6
li6 ug
ug{
– To confirm – cg'ej k'li6 ug{
experience
• At time of payment • e''QmfgLsf] ;dodf
To identify
owners

dflnsx? klxrfg
ug{{
To confirm eligibility of]Uotf k'li6 ug{
To confirm eligibility of]Uotf k'li6 ug{
To confirm independence ;u7gsf
;+u7gsf] :jtGqtf k'kli6
li6 ug{
ug

Ali Baba Printing Alakazaam Printing Beezlebub Printing WE-BE PRINTING

cnL afaf 5fkfvfgf cnfsfhfd 5fkfvfgf aLhnaa 5fkfvfgf jL–aL 5fkfvfgf

To confirm presence

sDkgLsf] pkl:ylt k'li6 ug{

To confirm
legal entity
sfggL
sfg" gL lgsfo kli6
k'l 6 ug{
ug
To confirm experience
;+:yfsf]] cg'ej k'li6 ug{{
To confirm experience ;+:yfsf] cg'ej k'li6 ug{

A company
claimed to
build a tunnel
on this road

of]Uotfsf] k|df0f
:j?k sDkgLn]
sDkgLn of of]
;8sdf ;'?ª
agfpg] bfjL u¥of
agfpg u¥of]
 To confirm eligibility
k/fdz{bftfsf] of]Uotf k'li6 ug{
To confirm k|:tfljt JolQmsf]
experience cg'ej k'li6 ug{
To confirm awareness k/fdz{bftfx?sf] r]tgf /
rfxgf k'li6 ug{
To confirm
authenticity

e'QmfgL :jLs[
eQmfgL :jLstt ug{
ug cufj
cufj}
sfdsf] k|ltkmnsf] k|df0f
k'kli6
li6 ug{
ug
To pay the right ;xL sDkgLnfO{ e'QmfgL
company lbg
 oyf]lrt kl/>d xfdL
k|kTo]
Tossf
ssf] lhDdjf/L
lhDd]jf/L xf
xf]
Due diligence is
the responsibility of
each of us

Do not assume that someone else is doing it.

c? s;}
s;n n] u/L/fvsf
u/L/fv]sf] 5 e
eGg]g ;fr
;f]r gkfNgxf]
gkfNg'xf;\
;.
Case Study 36gf cWoog
• 3 year renewable contract,
based in UK
• GBP 8,7750/month (gross), six
months paid in advance
• Full benefit, including housing,
meals and transportation
• 2 months leave a year, GBP
4,805 paid per leave
• Other personals leaves and
sabbaticals as needed
• # jif{] gjLs/0fLo ;+emf}tf, a]nfotl:yt
• hLaLkL *,&&%/dlxgf -;du|_, 5 dlxgf
cufl8 g} e'QmfgL u/]sf]
• cfjf;, ef]hg / oftfoft ;lxtsf] ;'ljwf
• jif{df @ dlxgf ljbf, k|To]s ljbfdf hLaLkL
$ % sf]] b/n]] e'QmfgLL
$,*)%
• cGo JolQmut ljbf tyf cf/fd cfjZostf
cg'?k
cg?k
Step 1: Incorporation r/0f ! M– ;+of]hg
documents b:tfj]h
] x?
2. Google the
@ gfd u"uun
@= un ug'
ug{xf;\
f];
name
3. Google the
# 7]7ufgf
#= ufgf u"uun
un ug'
ug{xf;\
f];
address
dd
Google Earth 7]ufgf u"un cy{ klg
the address ug{xf;\
ug' f];
 4. Search the $= 6]lnkmf]g gDa/ ;r{
t l h
telephone number
b ug'{xf];
] \
5. Google the
% dflg; uun
%= u"un ug{
ug'xf]f;\
;
people
l
 6. Research ^= j}slNks j]a;fO6
alternate
l website
b i cg';Gwfg ug'{xf];
] \

E-mail address from

letterhead:
siemensoilandgas.eu.pn
 Findings glthfx?
!= ;Ld]G; t]n tyf Uof; a]nfotdf
1. Company
p y is not ;dfj]z 5 5}g .
incorporated in UK. @= k|:t't 7]ufgf ;Ld]G; a]nfotsf
2. Presented address nflu xf] .
b l
belongs to Si
Siemens UK
3. Peyton-Jones is HR
#= >L 6f]aL k]6g–hf]G; ;Ld]G;
Director Siemens UK
Director, a]nfotsf dfgj ;+zfwg
4. 1 website belongs to lgb]{zs x'g\ .
Siemens
S e e sU UK,, ot
other s $= ! j]a;fO6
e is O ;Ld]G; a]nfotsf]
registered to Pitcairn :jfldTjdf 5, csf]{ kL6s]g{
Island cfONof08;Fu btf{ 5 .
5. Telephone numbers %= 6]lnkmf]g gDa/x? sfd ub}{gg\ .
don’t work.
Look at metadata kmfOnx?;Fu ;DalGwt ljZn]if0fd'vL
tYofÍ k|bz{gd''vL x''g;Sb5 .
Resources used pbfx/0fdf k|of]u
i example
in l ePsf >ftx?
>f]tx?
• www
www.google.com
google com
• www.Companieshouse.gov.uk
• Google
G th u"un cy{{
l earth
 Use Your tkfOF{sf] cfˆgf] >f]t
R
Resources k|kof]
ofuu ug'
ug{xf]f;\
;
• Knowledge • 1fg
• Critical thinking skills • cfnf]rgfDs tj/n] ;f]Rg]
• Intuition zLk
• Colleagues, Friends, • cGt/1fg
Neighbors • ;xsdL,
;xsdL{ ldq, ldq l5dsLx?
l5d]sLx?
• Internet • OG6/g]6
• Telephone • 6]]lnkmf]]g
• Ask questions! • k|Zgx? ;f]Wgxf];\ Û
 Independently verifify ljutsf lqmofsnfkx?sf]
past activities*
activities :jtGqq ki6L
:jt k' 6L *
• k'i6L
• Confirm
– Activity – lqmofsnfk
– Contract value – ;+emf}tfsf] d"No
– Length of contract + t} fsf]] nDafO{{
– ;emf}
– Variations to contract – ;+emf}tfsf] ?kfGt/x? -k|;f/,
(extension, additional cost, cltl/Qm dNo " cflb__
etc)
• With employer, PIU, or
• sfdbftf, kLcfO{o", jf ;+emf}tf ug]{
contracting party kIf;Fu
• With donor • bftf;FuF
• Through internet search • OG6/g]6 ;r{dfk{mt
* Strongly encouraged for all * ;a
;a} ;Defljt Joj;flos
potential business ;DaGwx?sf nflu hf]8tf]8n]
relationships
k|f]T;flxt
 alxis[t If]qx?sf
Excluded territories
nflu gf]
gf66
The following have been
determined by OGC to be lgDgnfO{ cf]hL;Ln] u}/ ;b:o /fi6«
non member countries tf]lslbPsf] 5 / Pl8aLsf] nufgL
andd are nott eligible
li ibl tto /x]sf] lqmofsnfkx?df ;xefuL xg
/xsf
participate in ADB-funded cof]Uo 7x/ u/]sf] 5
activities – ad'8f
ad{
– Bermuda – dfg 6fk"
– The Isle of Man – s]dfg pkåLk
– The Cayman Islands – hLa|fN6/
– Gibraltar – g]b/Nof08 PG6Llnh
– The
Th Netherlands
N th l d Antilles
A till – a]nfotL elh{g pkåLk
– The British Virgin Islands
 Always conduct ;bf oyf]lrt
due diligence kl/>d
l ug{'{
• Verify • ;+of]hg/btf{ k'i6L ug{'xf];\
Incorporation/Registration
p g • ljutsf lq lqmofsnfk/;Gbe{
ofsnfk/; bex? x?
• Check past hfFr ug{'xf];\
performance/references • :jfldTj yfxf kfpg''xf];\
• Know ownership • ef}lts pkl:ylt hfFr ug{'xf];\
• Test p
physical
y p
presence • k|ltaGwsf
ta wsf ;" ;rLrL hfr
hfFr ug{
ug'xf]f;\
;
• Check the sanctions list
 Present concerns OdfGbfl/tf pNn+3gsf
to OAI ;/f]s
] f/x? OdfGbf/Ltf
L pNn3g +
sfof{nodf k]z ug{'xf];\
• Email Od]n : integrity@adb.org
• Hotline x6nfOg : +(63)2
( ) 632-5004
• Secure Fax ;'/lIft ˆofS; : +(63)2 636-2152
• http://www.adb.org/integrity/complaint.asp
http://www adb org/integrity/complaint asp

You may also report :yfgLo k|zf;gsf] pko'Qm

them to appropriate zfvfx?df ;d]t ph'/L
branches of local law lbg ;Sg'x'G5 .
enforcement.
enforcement