Steps to mitigate risk
These developments have led to an increased financial crime risk for publicly procured large-scale infrastructure projects. Changes to sanctions regions have also impacted the sustainability of certain cross-border partnerships and investments.
Many of the risks can be effectively mitigated by the risk management steps set out in our Corruption & Financial Crime module [linked], which include the conduct of financial crime due diligence and risk assessments. In addition to standard anti-bribery due diligence, we recommend due diligence questionnaires enquire about a proposed partner's compliance with the rules of government COVID-19 support schemes, and for sight of documentation to evidence the approach taken. In projects accessing funding from multilateral development banks, continued compliance with the integrity standards of these funders is essential.
The module recommends that compliance Key Performance metrics should be put in place for joint ventures to report on their performance in relation to compliance training, 3rd party due diligence, gifts & hospitality registration, and the conduct of internal investigations. In light of the developments noted, we recommend that joint venture partners also closely monitor a joint venture's compliance with tender, furlough and other government support rules. Internal investigations should be designed and scoped taking account of the expectations of funders, joint venture partners' external auditors, as well as national and international regulators. Where possible, harnessing technology as part of compliance programme enhancements can be used to mitigate the challenges posed by ongoing travel lockdowns or other restrictions arising from the pandemic – whether use of these tools is to carry out vetting of supply chains or for analytics to monitor financial transactions.