During the operation of an engineering business in Africa, our client, a large state-owned enterprise (the “Client”), and its subsidiaries were investigated by the African Development Bank (“AFDB”), the investor of a project by the Client. There was an intention to impose a sanction on the Client, which would have prevented them from participating in any projects funded by multilateral development banks, including the AFDB, during the period of the sanction. Furthermore, according to the 2010 Agreement on Mutual Enforcement of Debarment Decisions (the “2010 Agreement”), which was entered into by several multilateral development banks, an entity sanctioned by the AFDB would also automatically blacklist other multilateral development banks as parties to the 2010 Agreement, causing an adverse effect on the Client’s business.
JunHe assisted the Client in its negotiations with the AFDB, in an attempt to reduce the extent and the term of the sanction; in 2017, both parties entered into a Settlement Agreement, whereby the AFDB imposed a conditional non-debarment upon the Client for a term of three years, which significantly reduced the extent and the term of the sanction. JunHe assisted the Client in the entire process of developing and implementing compliance policies consistent with the standards of multilateral development banks including the AFDB, and established and executed a compliance system at the group level in accordance with internationally accepted principles. JunHe also successfully responded to the AFDB’s compliance investigations on other projects of the Client. In 2019, the Client obtained the AFDB’s decision on the early release of debarment of the Client.
This is another successful case whereby JunHe helped a Chinese state-owned enterprise to obtain an early release of debarment through cooperating in a compliance investigation by a multilateral development bank, and building and implementing a well-established compliance system consistent with the standards of multilateral development banks. The early release of debarment reflects positively on the Client’s integrity. It also highlights JunHe’s excellent service in integrating compliance systems in accordance with the current standards of multilateral development banks, alongside the existing policies and systems of a Chinese SOE. JunHe assisted the Chinese SOE in responding to the compliance investigations and established and implemented a compliance system in accordance with internationally accepted principles.
Over the past two years, JunHe’s team played an important role in this project and made enormous efforts and contributions to ensure the AFDB and its independent compliance advisor (Monitor) understood the practical difficulties faced by a Chinese SOE. The Chinese-style resolution in respect to the establishment and implementation of a compliance system in accordance with international standards, had a positive effect in the AFDB consenting to an early release of debarment of the Client. JunHe’s team in this project was highly praised by the Client, AFDB, and its independent compliance advisor. JunHe worked with Hughes Hubbard & Reed on this project.
Partner Christine KANG led JunHe's team.