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Q66.

Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?

66a. Legal framework

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SCORE: 0/100

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66b. Sanctions

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SCORE: 0/100

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66c. Enforcement

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SCORE: NA/100

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66d. Training

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SCORE: 0/100

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The Law on Competition provides for the prohibition of agreements or coordination of action among two or more companies that affect prices directly or indirectly, limit or control the production or market, make arrangements on sharing the markets and supplies, apply conditions that place the competitors in a competitive disadvantage [1]. The Criminal Code punishes violations of equality in public tenders with a prison sentence of up to three years [2]. The Competition Authority produces guidelines to combat prohibited bargaining, which to be used by procurement officials. The guidelines require procurement officials, as well as external experts hired to receive regular training [3].
The Law on Public Procurement (LPP) sets what constitutes a conflict of interest between officials and bidders and between bidders [4]. However, no specific clauses are included in the protection of competition in the legal framework for the defence procurements that are excluded from the LPP.

The Law on Protection of Competition is considered to be “largely aligned” with the Treaty on the Functioning of the European Union and the secondary legislation is broadly in line with the relevant EU regulations and Commission guidelines [1].
The LPP authorizes the Public Procurement agency to expel companies from participating in tendering procedures those companies on which the Competition Authority has given a ruling for involvement in prohibited agreements [2].
The LPP allows the contracting authorities to exclude any candidate or bidder from participation in the procurement procedure when there is evidence that they are, or have been convicted for any of the following offences:
­ participation in criminal organizations;
­ corruption;
­ fraud;
­ money laundering;
­ forgery;
­ provision of false information;
­ conflict of interest [2].
The LPP empowers the contracting authority to demand bidders to present court documents or documents issued by the competent authorities that certify that the bidder is cleared from the above-mentioned offences. The contracting authority may demand such information directly from these authorities if it considers necessary for the integrity and the personal situation of the bidders concerned [2].
Although the LPP provides for the exemption of the procurement of the weapons, ammunition and defence material from the obligations deriving from this law, it states that this exemption should not adversely affect the free competition for products that do not serve genuine military purposes [2]. However, in the legal framework for defence procurements that are excluded from the LPP, no sanctions are included. The Decision of the Council of Ministers 1403 allows for the suspension of a decision on a procurement procedure in a case where a complaint has been filed until the complaint has been addressed (within 10 days) [3].

This indicator has been marked Not Applicable. There are no publically known cases of investigations or prosecutions that have been conducted into breaches of the competition legislation in the defence and security sector. However, the Competition Authority scrutinises the implementation of the law and produces annual reports. In 2017, the Competition Authority adopted 47 decisions, 52 decisions were adopted in 2016, and 51 decisions were adopted in 2015 [1, 2].
No decisions taken by the Competition Authority involve cases related to defence and security procurements. Given the limited transparency in defence procurements, and the overall issues with investigations and prosecutions in Albania, the lack of investigations is not indicative of a lack of collusion [1, 2].

The Competition Authority has organized training with procurement officials and judges [1,2]. In 2016, 45 officials were trained, in training activities in the country and aboard, and 44 officials were trained in 2017 [3,4]. The Public Procurement Agency (PPA) has participated in training on defence procurement organized by the Technical Assistance and Information Exchange Instrument of the European Commission [5].

Art. 49 of the Anti-Corruption Law mentions collusion with regards to exemption and mitigation of sentences. Art. 49 says that a person who has committed or is complicit in one or more offences and makes it possible to identify the persons implicated shall be entitled to an absolute excuse under the conditions provided for in the Criminal Code. Art. 52 of the same law stipulates that the provisions on complicity provided for in the Criminal Code shall apply to the offences provided for in this law (1). Numerous articles deal with collusion, including Art. 42, 43, 44, 91, 92 (2). Art. 42, for example, states that participants in the offence are considered accomplices to an offence if they knowingly aided and abetted the perpetrator or perpetrators of the action in the acts that prepared or facilitated it. Thus, no side is excluded from the law (2). No clear reference to the defence sector was made in both laws. The 2016 Public Procurement Law does not mention collusion (3). It is not clear if anti-corruption training addresses collusion. Reportedly, training conducted by the ONPLC included the legal and institutional framework for fighting against corruption, transparency in public life, the code of conduct for public officials, and recriminations, fraud risks in public procurement and internal control (4), (5).

Art. 33 of the Anti-Corruption Law mentions sanctions against individual public officials. It says that any public servant who intentionally abuses his/her office or position to obtain an undue advantage for himself/herself or another person or entity should be punished of two to ten years in prison, and a fine up to 1,000,000 DA (1). Art. 75 of the 2016 Public Procurement Law mentions reasons why biding companies can be excluded from participating in public procurement, for example, bankruptcy or non-compliance with their tax obligations (2). No reference to collusion or the defence sector was made in either law.

This sub-indicator has been marked Not Applicable because research has found no public cases of collusion in the defence sector during the last few years. And public cases of collusion in the civil sector during the last few years have not been found either. According to a US Department of State report, the government does not always provide information on disciplinary and legal action against the military, police, or security forces, even though existing laws allow for the possibility of investigating abuses and corruption (1).

Therefore, the question can only be answered, if at all, by referring to the general state of the judiciary and criminal justice systems in Algeria (2). Freedom House notes that the judiciary lacks independence and the government puts pressure on it. The president appoints all judges and prosecutors. The report also states that security forces frequently undertake warrantless searches (3). Furthermore, the Bertelsmann Transformation Index (BTI) critically assesses Algeria’s anti-corruption efforts stating that there is a lack of an independent judiciary, and notes there is unimplemented anti-corruption legislation (4).

Reportedly, training conducted by the ONPLC included the legal and institutional framework for the fight against corruption, transparency of public life, the code of conduct for public officials, and recriminations, fraud risks in public procurement and internal control (4 and 5).

Article 9 of the 2016 Public Procurement Law prohibits collusion between an official and a bidder, as well as between bidders (1). However, Article 7 exempts arms and military logistics procurement from the law (1).

There is no legislation covering defence procurement that addresses collusion. Thus, this indicator has been marked Not Applicable.

The public procurement law grants authority to officials of the National Public Procurement Service (SNCP) to blacklist companies and senior officials found guilty of corruption, collusion, fraud or other criminal acts for the duration of one to three years and apply heavy fines (more than 20% of the contract value) for repeated offenders of particularly serious infractions (Art. 56, 1.) (1).

There is no legislation covering defence procurement that addresses collusion. Thus, this indicator has been marked Not Applicable.

There is no evidence that comprehensive training has been provided so far.

National legislation, the Law of Public Ethics, and specific provisions regarding the conflict of interests offer the general legal framework for collusion between bidders and officials. The 2018 Competition Law creates a new decentralised and autarkic body within the scope of the Executive Branch, the National Competition Authority, which has within it, the Court of Defence of Competition, the Secretariat of Instruction for Anti-Competitive Behaviors, and the Secretariat of Economic Concentrations.

The penalties related to collusion between bidders are defined in the Law on the Defence of Competition. [1] There is an economic sanction of up to 30% of the volume (or up to double the profit obtained) of the business linked to the anti-competitive activity. The possibility of prosecution is included, as the law creates the Specialised Chamber for the Defence of Competition as a judicial reviewing body of the decisions issued by the Court of Defence of Competition. That is, the sanction (economic fines) is only made after that judicial review. The law also incorporates disqualification and immediate nullity in the so-called hard core cartels. On the other hand, the penalties regarding collusion between bidders and officials are not specifically detailed in the legislation, rather the existing approach is of a preventive nature. [2] [3] [4]

This indicator has been scored Not Applicable. There is a 2018 law regulating collusion, but it has not been possible to identify recent cases on the subject. Hence, there are no identifiable cases that could be used to verify the applicability of this law. Articles and commentary on jurisprudence on this matter in Argentina appear to have been written before the 2018 law. A 2019 OECD report identified only 2 tried cases involving collusion (bid-rigging), both prior to 2018. Collusion is difficulat to identify in Argentina, since payment of public contracts are slow and many corruption acts take place to speed up payment. According to del Pino and del Río “there have been very few cartels that have been discovered, which has become a jurisprudence with very few investigations for collusion, some of which have been completely reversed in judicial headquarters.” [1] Although the new legislation incorporates a clemency program in order to facilitate the investigation of cartels, the application of the law by its recent approval cannot be evaluated. In this sense, it is still in the process of definition. For example, at the end of 2018, the National Commission for the Defence of Competition submitted a draft of guidelines for the analysis of cases of abuse of dominant positions to the interested public. [2] In April 2019, a call for the position of National Competition Authority was opened. [3] The Collective Justice organisation points out some problems within the new legislation, such as the lack of participation of consumer defence associations and the tacit approval of mergers when the authority was not issued. [4] [5]

A November 2019 OECD Report includes a recommendation for Argentina to implement a capacity building programme on bid-rigging and collusion. No information was found to indicate that this has been done. [1]

Chapter 2 (Articles 5, 5.1 and 5.2) of the Law on the Protection of Economic Competition defines term “anti-competitive agreement” (հակամրցակցային համաձայնություն) in such a manner that it resembles to the internationally recognized concept of collusion in procurement processes. [1]
The Law on Procurement provides clauses on anti-competitive behaviour when any bidder is prohibited to participate in the bid in case the company he/she was deprived of participation for a year for anti-competitive behaviour (Article 6). However, the law does not provide clauses for collusion amongst bidders [2].
In addition to Clause 2.2 of Article 38 of the RA Law on Procurement, Article 12 of the same law stipulates that “where an unlawful act within the framework of the procurement process is detected, which is committed by the bidder or a representative of management body thereof, the contracting authority shall, on the day of its emergence, notify law enforcement bodies about that in writing”. [3].

Article 6 of the law provides the cases when the bidders are not eligible to participate in the bidding. Thus, those individuals or companies that were charged for terrorism financing, child or human labour trafficking, bribery, and other activities against economic competitiveness are prohibited to apply for bidding. [1] As regards to the illegal actions in the procurement procedure, according to the Article 12 of the Law on Procurement, when an unlawful act within the framework of the procurement process is detected, which is committed by the bidder or a representative of management body thereof, the contracting authority shall, on the day of its emergence, notify law enforcement bodies about that in writing. However, this is not enough to refuse the participant application or to settle the contract sealed with him/her unless there are none of the prescribed grounds provided by the Article 6 of the Law on Procurement [2]. For instance, the company of the Former Economy Minister Karen Chshmarityan appears on the “blacklist” based on the records of National Security Service and Ministry of Defence for the failure to comply with procurement rules [3].
Actions of participants in the procurement process can be qualified as illegal only by law enforcement authorities, and therefore the RA legislation on procurement does not provide for the rejection of bids until such assessment is made by law enforcement authorities.[4].

The cases bearing criminal behaviour are passed to the Prosecutor’s Office for investigations (and here the Criminal Code is applied). Otherwise, the individuals/companies that break application procedures and ethics, appear in a “blacklist” and are avoided from cooperation [1]. Just after the Velvet Revolution, a criminal case has been instituted on abuses of defence purchases and army building. Former high-ranking officials of the Defence Ministry, including the former Minister of Defence Seyran Ohanyan, were summoned for interrogation [2]. However, before the revolution, there were cases, when corruption in defence procurement sphere was not even normally investigated [3].

According to a procurement expert, there is no specific training of procurement officials to identify collusion [1].

The Competition and Consumer Act 2010 defines the scope of “cartel conduct”, or collusive business practices, as “price‑fixing; or… bid‑rigging; by parties that are, or would otherwise be, in competition with each other,” [1] limiting the legal definition of collusion to bidders only. This is confirmed by the wording of an Australian Competition and Consumer Commission (ACCC) fact sheet: “A cartel exists when businesses agree to act together instead of competing against one another” [2].

Australia has been criticised for not having a formal debarment regime to exclude companies accused of bribery, corruption, and anti-competitive practices, though procurement officials are allowed to exclude companies and officials in the absence of official guidelines. The OECD [1, 2] and Transparency International [3] have both expressed their concern at a lack of government-wide debarment regime over several years. Additionally, there is a lack of consistency in debarment policy. The OECD Phase 4 report on Australia’s implementation of the Anti-Bribery Convention states that since at least 2012, “Australian public procurement agencies had the discretion to debar companies convicted of domestic or foreign bribery. It was a matter for individual agencies to develop their own policies in this regard” [1]. The Senate Economics References Committee inquiry into Foreign Bribery report recommended in March 2018 that the government introduce a consistent and comprehensive debarment policy [4], but the government has not responded to or acted on this recommendation as of October 2019 [5]. Beyond debarment, significant financial sanctions for proven anti-competitive conduct by companies can be applied, up to $10,000,000, or 3 times the value of the benefit derived by the conduct, or 10% of annual turnover, whichever amount is greater [6].

The legal system in Australia is generally considered robust and without undue influence, with Australia ranked 12 of 126 countries for the quality of its criminal justice system by the World Justice Project in its 2019 Rule of Law Index [1]. Major cases are regularly brought and prosecuted by the Australian Competition and Consumer Commission and criminal prosecutors under the Competition and Consumer Act 2010 [2], including recent examples in politically sensitive areas such banking [3]. There have been cases brought against companies for conduct involving Defence contracts, though not recently [4].

There is no evidence that Defence procurement officials receive any training in mitigating and detecting collusive practices [1]. The ACCC in 2011 released guidelines to help public procurement officials manage collusion risk and provide tools to detect collusion [2]. As recently as 2015, the Defence Policy Procurement Manual (DPPM) contained advice that Defence procurement officials should be aware of collusion risks, and what to do if collusive behaviour was suspected [3]. However, these references to collusion awareness are no longer present in the July 2019 version of the DPPM [4], implying that identifying collusive practices may be less of a training priority for procurement officials than it once was.

There is no legislation specific to the defence and security of measures to punish collusion between bidders for defence and security contracts. However, according to Article 11.2 of the Law on Public Procurement, the procuring entity may decide to reject all bids if it determines collusion between the bidder during the tender procedures. The law on unfair competition is also forbidden in cases where competition is restricted (1).
The Law on “Entrepreneurial Activity” (Article 7.1) states that the duties of an entrepreneur include the following: comply with the anti-monopoly legislation; to prevent the use of unfair competition methods; to report on its activities to the state, statistical and financial authorities in the form prescribed (2).
The Law on Unfair Competition (Article 3) states that there are the following forms of unfair competition in entrepreneurial activity: imitation of opponent’s economic activity; to discredit the opponent’s economic activity; interference with the economic activity of the opponent; unfair business activity; unfair business behaviour; misleading consumers (3).
The Civil Code (4) and the Criminal Code (5) prohibit collusion that violates free competition. The Criminal Code warns of imprisonment of up to three years (Article 199). According to Article 10 of the Anti-Monopoly Law, cartel collusion restricts competition (6). Nazim Beydemirli says the adoption of the Competition Code, which has been debated in Parliament since 2007, is delayed for an unknown reason (7).
According to Zohrab Ismayil, the existing legislation is very “soft” and does not fully cover the responsibility of the parties involved in collusion. At the same time, there is no information on any kind of workshops and seminars on the current legislation (8).
Ismayil Alakbarov, founder and head of Neuron Technologies, one of the well-known IT companies in Azerbaijan, has accused the Azerbaijani government of holding tenders illegally and allowing serious misconduct in this area. The entrepreneur said that winners in 90% of public procurement were previously announced: “The State Tender Bidding Commissions award tenders to the companies they have previously defined.” According to him, “[t]here are gaps in the legislation, I suggest that the law on procurement with the participation of entrepreneurs be revised and changes will be made, and businessmen have a lot of proposals” (9).

The Civil Code (1) and the Criminal Code (2) prohibit collusion that violates free competition. The Criminal Code warns of imprisonment of up to three years (Article 199). Nazim Beydemirli believes, no one has been arrested in Azerbaijan under this article so far, although many criminal cases have taken place (3). Procurement officials have limited authority to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery & corruption-related offences. But there is no sanction mechanism. Natig Jafarli believes that there is almost no free and competitive bidding. In most cases, the winner of the tender is declared as a result of certain assignments coming from the president’s administration (4). The tenders related to the defence and security sector are essentially the same (4). The recent tender at the Ministry of Emergency Situations is an example (5).

No one has ever been arrested in Azerbaijan for “collusion in the tender”. The public is not informed about “collusion offences” that have taken place, and the results of investigations (if there are any) are not publicly disclosed (1, 2). Ismayil Alakbarov, an entrepreneur, has accused the Azerbaijani government of holding tenders illegally and allowing serious misconduct in this area. Alakbarov said that winners in 90% of public procurement were previously announced. “The State Tender Bidding Commissions award tenders to the companies they have previously defined,” and no one was punished for this (3).

There is no information on any kind of workshops or seminars relating to the current legislation (1).

There is no legal framework that covers defence and addresses collusion between bidders themselves or bidders and the Ministry of Defence (MoD) [1, 2]. Following a search of the websites of the Parliament, the MoD, the Ministry of Finance, the government and other media sources, and then verified by interviewees, no more information was available on this subject.

As outlined in 66A, there is no legal framework that covers collusion in the procurment process [1, 2]. This indicator has therefore been marked ‘Not Applicable’.

As outlined in 66A, there is no legal framework that covers collusion in the procurment process [1, 2]. This indicator has therefore been marked ‘Not Applicable’.

There is no training provided to address collusion in the procurement process. Sources confirmed that no training has been provided in the last five years [1, 2].

Section 30 of DP-35 [1] prohibits collusion, but it is limited to bidders only.

As per Section 30 of DP-35 [1], the Secretary of the Ministry of Defence has the final say on cancelling contracts when allegations of bribery, commission or other gratuities are established through the due process.

Although DP-35 outlines such a process [1], there is no information about the blacklist or debarment list on the DGDP or MoD websites [2,3] to suggest that this provision is enforced effectively. In the absence of any publicly available evidence of a list or register of cancelled contracts, it is not possible to ascertain whether such cancellations occur frequently or rarely, or whether there has been any undue influence or bias in such decisions, if any. Given that there is no available information on enforcement, this indicator is not scored and is marked ‘Not Enough Information’.

There is no training provided for procurement officials [1].

Book IV of the Code of Economic Law prohibits collusion between bidders in articles 5 and 6. Articles 245-247, which details consequences of bribery of public officials, and 314, which talks about fraud in industry, of the Penal Code apply on collusion between an official and a bidder [1, 2].

The Law on Public Procurement states that, for procurement surpassing the treshold of EU publication, companies can be excluded from the procurement process in case they are convicted of fraud, bribery or other forms of corruption [1]. The law also states that this article applies within five years of the transgression, and may be dropped if the company can prove it took the necessary corrective measures, as stipulated in Article 70, to ensure their reliability and integrity. According to the definitions in Article 2, the law applies to both companies and their company officials if they are involved in the procurement process. Equally, the Royal Decree of 18 April 2017 stipulates in article 61the offences which lead to exclusion in the procurement procedure [2]. The Penal Code stipulates the punishment of bribery of officials. This includes bribery by companies [3].

There is Not Enough Information to score this indicator. No evidence of collusion cases between bidders for defence and security contracts was found. Additionally, there is no evidence of any undue political influence in cases of corruption or conflict of interest in the defence sector [1, 2].

Training to identify collusion patterns and to report potential malpractice is part of the code of conduct training which all individuals working in procurement receive [1, 2]

The Public Procurement Law of Bosnia and Herzegovina (PPL) does not specifically prohibit collusion [1]. However, the issue is regulated by the 2011 Competition Law, which prohibits agreements, contracts (explicit or informal) and other actions aimed at distorting competition. This includes price-fixing, the informal division of the market, limitation of production, etc. [2]. There is no legislation specific for the defence sector in this regard. There is no evidence of procurement officials being trained to identify collusion patterns.

There is no legislation which applies to the defence sector with regards to collusion, consequently this indicator is marked Not Applicable.

The Competition Law provides for the possibility of exemptions based on contribution to the country’s economic and technical progress and it is approved by the Competition Council (Article 4) [1]. The law imposes fines of up to 10% of the total annual income of the economic entity which has violated its provisions. Fines between 15,000 KM – 50,000 KM can also be imposed on individuals [1].

Article 45 of the PPL specifies that the contracting authority has to reject participation or the offer of the bidder that has been convicted by a final judgment for organized crime, corruption, fraud or money laundering, following the regulations in force in Bosnia and Herzegovina or the country in which he is registered [2].

There is no legislation which applies to the defence sector with regards to collusion, consequently this indicator is marked Not Applicable.

There is no track record of cases investigated and prosecuted in the defence sector. In 2016, the Competition Council of Bosnia and Herzegovina received 34 cases, out of which 19 cases (55.9 %) dealt with the cases of prohibited competition action. The Competition Council adopted five decisions concerning the determination of prohibited agreements and misuse of dominant position [1]. One decision was adopted concerning the determination of individual exemption from prohibited agreements [2].

The official training provided does not cover the topic of collusion [1].

According to the government reviewer, the MoD in cooperation with its partners conducts training in public procurement and logistics issues. Within the program with CIDS, training was organized with all participants in public procurement commissions, eg. in 2015, training was organized according to Decision No. 10-33-2-2033/15 of 27.05.2015. It should be noted that the Council of Ministers has appointed two experts in the field of Public Procurement to the Commission to amend the Law on Public Procurement, who are employed in this ministry, and based on the assessment of others, a great contribution was made to the creation of preconditions to improve the PPL.

Collusion by bidders taking part in any BDF procurement is punished in tems of the PPADB Act and the CECA Act [1]. Collusion falls within corruption and it is treated as a criminal offence and it is sanctioned as such. Further, PPADB Operations Manual provides inter alia that 1) Every effort should be made to create an equal and fair competition between Suppliers. The Suppliers should be confident that the Tender process, the specification, and its evaluation are strictly controlled and that the process is conducted openly and transparently [1].
2) Suppliers/ contractors are prohibited from participating in the practice of multiple bidding, which distorts competition and creates uneven playing field for other contractors.
3) Any supplier found to have submitted more than one bid shall be disqualified from further evaluation and will be referred to the Competition Authority for further and appropriate action [2]. The law is couched in such a fashion that in its interpretation, it includes collusion between a bidder and an official. This has been confirmed in case law [4].

Sanctions are in two phases, first, under the PPADB Act and second, under the CECA Act [1]. The former provides for administrative measures in particular Suspension and Debarment [1]. The later provides for criminal sanctions under the CECA. For example, section 32 of the CECA Act (1) A person is guilty of corruption if he directly or indirectly accepts or agrees to accept for himself, or any other person, any valuable consideration as an inducement or reward for or otherwise on account of his refraining or having refrained from bidding at any auction conducted by or on behalf of any public body [1].
(2) A person is guilty of corruption if he directly or indirectly gives or agrees or offers to give any other person any valuable consideration as an inducement or reward for or otherwise on account of that other person’s refraining or having refrained from bidding at any auction conducted by or on behalf of any public body [2]. Both the company and the responsible officials are subject to sanctions. For example, by virtue of Circula No 2 of 2021, on 25 February 2021, PPADB Suspended and Debarred, Ripple Business Ventures for 36 months, this included both the Company and its Directors [3].

Enforcement has been problematic, with corruption taking deep roots in Botswana especially within government ministries. Graft busters at the Directorate on Corruption and Economic Crime (DCEC) have found it difficult to curb corruption in general including the BDF [1]. In one such example, appearing before the Public Accounts Committee, DCEC Director General Brigadier, Joseph Mathambo, was unapologetic informing the parliamentary committee that the corruption bursting organisation has not achieved any growth for the past 10 years yet corruption has grown significantly [2]. “All law enforcement agencies are given some bit of autonomy and have their own budgets like Botswana Defence Force, Botswana Police, Prisons department and Directorate of Intelligence Services while we are under Directorate on Public Service Management thus not having our own budget,” Mathambo cried out [2]. For example, by virtue of Circula No 2 of 2021, on 25 February 2021, PPADB Suspended and Debarred, Ripple Business Ventures for 36 months, this included both the Company and its Directors [3].

Procurement officials usually have an appreciation of corruption before they start work on procurement [1]. The assumption is that they would have the necessary training [1]. In addition, there is training not just on collusion but on corruption as well [2]. As explained earlier, the training is not on regular basis but ad hoc basis and also on demand by the BDF [2]. The PPADB has a Capacity Building program for procurement officials. The PPADB provides inter alia that:
“T​​he Public Procurement and Asset Disposal Board training program aims to create awareness and appreciation of the requirements of the PPAD Act and Regulations as well as international best practices in public sector procurement. The Public Procurement and Asset Disposal training program aims to create an awareness and appreciation of the requirements of the PPAD Act and Regulations and international best practices in public sector procurement.
The program focuses on building the requisite knowledge and skills required to apply the requirements of the Act & Regulation in the day to day management of public procurement and asset disposal. Procurement practitioners and contractors equipped with the skills to understand the following;
– The structure of the legal and regulatory framework for public procurement and the key features of each constituent part.
– Procurement Planning
– Procedures, processes and controls in tendering
– Public Procurement Principles.
– Preparation of tender documents.
– Evaluation, adjudication and award of tenders.
– Debriefing.
– Preparing winning bids.
– Bid Protest,etc.”

The Anti-corruption Law (Lei Nº 12.846) [1] applies to the defence sector and establishes in Article 5 that collusion of any type (whether between bidders or between officials and bidders) as a crime under this law; and also the exclusion of bidders involved in such practices. In response to an information request, the Ministry of Defence also stated that the Anti-corruption Law is applicable to all the acquisitions made by the ministry, regardless of the nature of the acquisition (whether it is secretive, strategic, or not) [2].

The Anti-corruption Law, in Article 6, establishes criteria regarding fines to companies that have frauded or colluded in public biddings. Together with these criteria, it establishes that a notification has to be sent to the Union Public Attorney Commission [1], which can lead to a criminal process that can condemn the responsible to jail. There are many examples of the Union Public Attorney Commission practice in cases of corruption between government and private companies can be found in the Car Wash Investigation [2].

The Anti-Corruption Law in Brazil has already positively impacted corruption investigations, especially in the Car Wash Investigation [1]. However, the assessor could not find evidence of its application in defence acquisitions. As such, this indicator has been marked ‘Not Applicable’.

One of the main institutions responsible for prosecuting military officials involved in corruption and also the companies that sell services and products for defence institutions is the Military Public Ministry (MPM). However, according to an interviewee, this institution may exert undue influence on how prosecutions and investigations proceed since it has absorbed the military ethos [2].

Training is not advertised on their websites. All the training available is limited to the already known bureaucratic process of the Procurement Law and the ones related to the external control of the Court of Auditors (TCU) [1, 2]. However, according to a military interviewee, whenever a military official is assigned to a position related to procurement, there is general training that tackles the problem of collusion [3].

According to the Executive Secretary of the National Anti-Corruption Network (REN-LAC), “there is no legal framework available, which is specific to the defence sector addressing collusion between bidders; and the practice is widespread” (1). While no law prohibits collusion within the defence sector, Law No, 039, does prohibit collusion. Article 50 of Law No. 039 addresses collusion: – (2) among people working for the contracting authority – (11) among bidders. Therefore, in absence of a specific law or a given article within Law No. 038, on the general status of the personnel of the armed forces addressing collusion in the defence procurement, Law No. 039 addresses collusion, and it applies to the defence procurement, like any other government institution (2), (3).

According to the Executive Secretary of the National Anti-Corruption Network (REN-LAC), “as there is no legal framework specific to the defence prohibiting collusion, then there is no sanctions as well” (1). However, Law No. 039 addresses offences to its provisions. Article 50 prohibits collusion, conflicts of interest, abuse of authority, corruption, facilitation payments and favouritism. For example, collusion between people working for the contracting authority engenders a jailed term from two to twelve months and a fine from 100 000 CFA francs to 500,000 CFA francs or one of these punishments (Article 50. 2). As for collusion between bidders displayed under Article 50 (11), offenders are fined from 300 000 CFA francs to 500 000 CFA francs and a jailed term from 2 months to 12 months. For offenders convicted with conflicts of interest, fine ranges from 1,000,000 to 10,000,000, and jailed term from 6 months to 12 months or one of the two sanctions (1), (2), (3).

Defence procurement for secret military expenditures is excluded from the provision of procurement laws. According to the Business Anti-Corruption Portal, enforcement of the law is weak (1), and this resulted in widespread corruption in all sectors of the economy (2). For example, according to the US DoS (2012), the “gendarmerie is responsible for investigating corruption within the police and the gendarmerie units, but it never made its report public”. And further, local NGOs such as the REN-LAC have already reported a complete lack of political will to address corruption affirming that the government rarely applies sanctions against public officials. Hence, cases a superficially investigated, and do not serve as a deterrent for perspectives offenders (1), (2), (3), (4).

This indicator has not been assigned a score due to insufficient information or evidence.

Articles 4 and 71 of the Procurement Code (2018) clearly state that defence and security-related procurement are “Special Contracts and are not subject to tenders or OTC markets and the consideration of any public procurement commission under this Code” [1].

Research did not provide us with evidence of collusion in defence procurement by companies named on the ARMP website, where all companies banned from procurement are listed along with the reason, with the exception of one company that built a National Security building, which does not fall under the “Special Contracts” of Article 71 of the Code [1] [2].

Nonetheless, according to the Business Anti-Corruption Portal, “Cameroon’s public procurement is plagued by bribery and fraud at every step of the process” [3].

Companies involved in corruption are prosecuted and barred from working on or bidding for government contracts for a duration of not more than two years determined by the gravity of the fault committed (Article 191 of the 2018 Procurement Code [1]). Other sanctions include penal sanctions (according to article 184 and 185 of the penal code), confiscation of profit made from the contract, and licence withdrawn (article 191 of the Code [1]. The sanctions noted here do not apply to defence and security procurement, which falls under Special Contracts under the Code. Procurement officials have no oversight or authority to impose such sanctions on defence and security-related procurement violations as defence procurement is exempt from all oversight and is conducted in secret (Articles 4 and 71) [1]. In addition, there is no company involved in defence procurement that is known to have been banned like the ones on the ARMP list [2].

Because there is no legislation in place addressing collusion in procurement, this indicator has been marked Not Applicable.

There is a complete failure to investigate or prosecute corruption in defence and security procurement. Articles 4 and 71 of the Procurement Code (2018), clearly states that defence and security-related procurement are “Special Contracts and are not subject to tenders or OTC markets and the consideration of the public procurement commission” [1].

Procurement officials have no oversight or authority to impose sanctions on defence and security-related procurement violations as defence procurement is exempt from all oversight and is conducted in secret (Articles 4 and 71) [1]. There is no evidence that training is provided to procurement officials with regards to collusion.

There is legislation in place to discourage and punish collusion between bidders on contracts. The Competition Act (Section 45) stipulates that any (every) person guilty of conspiring, agreeing to, or arranging to fix prices, or otherwise unfairly manipulating market conditions is “liable on conviction to imprisonment for a term not exceeding 14 years or to a fine not exceeding $25 million, or to both.” [1] Collusion between bidders and officials is specified under Section 121(1) of the Criminal Code, “Frauds on the Government”, which stipulates that “Every one commits an offence who (c) being an official or employee of the government, directly or indirectly demands, accepts or offers or agrees to accept from a person who has dealings with the government a commission, reward, advantage or benefit of any kind for themselves or another person, unless they have the consent in writing of the head of the branch of government that employs them or of which they are an official”. [2] Courses are offered by the Canada School of Public Services in procurement-related areas, but an evaluation of the Certification Program for Procurement and Material Management Communities, which was conducted by the TBS Internal Audit and Evaluation Bureau in 2018, revealed training-related issues. [3]

The Competition Act (Section 45) stipulates that any person guilty of conspiring to, agreeing to, or arranging to fix prices, or otherwise unfairly manipulating market conditions is “liable on conviction to imprisonment for a term not exceeding 14 years or to a fine not exceeding $25 million, or to both.” [1] Furthermore, should a complaint be received by the Canadian International Trade Tribunal from an interested party in a procurement process, a stay of the procurement process may be issued, and there is the potential for a wider ranging inquiry should the complaint be deemed valid by the tribunal. [2]

If a contracting authority suspects collusion or bid rigging, it shall notify Industry Canada (now ISED) for appropriate measures/punishments. [1] In practice, while other punishments are legally applicable, most often this would affect their ability to participate in future procurement competititons. Complaints are more often relayed from other bidders/competitiors of unfair practices through the procurement ombudsman. [2] [3] In a trial, the Vice Chief of Defence Staff (VCDS) was found not guilty of breach of trust, after a leak about contracts relating to competing shipyards. As he was suspended as VCDS and investigated by the RCMP, the process showed the seriousness of the RCMP and CAF/DND to investigate influence on government decision-making in procurement, even at the high levels of the CAF. [4]

As collusion and bid rigging are addressed and enforced through Section 47 of the Competition Act, [1] Public Works and Government Services Canada mandated in its ‘Standard Acquisition Clauses and Conditions (SACC) Manual’ that, “the contracting officer must notify Legal Services and his or her immediate director whenever there is an indication of possible bid-rigging activities, collusion or fraud. When it is considered necessary, Legal Services will assist in subsequent discussions with Competition Bureau Canada.” [2] As such, procurement officials are trained to work with Government legal services to address instances of collusion. [2] However it is unclear whether such officials are trained to identify collusion patterns or malpractice on a regular basis.

The country has a general legal framework that penalises collusion between firms that may affect free competition, including the results of bids made by public companies, private providers of public services, or public bodies [1]. This legislation has been partially a response to recent corruption scandals. In the public sector, the Department of Purchase and Public Procurement is in charge of promoting maximum competition in contracting and acquisition [2]. However, investigations of cases of malfeasance in procurement and acquisitions in the armed forces have revealed a lack of specific regulation to punish collusion in the defence and security sector [3]. According to the statute of the law on acquisitions and disposals of tangible and intangible assets and services in the armed forces, committees of evaluation of acquisitions in the defence sector “shall not have conflicts of interest with the bidders, in accordance with the regulations in force at the time of the evaluation” [4]. However, the definition and causes of conflicts of interests are not fully specified. The regulation of the Records of Special Providers for the Armed Forces indicates causes of disability for providers, including the direct relationships with members of military institutions, but it does not address collusion [5].

There is legislation that excludes companies and individuals who have been convicted of bribery and corruption for hiring and bidding with state agencies and the armed forces, but procurement officials have limited information and authority beyond legal sanctions. Suppliers who wish to participate in tenders must register with the registries of special providers for the armed forces. The regulation of these registries (there are several, one for each branch of the armed forces) indicates the causes of the providers’ disability [1]. Specifically, registries exclude suppliers who have been sanctioned for embezzlement of public funds, fraud, and bribery (Title V. paragraphs 5, 6, 9). In November 2018, a new regulation specified that employees who request or accept economic benefits in favour of contracting with a certain entity will be sanctioned, with the penalty of minor seclusion and a fine equal to double the perceived benefit [2, 3]. It also established an equivalent sanction for those who offer an employee a benefit/bribe to favour hiring a company. Individuals involved in these crimes will also be disqualified from holding positions in companies that have contracts with Chile or participate in public tenders.

Academic literature, international reports, and investigative journalism provide a mixed picture on the degree of enforcement of legislation to discourage and punish collusion in the defence and security sector. On one hand, formal analyses of judicial independence in Latin America have identified only a few constitutional provisions to guarantee autonomy and independence in the Chilean judiciary, being the country among the lowest in the region [1]. On the other, according to the World Economic Forum’s Global Competitiveness Report (2018), the Chilean judiciary ranks among the best (with Costa Rica and behind Uruguay) in terms of independence from the influences of government, individuals, and companies in the region [2]. Concerning the enforcement of legislation to punish collusion, recent cases of embezzlement in the military and defence sector demonstrate that prosecutors have been able to investigate and even to prosecute high-ranking members of military commanders, including two former commanders in chief of the army, a former vice commander, and a former treasurer of the army general staff, are among the 34 military officers processed in 23 investigations. However, investigations carried out by journalists report several attempts made by members of military and defence institutions to delay judicial investigations, deny information to military courts, and more generally create obstacles for investigation and prosecution [3, 4, 5, 6, 7, 8].

An online search – and through interviews – revealed no information on whether training is provided for procurement officials with regards to collusion in procurement processes. As such, this indicator has been marked ‘Not Enough Information’.

According to Αrticle 57 of the 2010 Weapons and Equipment Quality Management Regulations (武器装备质量管理条例), collusion is prohibited both between officials and production units (bidders) and among them. Article 33 of the Regulations on the Competitive Procurement of Equipment (竞争性装备采购管理规定) prohibits collusion between military officials and companies.

Τhe legislation mentioned above stipulates two types of punishment depending on the severity of the crime: a) punishments according to the PRC Regulations on Certification and Accreditation (中华人民共和国认证认可条例), which include excluding companies and revoking licenses (Articles 70-74), or b) criminal investigation for corruption according to “Chapter VIII: Corruption and Bribery Crimes” PRC criminal law (中华人民共和国刑法). [1,2,3,4]

There is very limited public information on cases of collusion between bidders, as well as bidders and officials. Pei Minxin reports that collusive corruption in the Army has reached epidemic dimensions, [1] especially in PLA construction, logistics, real estate, health care, finance and personnel management. The recent reoganisation of the CMC departments [2] and the dismantlement of the formerly powerful General Logistics Department, as well as the arrest of more that 100 senior military commanders on corruption charges shows the government’s determination to fight corruption. [3] Given the limited information available on this issue, this indicator is not scored and is marked ‘Not Enough Information’.

Τhere is no publicly available information on the type of training followed by procurement officials.

Colombia has a General Regime for Competition Protection composed of the following regulations: Law 155 of 1959, [1] Decree 2153 of 1992, [2] Law 1340 of 2009, [3] Decree 4886 of 2011, [4] and the Anti-Corruption Statute Law 1474 of 2011. [5] All these regulations apply to the defence sector and generate administrative, criminal, and disciplinary measures. [6] According to Galvis, [7] competition protection regulations penalise only agreements between private companies in bidding processes, not those between public officials and private companies. The Superintendency of Industry and Trade (SIC) is responsible for monitoring and protecting free economic competition and consumer rights, including agreements between public officials and private companies. [8] Thus, it can be said that regulations are focused on generating exclusive tools to combat agreements between competitors or bidders.

Colombia has a General Regime of Competition Protection composed of the following regulations: Law 155 of 1959, in which Article 1 prohibits agreements or conventions that directly or indirectly aim to limit the production, supply, distribution, or consumption of domestic or foreign raw materials, products, goods or services, and in general, all kinds of practices, procedures, or systems aimed at limiting free competition and maintaining or determining inequitable prices. [1] Decree 2153 of 1992 [2] and Law 1340 of 2009 [3] define fines for up to 100,000 current monthly minimum wages or, if it turns out to be higher, up to 150% of the profit derived from the offender’s conduct. The Law also defines a number of criteria for the graduation of the fine. Decree 4886 of 2011 regulates the role of the Superintendency of Industry and Commerce (SIC). [4] While the Anti-Corruption Statute, Law 1474 of 2011 in Article 27, criminally punishes collusion or restrictive practices of competition, resulting in imprisonment from six to 12 years, a fine of 200 to 1,000 monthly legal minimum wages, and a restriction on contracting with state entities for eight years. [5] The SIC page publishes sanction documents on bidders in the sector, which show that sanctions have been largely focused on fines, which was confirmed by the Superintendent of Industry and Trade who reported that “in recent years the sanctioning capacity of the Superintendency of Industry and Commerce increased up to 50 times more. [6, 7] In 2009 it imposed sanctions of 8 billion pesos and in 2017 the figure reached 320 billion, many of them for violating free competition, posters for diapers, sugar, cement, toilet paper, private security, among others were discovered.” [8] Although there is legislation that considers collusion as an offence and involves fines, imprisonment, and disqualification, it is clear that much of the proceedings are focused on the generation of fines, and no criminal prosecution or disqualification by the Public Prosecutor’s Office is evident in the prosecutions carried out in the defence sector.

The application of the rules on collusion is carried out by two entities, the SIC which imposes fines on bidders, and the Attorney General’s Office, which conducts criminal proceedings and disqualification proceedings. [1, 2] During the investigation processes of complaints concerning the agreement between competitors, the SIC has implemented the leniency program referred to in Law 1340 of 2009, which is characterized by promoting denunciation or benefit for collaboration, in exchange for benefits in the sanctioning process, whether criminal or fiscal. [2] It is important that both the SIC and the Public Prosecutor’s Office independently and autonomously carry out processes of surveillance, sanctions, and control. [3, 4] In recent years, the Attorney General’s Office has had high favourability ratings related to its role in ending impunity and corruption. In 2016 it had 57% favourability for management, and 56% and 62% in 2017 and 2018, respectively. [5, 6, 7] In 2014, the OECD recommended that the process of implementing anti-collusion laws should articulate the process between the National Agency for Government Procurement and Colombia Efficient Purchase with the SIC, so that: “The two organizations must engage together to: study issues with competitiveness implications; lead the process to implement changes that favor competition in government procurement procedures; and organize training and educational activities.” [1] It also recommended that Colombia Compra Eficiente should chair a council of officials responsible for government procurement alongside the SIC, which would act as a forum for identifying and resolving issues related to competition and efficiency. [1]

In terms of training to identify patterns of collusion and report on potential bad practices, in interviews with the Ministry of Defence and with the National Army, they report that DANTE in its sectoral strategic plan (PES) has been developing training processes to prevent conduct related to collusion. Approximately 3,000 to 5,000 military and civilian personnel have received this training on reducing corruption risks, including in recruitment processes. [1] The SIC also conducts training processes, and this material is available on its website. However, it is unclear the frequency of the training exercises.

There are provisions against collusion in the 2009 Code of Public Procurement and the fact that they only apply to the bidders (soumissionnaires). These provisions do not refer to the training. The 2009 Code of Public Procurement (Décret n° 2009-259, Portant Code des marchés publics), Chapter 2 (Sanction des violations commises par les candidats soumissionnaires ou titulaires), Article 186 (Pratiques frauduleuses), Sections 2 and 7 make a direct reference to instances of collusion in which bidders can be sanctioned for fraudulent practices, including collusion among bidders to set artificial prices for a contract (1).

The Code of Public Procurement states:

“Art. 186 – Fraudulent practices
Without prejudice to the penal sanctions provided for by the laws and regulations in force, the contractor, supplier or service provider having:
2. practices of collusion between bidders in order to establish the prices of offers at artificial and non-competitive levels and to deprive the contracting authority of the benefits of free and open competition;
7. ban on future public contracts, either definitively or for a fixed period, depending on the seriousness of the fault committed by the contractor, the supplier or the service provider, including, in the event of proven collusion, any company that owns the majority of the capital of the company concerned, or of which the accused company owns the majority of the capital.

Article 187 (Actes de Corruption), Section 2, also bans companies that have been proven guilty of collusion to participate in future public tenders.

Art. 187 – Corrupt practices
2. the exclusion from public contracts, either indefinitely or for a fixed period depending on the seriousness of the fault committed by the guilty party, including, in the event of proven collusion, any company that owns a majority of the capital of the company concerned, or of which the accused company owns the majority of the capital” (1).

There is no evidence of training on matters of collusion for public procurement officials.

The provisions in Articles 185-187 in the 2009 Code of Public Procurement exclude companies found guilty of corruption (fraudulent practices) from applying for future public tenders. But the penalties that public procurement officials can impose on non-compliant companies are otherwise vague.

The 2009 Code of Public Procurement (Décret n° 2009-259, Portant Code des marchés publics), Chapter 2 (Sanction des violations commises par les candidats soumissionnaires ou titulaires), Article 185 (Inexactitudes délibérées), Article 186 (Pratiques frauduleuses) and Article 187 (Actes de Corruption) stipulate that procurement officials have the authority to exclude companies where there is evidence of bribery and corruption. However, the available sanctions in the 2009 Code are restricted to banning companies from future public tenders (1).

The 2009 Code of Public Procurement states:

“Art. 185 – Deliberate inaccuracies
Deliberate inaccuracies in the certificates or justifications contained in an offer entail the elimination of the bidder from the competition and its temporary or definitive exclusion from the participation in public contracts, as well as the cancellation of the award decision. Where such inaccuracies are found, the contracting authority may, without prior notice and without expense and risk to the holder, apply additional penalties: (1)
• the cancellation of the award decision;
• the termination of the contract;
• the establishment of a board.

Art. 186 – Fraudulent practices
Without prejudice to the penalties provided by the laws and regulations in force, the contractor, the supplier or the service provider having:
4. outsourced beyond the ceiling set in article 53.3 above, incurs the following penalties;
5. establishment of a management board, followed, where applicable, by the termination of the contract at the expense and risk of the holder;
6 confiscation of the deposits paid, as compensation for the loss suffered by the contracting authority;
7. exclusion from public contracts, either definitively or for a fixed period, depending on the severity of the violation committed by the contractor, supplier or service provider including, in the event of proven collusion, any company which owns the majority of the capital of the company concerned, or of which the accused company possesses the majority of the capital.

Art.187 – Corrupt Acts
Without prejudice to the criminal penalties incurred, any attempt by a tenderer to influence the evaluation of the tender or the award decisions, including the offering or gifts, or any other advantage, entails:
1. the cancellation of the offer and the confiscation of the corresponding guarantee, if necessary, by the seizure of the amount recorded; this sanction being considered as automatically registered as a penalty clause in any public contract;
2. the exclusion from public contracts, either indefinitely or for a fixed period depending on the seriousness of the fault committed by the guilty company, including, in the event of proven collusion, any undertaking that owns a majority of the capital of the company concerned, or of which the accused company owns the majority of the capital.” (1).

There are prosecuted cases and rescinded contracts through formal processes. However, none of the cases are linked to the Ministry of Defense. It is difficult to determine whether there has been clear interference (undue influence) in the decision-making process of the ANRMP. There is evidence that cases are investigated by the ANRMP and its agencies. A tab on the ANRMP website titled “Liste Rouge” has uploaded a range of cases in pdf format from 2016-2018 detailing the reasons for the cancellation of public contracts, some of them based on Articles 185-187 of the 2009 Code of Public Procurement: deliberate inaccuracies, fraudulent practices and corrupt acts (1). For example, on 29 June 2018, the ANRMP decided to rescind a public contract with a utilities company (CCCI) that was found to have included deliberate inaccuracies, as per Article 185 of the 2009 Code of Public Procurement, in the context of a public tender (No. F006-PREMU/2017) to improve the water supply in an urban setting (2). However, none of these cases involved defence institutions or are linked to military procurement.

There are provisions against collusion in the 2009 Code of Public Procurement and the fact that they only apply to the bidders (soumissionnaires). These provisions do not refer to the training, and there is no evidence that training on collusion is provided to procurement officials.

Collusion is strictly outlawed in the Danish Competition Law (“Konkurrenceloven”) [1]. This also includes collusion within the defence sector. The Competition law refers to collusion between “companies etc.” (“virksomheder m.v.”), while the Law on public tenders de facto outlaws collusion between an official and a bidder [2].

The EU directive 2014/24/EU and the Law on public tenders (“Ubdudsloven”) states that the bidder should be banned if he or she is convicted or fined for criminal organisational activities, has commited bribery, fraud, terror or terror-related activities, money laundering, financing of terrorism, taken part in human trafficking, or has an unpaid debt of more than 100.000 DKK to the public auhtorities. Further, the bidder is banned if there is a conflict of interest or distortion of competition, or if the bidder has given erroneous information [1, 2]. As such, sanctions within the Law on public tenders include debarment from current and future tenders for up to two years. Offences of the Competition law can result in prosecution, fines (size unknown) and imprisonment [3].

This indicator has been marked Not Applicable, as research did not idenitfy any recent cases of collusion [1].

Research show no indications that procurement officials receive training in identifying and reporting collusion patterns [1, 2].

Law no. 182 of 2018 addresses collusion and the more general themes of “corruption” and “manipulation” in winning contracts (Article 38) as well as conflict of interest between officials and bidders (Article 26) (1). General conflict of interest is also covered by Law no. 106 of 2013 concerning the prevention of conflict of interest for state officials (2). None of these laws mentions providing procurement officials training that addresses collusion. The risk of collusion is also much higher in the defence sector due to the many exemptions granted to the MoD and the MMP (see 59A) (3), (4).

Generally, procurement officers have no authority to bar any company or contractor, that power lies in the hand of senior officers and management within the MoD. However there is some limited ability to bar companies, as illustrated by Article 6 of the Tenders Law Executive Regulations, each procurement department should keep a register of all the companies that are debarred from tenders (1). The government’s e-tenders portal publishes a list of the debarred companies (2). The power to debar certain companies lies with the General Authority for Government Services (GAGS), which is a governmental body in charge of monitoring public procurements. The GAGS debarring happens based on local decisions by government entities. However, the reasons for debarring are vague, and the decisions are usually not reasoned.

As much as judicial independence is possible in Egypt, the State Council is known to be one of the relatively independent entities. All decision to debar companies were issued by the State Council (several debarring decision are listed in the examples section), which is evidence that cases are investigated through a relatively effective formal process with limited third party interference. However, it is important to note that this relative independence has been under attack since the State Council issued some key rulings against the government, most prominently the ruling to challenge Egypt’s decision to transfer two Red Sea islands Tiran and Sanafir to Saudi Arabia, which led to a legal crackdown on the State Council and some of its independent-minded judges such as Yahia al-Dakroury, who was also the judge that issued the Tiran and Sanafir ruling (1). In recent years, however, our interviews have noted that the State Council’s influence on the military is diminishing (2), (3), (4), (5).

There are no training programs that allow procurement officers or financial officers to spot the collision or corruption risks within the process of procurement (1), (2).

The Defence Investment Centre was created to avoid collusion between officials and bidders. [1] The Centre offers procurement management services and reports to the Ministry of Defence and performs its work according to Estonian legislation. [2] The Public Procurement Act forbids conflicts of interest, which are defined by law as a situation where the contracting authority or the contracting entity’s employee, official, management board member or another competent representative involved in the preparation or carrying out of public procurement or who may otherwise influence the outcome of the public procurement has, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence. [3]

The Estonian Competition Authority carries out consultations in order to prevent breaches. [4]

In 2017, based on the European Union’s directives, a new Public Procurement Act came into force that eased the procedures to eliminate dishonest companies from public procurement. [1] In accordance with the new law, a tenderer or a candidate who has been in breach of a prior public contract in such a manner that the breach has resulted in withdrawal from or termination of the contract, a reduction of the price, compensation for damage or payment of a contractual penalty, will not be awarded a public contract. [2] A tenderer or a candidate can also be eliminated on the basis of violating the duty of integrity, corrupt practice or fraud. However, if the tenderer can prove that there have been measures taken to regain trustworthiness, there may be exceptions awarded. Lastly, a corruptive act can result in prosecution. [3]

The administrative supervision of public procurement is exercised by the Ministry of Finance. [1] The Ministry of Finance’s activities are derived from the understanding that it is more important to educate and share knowledge rather than punish those who have caused breaches. [2] The Ministry of Finance starts the supervisory proceedings of its own initiative and based on the annual inspection schedule. The inspection reports are made public in the E-Procurement Registry. [3] A Review Committee under the Ministry of Finance is appointed by the government. The Committee has the right to terminate the procurement. [4] The mechanisms are independent and formal, and there is no evidence of cases being investigated and/or prosecuted under somebody’s undue influence. There is evidence of cases being investigated and precepts issued. [5]

Training on procurement procedures is held by the Ministry of Finance for officials as well as for applicants. However, it was recently reported that most of the breaches happen due to lack of information by the contracting authorities. [1]

Competition regulation at both the EU level and nationally forbid collusion [1]. Competition Act, chapter 2, section 5 states: Forbidden limitations to competition between traders. Such agreements between traders, decisions of consortiums and uniform procedures of traders that aim to significantly restrict, prevent or distort competition, or from which it follows that competition is prevented, restricted or distorted, are prohibited.

In particular, prohibition concerns such agreements, decisions and procedures that directly or indirectly strengthen purchase prices or sales prices or other terms of trade; that control or limit production, markets, technical development or investment; that divide markets or sources of supply; or according to which different terms are applied to the similar performances of different trade partners so that trade partners are positioned disadvantageously; or according to which a condition for a deal is that the contracting party accepts additional performances that are unconnected to the object of the agreement. [2]

Furthermore, the Administrative Procedures Act, which aim is to implement and advance good governance and due process in administrative matters as well as to improve the quality of administrative services and effectiveness, provides statutes, for example, on incapacity (Chpt 5, Sections 27-30). [3]
Chpt 27: An official shall not participate or be present when a matter in which he or she is disqualified is being dealt with in administration.

Civil servants’ incapacity regulation is also applicable to a member of a multimember element, another person participating in the handling of the matter, and an inspector inspecting the matter. Chpt 28 states: An official is disqualified when him/her/ a person close to him or her is a party, (2) him or her or a person close to him or her assists or represents a party or a person / another body that is likely to receive a particular benefit or a particular detriment in the matter, (3) he or she or a person close to him or her is likely to receive a particular benefit or a particular detriment in the matter, (4) he or she is in an employment relationship to or commissioned by a party or to a person / another body that is likely to receive a particular benefit or a particular detriment in the matter, (5) he or she or a person close to him or her is a member of board, a member of executive council or a member of a similar body, or a CEO or in a similar position in such an association, foundation, state enterprise or institution that is a party or is likely to receive a particular benefit or a particular detriment in the matter, (6) he or she or a person close to him or her is a member of a management board or a member of a similar body of an agency or an institute and the matter relates to the steering or monitoring of this agency or institute, or (7) trust towards him or her for another reason is compromised.

Chpt 29 states: An incapacity question is solved by the official in question or in case of a member of a multimember element or a presenting official, the element. Chpt 30: A disqualified official must to substituted by a qualified official without a delay. [4] However, there is no explicit prohibition of collusion between bidders and officials.

The Act on Public Defence and Security Procurement regulates on the conditions under which a tenderer may or must be excluded from the process [1]. Chpt 8, Section 46: a candidate or a tendered must be excluded from the bid, the adequacy of candidates and tenderers otherwise evaluated, and the tenderers compared with one another according to the following sections (47-56) before evaluating the offers. Chpt 8, Section 47 states: A contracting unit must exclude a candidate or a tenderer from the bid, if it is aware that the candidate or tenderer or a person in its management/a representative/a decision maker/a supervisor has been convicted for any of the following offences (marking in the national crime register) (specified in the Criminal Code of Finland [2]): participation in the activities of an organised crime organization; bribery; tax evasion, subsidy fraud, misuse of a subsidy; terrorism motivated crime or preparing for such a crime, running a terrorist organization, facilitation of the operations of a terrorist group, giving training for a terrorism motivated crime / recruitment for it / incitement for it / assising in it / attepting any of the aforementioned terrorism related crimes; money laundering or funding of terrorism; extortion type of occupational discrimination. The contracting unit must also exclude a candidate or a tenderer who in another country has been convicted for crimes similar to the aforementioned; in EU member states the similar crimes are stated in EU law. An exemption to this exclusion obligation may be done for a compelling reason related to the common interest or because the convicted person no longer has a position with responsibility in the company that has done the offer.

Chpt 8, Section 48 states: A contracting unit may exclude a candidate or a tenderer from the bid because of: bankcruptcy, the dismantlement or halting of its business operations or because its debts have been settled in a law enabled process; because its bankcruptcy or dismantlement or other arrangement is pending; because it has been convicted for a wrongful act in carrying out its business e.g. breaking the law on export control; because it has committed a grave mistake in its business operations such as breaking the obligations related to information security or security of supply or a similar violation of contract terms earlier that can be proven by the contracting unit; because its trustworthiness and accountability has been evaluated as insufficient to the extent that it cannot be concluded that this would not be a risk to national security; because it has failed its obligations to pay taxes or social security payments; or because it has given significantly wrong or misleading information when providing information on the aforementioned topics to the contracting unit or it has neglected the duty to provide such information. Further sections of the act regulate the process and the sources of information of carrying out an evaluation of the adequacy of the candidate or the tenderer, information security requirements that the candidates and tenderers must fulfil, and the conditions for candidate and/or tenderer grouping. [1]

The Competition Act, chapter 3, specifies the procedures and sanctions (cash penalty) concerning the forbidden restrictions on competition [3]. The Criminal Code, again, specifies crimes and sanctions in general e.g. chapter 30, sections 7-8 about bribery. Chpt 30, section 7 on giving of bribe in business: A person who promises, offers or gives an unlawful benefit (bribe) to (1) a person in the service of a business, (2) a member of the administrative board or board of directors, the managing director, auditor or receiver of a corporation or of a foundation engaged in business, (3) a person carrying out a duty on behalf of a business, or (4) a person serving as an arbitrator and considering a dispute between businesses, between two other parties, or between a business and another party intended for the recipient or another, in order to have the bribed person, in his or her function or duties, favour the briber or another person, or to reward the bribed person for such favouring, shall be sentenced, unless the act is punishable on the basis of Chapter 16, section 13 or 14, for giving of bribes in business to a fine or to imprisonment for at most two years.

Chpt 30, Section 7a covers aggravated giving of bribes in business: if in the giving of bribes in business (1) the gift or benefit is intended to make the person in question serve in his or her function in a manner that results in considerable benefit to the briber or to another person, or in considerable loss or detriment to another person, (2) the gift or benefit is of considerable value, and the giving of a bribe in business is aggravated also when assessed as a whole, the offender shall be sentenced for aggravated giving of bribes in business to imprisonment for at least four months and at most four years.

Chpt 30, section 8 on acceptance of a bribe in business states that the punishment for committing this crime varies between a fine and imprisonment for at most two years; section 8a on aggravated acceptance of a bribe in business states that the punishment for committing this crime varies between imprisonment for at least four months and at most four years. [2]

There is not enough information to score this indicator. No case of collusion was found during the research process, for the period 2016-2020.

The Finnish Competition and Consumer Authority is the first supervisory instance (and an independent instance). The Act on the Finnish Competition and Consumer Authority (661/2012), Chapter 1, Section 1: The Finnish Competition and Consumer Authority has been established to implement competition and consumer policy, ensure the functionality of markets, enforce the Competition Act (948/2011) [2] and the implementation of EU competition regulations, and secure the financial and legal status of consumers.

Chapter 1, Section 2: It prepares proposals and initiatives to promote competition, eliminate regulations and provisions that restrict competition, and improve consumer policy and consumer protection; handles the responsibilities mandated to it by the Competition Act and supervises compliance with decisions made under the Competition Act; promotes and implements consumer advocacy and education; conducts research, studies and comparisons within its area of responsibility; handles other duties decreed or provided for it. [1]

The Competition Act, chapter 4a, covers competition in matters between public and private economic activity; chapter 5, section 39, covers information exchange between the Competiton and Consumer Authority and other authorities. According to it, the Competition and Consumer Authority may on its own initiative, and without the concealment requirements prohibiting it, forward information or document obtained and if necessary to e.g. pre-trial investigatory authorities in order to prevent, reveal, investigate and/or prosecute crime and in order to collect evidence and prosecutor in order for it to carry out its tasks. [2]

In competition issues, the Market Court is generally the instance where the trial takes place (initiated by the Competition and Consumer Authority or another plaintiff) [2,3]. However, as the Competiton and Consumer Authority can forward the matter to pre-trial investigatory authorities and/or to the prosecutor, legislation covering their work becomes relevant (e.g. [4,5,6]). There is no evidence of third-party involvement in the procedures.

There is no publicly available information regarding training for procurement officials, as such this indicator is not scored and is marked ‘Not Enough Information’.

Article 48 of Order n°2015-899 of July 23, 2015 defines collusion as a situation where “the persons in respect of whom the buyer has sufficiently probative elements or constituting a bundle of serious and concordant indices to infer that they have entered into an agreement with other economic operators in order to distort competition”. [1] Bidders who are in this situation are excluded from public procurement.
As for officials involved in choosing bidders, they are prohibited from expressing favouritism or collusion by the “Sapin 2” law 2016. [2] Public agents, French or foreign, corrupted or corrupting, can face up to 10 years in prison and up to one million Euros in fines (or double the amount gained in the transaction). The law considers collusion as part of the broad “corruption crimes” spectrum.
Order n°2015-899 of July 23, 2015 and the “Sapin 2” law encompass defence and security contracts. There is no specific regulation for defence and security contracts.
In the ICS case, [3] the alleged collusion scheme was reported by an anonymous source to the judge, not by any procurement official.

Since 2013, regulation concerning fraud in public procurement has been enhanced. The legislator decided in 2013 (with the law on the fight against tax evasion and serious economic and financial crime [1]) to punish the main offenses more severely, namely corruption (article 432-11 of the Penal Code), favouritism (article 432-14 of the Penal Code) and the illegal taking of interests (article 432-12 of the Penal Code). [2] There are also provisions in the public procurement code (“Code de la comande publique”) that provide for the exclusion of companies on the basis of corruption, fraud, bribery or influence. [3]

More recently, the “Sapin 2” law added new regulations: [4]
– Public agents, French or foreign, corrupt or corrupting, can face up to 10 years in prison and up to one million Euros in fines (or double the amount gained in the transaction).
– Creation of a new litigation process, the “judicial convention of private interest”: in cases of corruption, influence-peddling, money laundering, tax fraud committed by a legal person (a company), a judge sets a sanction and a timeline for financial compensation.
– As a legal person, a company has no criminal record and if proof is provided of corruption practices in the past, the sanction is limited to debarment, but the company can apply again to other tender boards or procurements.
– There has to be a conviction by a criminal judge to exclude a company from a tender board or public procurement.
– Senior company officials can, however, still be convicted as physical persons.

For instance, ICS’ contract with the Ministry of Defence for aerial transportation was not renewed after the National Financial Prosecutor (PNF) launched an investigation into various types of corruption crimes (collusion, active corruption of public agents, tax evasion, revolving door benefits for corrupt agents, etc). But until the subcontractor is convicted by a judge, it is still eligible to apply for public procurements. In fact, since the beginning of the investigation, ICS has been awarded two other contracts with the Ministry of Defence. [5]

The recent ICS case shows that it is up to judges to carry out independent investigations and prosecutions through formal processes, as the Ministry itself, the DGA, and the military institution will not bring unlawful cases to light. In the case of ICS, undue influence by corrupt high commanding officers in charge of tender boards and procurement was rather effective at first in derailing the launch of an investigation. It is only when the judge at the PNF received an anonymous letter with incriminating evidence that a real investigation started. [1] So, although sanctions do exist, the ICS case shows that not only are defence procurements very opaque, but corruption behaviours are not reported and sanctioned by the military institution and Ministry. It is up to judges to bring such cases into the spotlight.

There is evidence that procurement officials within the Ministry of the Armed Forces receive training on ethics – including prevention of bribery and corruption – and on the potentially offences associated with public purchasing. [1] [2] This applies to both military and civilian personnel, and is delivered by the ethics referent (RMDA). However, it is not clear from public sources that specific training is provided to procurement officials to identify collusion patterns and report potential malpractice. [3]

Laws are in place that prohibit collusion within the defence sector, where collusion is defined as between an official and a bidder or between bidders. Procurement officials are trained to identify collusion patterns and report potential malpractice [1]. ‘In Germany, the competition authority has three public procurement chambers which act as a public procurement review body (i.e. as an appeal court against decisions of public procurement agencies). The guiding principles of the Bundeskartellamt’s public procurement tribunals are competition, transparency, non-discrimination and fair tendering procedures. In Germany, public contracts principally have to be awarded under competitive conditions through a public tender in a transparent and non-discriminatory way. In principle the contract is awarded to the bidder submitting the economically most advantageous offer. The three public procurement tribunals set up at the Bundeskartellamt, review, upon request, whether public contracting entities have met their obligations in the award procedure. The tribunals are entitled to take suitable measures to remedy a violation of rights and to prevent any impairment of the interests affected’ [2].

Section 298 of the Criminal Code (Penal Code) stipulates that those who, in connection with tenders for goods and services, make anti-competitive agreements with the aim of inducing the advertiser to accept a particular offer shall be punished by a penalty of up to five years’ imprisonment [3].

Section 124(1) No. 4 of the GWB also entitles the contracting authority to exclude companies from participating in the award procedure if there is sufficient evidence that the company has made agreements with other companies that restrict, distort or prevent competition. The Bundeskartellamt can make agreements illegal in accordance with track and punish as outlined in Part 3 GWB (‘Verfahren’) [4,5].

There is clear legislation and implementing guidelines empowering procurement officials to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery & corruption-related offences. An offence can result in prosecution, debarment from current and future competitions or other sanctions, including heavy fines or imprisonment [1,2] The 2004 ‘Federal Government Directive Concerning the Prevention of Corruption in the Federal Administration’ introduced several preventive measures in public procurement that apply to federal bodies [3]. These include the separation of the three phases of the procurement process, i.e. the preparation and planning phase, the actual purchasing and the billing and settlement phase. The ‘four-eyes principle’ and the regular rotation of personnel were also implemented. If the contracting authority opts for any procedure other than the open procedure, this decision must be documented. In addition, some federal states keep track of bidders that have been excluded from procurement procedures. While public procurement remains an area of vulnerability according to the 2013 Report on the Prevention of Corruption in the Federal Administration, no actual cases of procurement-related corruption were reported in that year. A corruption risk monitoring tool is used to assess the corruption risks of a given activity, especially procurement. If an activity qualifies as vulnerable, risk mitigation measures are adopted, e.g. background checks of newly hired employees.

Additionally, the Ministry of the Interior regularly performs checks of ongoing tender procedures both at random and based on tip-offs from whistleblowers. In order to maximise the effectiveness of oversight, the Ministry is empowered to directly access procurement records without having to notify, and indeed without being detected by, the contracting authority [4]. Furthermore, according to the ‘Federal Government Directive Concerning the Prevention of Corruption in the Federal Administration’ of 30 July 2004 and the relevant implementation regulations issued for the area of responsibility of the Federal Ministry of Defence, each agency, depending on its task and size, must designate a point of contact that is in charge of issues of corruption prevention [5,6]. The BAAINBw has designated its point of contact, who can be reached via email forms or by telephone [7].

Cases are investigated or prosecuted through formal processes and without third-party interference (e.g. undue political influence) [1,2]. Furthermore, Germany will explore the establishment of central databases of companies and managers with final and binding convictions in order to ensure that relevant convictions are made known to contracting authorities. The country will also explore ways of sharing information on corrupt bidders across borders [3].

While procurement officials are trained to identify collusion patterns and report potential malpractice, there are questions over how regular this is. The guidelines for awarding contracts can also be found in the ‘Federal Government Directive Concerning the Prevention of Corruption in the Federal Administration’ (Chapter 11) [1]. Building on this, various measures are taken to prevent potential abuse of office as well as misuse of collusion patterns. A first measure is to train and raise awareness of the relevant officials in the field of procurement in accordance with their theoretical risk of corruption. These training/awareness-raising activities can take place regularly or as required. The Federal Office for Equipment, Information Technology and Use of the Bundeswehr (BAAINBw) (Procurement Office of the Bundeswehr) has also integrated the Bundeskartellamt’s checklist for detecting inadmissible bid rigging into its online information and training concept [2,3].

The Public Procurement Act and related procurement legislation do provide a broad framework (Article 284 of the 1992 Constitution, the PPA Act (2003), the Public Officers (Disqualification and Assets Declaration) Act (1998)), but it is not specific to the defence sector (1), (2).

Ghana has a piece of legislation, the PPA (2003) on procurement that specifically spells out guidelines for procurement-related corruption (1), (2). Companies can be disbarred if they are deemed to have colluded. The PPA (2003) also states that anyone breaching the PPA is liable for a fine and imprisonment of up to 5 years (3).

The PPA’s provision for enforcement does not seem to be used concerning the GAF. There is no public record in recent years, made available by the government themselves, that is easily accessible that lists or describes enforcement measures against military or defence ministry personnel. The GAF has been completely untouched by all the investigations conducted by Ghana’s Economic and Financial Crimes Commission.

Cases are superficially investigated, but defendants are not punished (1), (2), (3).

There is no evidence that training is provided to procurement officials with regards to collusion (1), (2).

Laws are in place that prohibit collusion within the defence sector, where collusion is defined as taking place between an official and a bidder [1, 2]. For instance, Article 9 of Law 3978/2011 states that “the economic operators referred to in paragraph 1 shall be prohibited from employing military or civilian personnel of the Ministry of National Defence for a period of at least three years after their retirement or otherwise leaving” [3]. This also includes the possibility of bid rigging, i.e. between bidders (Article 10) [3].

There is clear legislation and implementing guidelines empowering procurement officials to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery and corruption related offences. An offence can result in prosecution, debarment from current and future competitions, or other sanctions, including heavy fines or imprisonment.

Cases are investigated or prosecuted through formal processes, but third-party interference (e.g. undue political influence) is attempted, and sometimes effective at derailing prosecutions [1, 2].

Procurement officials are occasionally trained to identify collusion patterns and report potential malpractice [1, 2].

The country has laws in place that prohibit collusion. It is important to note that these laws apply to the defence sector as well. The most relevant law is the CXLIII/2015 Law on Public Procurement [1] and the Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices [2]. The main body to control collusion is the Competition Authority (GVH) [3]. It is obligatory to involve in the procurement procedure a so-called Responsible Accredited Procurement Consultant; however, it is only mandatory in bigger procurement cases (above 500M Ft property sales for example). The consultants are private, trained professionals.

Procurement officials have limited power to exclude companies, but, they can initiate investigations with the relevant authorities [1]. The two relevant authorities are the Hungarian Competition Authority [1] and the Public Procurement Council [2]. While these bodies have the power to enact the aforementioned policies, due to the limited number of tenders and competitive procurements they rarely use this option.

There are no known cases of collusion, as such this indicator is scored Not Applicable. For important procurements, authorities do not have the tools or the possibility to investigate the decisions of the government. While searching the open tenders and the cases of the Competiton Authority [1] in their public database, no single case in the last decade was found when bidders were investigated. When looking at the Public Procurement Council only two smaller companies were temporarily suspended from participating in public procurements [2].

There is not enough evidence to score this indicator, as no information is available on the frequency of the training.

A legal framework is in place that discourages collusion in the defence sector, primarily the Competition Act, 2002 [1]. The Competition Commission of India (CCI) was established under the Competition Act, 2002, to promote and sustain competition in Indian markets, to prevent effect on competition, to protect the interests of consumers and ensure freedom of trade. The CCI has the authority to impose penalties on entities violating the Act. The CCI’S “Diagnostic Tool – Towards Competitive Tenders” provides guidance on procurement and identifying collusion practices and competition issues; it further encourages procurement officers to be trained [2].

Additionally, in the DPP-2016, under Pre-Contract Integrity Pact, it is stated:

“6.3 The Bidder will not collude with other parties interested in the contract to impair the transparency, fairness and progress of the bidding process, bid evaluation, contracting and implementation of the contract” [3].

The CCI can grant a temporary injunction restraining parties from violating the Competition Act, 2002. Under Section 27 of the Act, the CCI can impose financial penalties. Violations can lead to civil imprisonment under Section 42 [1].

There has been criticism from the Bar Council of India that the CCI is operating without jurisdiction as it is not headed by a former judge [2].

Evidence of enforcement in other sectors exists but there is no evidence of collusion in defence sector bidding and the prosecution of such activities [1][2][3]. As such, this indicator is scored ‘Not Applicable’.

The CCI’S “Diagnostic Tool – Towards Competitive Tenders” provides guidance on procurement and identifying collusion practices and competition issues; it further encourages procurement officers to be trained [1].

There is evidence of the government’s acknowledgement of the need for continuous professional training for officers in defence procurement but the number of trained officials and the frequency of training are not ascertainable. In 2018, the then Minister of State for Defence Dr Subash Bhamre in a written reply to the now late Shri Hariom Singh Rathore in the Lok Sabha stated:

“In addition, officers dealing with defence procurements are encouraged to attend seminars, capsule courses or other similar events conducted by various industry chambers and institutes such as National Institute of Financial Management, Faridabad. All these assist in developing the required knowledge base among the officers for handling issues related to defence procurement.

There are an adequate number of experienced and trained officers to handle defence procurement. However, in view of the position indicated in reply to part (a) and (b) above, training of officers on procurement matter being a continuous process of knowledge upgradation, it is not possible to give exact number of trained officers.” [2]

Article 66 of Minister of Defence Regulation No. 17/2014 stipulates that there is to be no collusion between the bidders or between bidders and Procurement Committee in procurement [1]. The former comprises collusion in tenders that causes one bidder to win and results in unfair competition [2], as well as collusion in the implementation of work, whereby the winner subcontracts the main work to another party. Meanwhile, collusion between bidders and Procurement Committee is less clearly defined, but Article 66 of the regulation stipulates sanctions for the Procurement Committee if fraud is uncovered in the procurement process [1]. At the level of the Procurement Committee (Unit Layanan Pengadaan, ULP), the Head of ULP becomes the supervisor of activities and reports deviations/indications of irregularities in the procurement process. .

Minister of Defence Regulation No. 17/2014 stipulates the requirements of main equipment and weapon systems (alutsista). Providers are required to issue a statement declaring that the company is not being halted and/or that the directors acting for and on behalf of the company are not subject to any criminal sanctions [1]. Providers who are proven to have committed conspiracy/fraud with the Procurement Committee or between Providers are subject to sanctions in the form of administrative sanctions, blacklisting, which results in debarment from any public procurement within a certain period (usually one to two years) [2], civil lawsuits and/or criminal reporting. Those proven to have committed violations/fraud of the Procurement Committee are subject to sanctions in the form of administrative sanctions, compensation claims and/or criminal reporting. These sanctions are in line with Article 78 of the general procurement regulation [2].

Given that they naturally involve civilians and the military, investigations and persecution of cases of fraud/corruption in defence procurement are separated into civil and military procedures. The investigation of military personnel suspected of involvement in fraud is carried out by the Military Police Centre (Pusat Polisi Militer/Puspom TNI), while civil personnel are processed through internal investigations or handed over to the KPK [1,2,3]. In the 2016-2018 period, there were at least four cases of alleged irregularities/corruption in arms procurement. There was the case of the arrest of the Director of PT PAL by the KPK for alleged corruption in ship sales to the Philippines [2,4,5], the suspected irregularities in the procurement procedure for the Presidential Helicopter [6], as well as the alleged bribery in the procurement of the Indonesian Maritime Security Agency satellites, which involved civilian and military personnel. Furthermore, in 2016, the Puspom TNI and the Military Court sentenced someone to life imprisonment for committing corruption in arms procurement between 2010-2014, which resulted in state losses of 12 million US dollars [7]. All cases of fraud investigated were under public scrutiny and ended with the defendant being convicted when found guilty. However, there is still very limited chance of corruption cases in the procurement of defence equipment being investigated, because supervision is only conducted internally, meaning that any cases that arise are generally based on reports of suspicion/evidence of corruption submitted by parties outside the Procurement Committee environment, such as the Commission of Corruption Eradication [1].

Interviewees stated that there are various forms of training and focus group discussions (FGD) to eliminate unfair or inefficient procurement processes. For example, there is whistleblower training, but it is not routine, nor is it mandatory for all procurement personnel. Discussion on procurement risks is usually held by inviting external sources, from the KPK for example, to deliver lectures in the training and exercise program set by MoD [2]. It also takes the form of an FGD at the KPK, in which various procurement structures are discussed. It must be noted that the responsibility to conduct comprehensive supervision of potential corruption in procurement is not only on the procurement unit, but most importantly lies with the Inspectorate General. Inspectorate General personnel are assigned to integrate into the procurement process and conduct a three-stage audit (pre-bidding, during bidding and post-bidding) in accordance to Inspectorate General Regulation No.30/2018 [3].

The Armed Forces Tenders Law addresses collusion, but the provision is not developed. It merely states that the consequences for the tender (i.e. that it will be cancelled) if collusion is detected by the Tender Committee. It only makes reference to tenderers [1]. Collusion is also outlawed in the Islamic Penal Code [2].

There is nothing in the Armed Forces Tender Law [1] or the Islamic Penal Code [2] to indicate that procurement officials have the authority to exclude companies or individuals implicated in bribery or corruption-related offences.

This indicator has been scored Not Applicable. No evidence of investigative or prosecution cases was found [1, 2].

No evidence was found indicating that procurement officials are trained to identify collusion patterns and report potential malpractice [1].

Iraq’s Competition and Monopoly Prevention Law emphasises the importance of regulated procedures and encourages investigations into anti-competitive behaviour (Article 15) (1), but requires contractors to provide evidence of alleged malpractice or corruption to the specialised Iraqi court. Iraq’s flawed regulatory procurement regime, as various analysts shed light on, has furnished an environment many views as vulnerable to collusion. Furthermore, the formation of commissions mandated to combat anti-competitive efforts and deliberate on punishments have not been established under Law No. 14 as was intended (2), (3). The Law, however, fails to specify whether tackling collusion is within their jurisdiction. One interview dating back to 2010 shares important insight on foreign-held perceptions of local Iraqi legislation (4). Adviser to the Investment Authority in Iraq, Abdullah al-Bandar revealed in an interview with Aljazeera Arabic that the GOI hopes that providing access to dispute mechanisms and court-procedures will encourage foreign investors to consider settling complaints internally instead of resorting to international arbitration, which implies that steps towards fostering an environment of trust are being taken by the government.

According to Al Tamimi (1) collusion in bids to tenders is illegal, but a curious loophole to evade responsibility exists; in the form of joint bids. Despite the fact the collusive bidding is deemed a form of bid-rigging under OECD regulations, joint bids are acceptable if their purpose “is not anti-competitive in any way” (1). As noted during an OECD a conference held in Baghdad in 2014, uncertain contract enforcement ranks high among the litany of concerns held by investors (2). There is a significant lack of transparency over the contracting authorities obligations.

There is a complete failure to investigate or prosecute, even in the face of clear evidence, which is seldom available. The catch-all phrase of rooting out corruption is a popular slogan (1), (2) among politicians and yet the responsibility to quash collusive tendering within the realm of defence procurement is not twinned (3), neither as part of a strategy or otherwise (3), (4), with the fight against corruption. Acts of bid-rigging, collusion, forgery (5) among other cartel-like to influence contracting parties practices are not combated beneath newly drafted laws. Anti-corruption legislative framework legislation offers vague definitions but no laws have been tailored with the prosecution of collusive tendering and bidding in mind.

There is no evidence that training is provided to procurement officials on collusion.

There are laws are in place that prohibit collusion within the defence sector, where collusion is defined as between an official and a bidder or between bidders (it’s criminal offense) (1) (2). Furthermore, there is the competition authority (the Anti-Trust Authority / Competition Authority) and the Ministry of Defence is encouraged to pass information to them. Competition Authority and its leadership are responsible for maintaining and promoting competition in the Israeli economy. The Competition Authority was established in 1994 with the passage of the Antitrust Law Amendment and the addition of Article 41 to the law (3). The Antitrust Law provides the ICA Director-General with various powers that make it possible to address anti-competitive behavior in all its forms. With these powers the authority makes efforts to increase and encourage competition where it exists, to create conditions for increased competition where it does not exist, to enforce the provisions of the law when they are violated, and to increase awareness of competition law (4). It serves as an advisor to the government on matters of competition and has the power to prosecute criminal cases and impose fines for certain violations of the Competition Law, including in cases of collusion (4). As a result of the Authority’s expertise in the field of competition, it is involved in governmental activities related to increasing competition in collaboration with various ministries. At the head of the Authority stands the Director-General of the Antitrust Authority, who is appointed in accordance with Article 41A(b) of the law as its director (5).

There is legislation and implementing guidelines empowering procurement officials to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery and corruption related offences (1) (2).(3). Companies have been debarred in the past for such offences (4). The Competition Authority cooperates with the Ministry of Defence regarding disqualification from tenders of companies with collusion convictions. As to sentences following conviction of collusion according to the Economic Competition Law – the maximum punishment by law is a 5 year sentence for every offence (5). When it is appropriate, indictments for collusion also include other criminal offences.

Collusion between bidders and anti-competitive practices are investigated by the investigation department of the Competition Authority. The investigation department has many authorities including the authority to arrest, to search and seize computerized material according to a court order, to intercept communications and install video surveillance according to a court order etc (1). Indictments for offences according to the Economic Competition Law are submitted by the legal department of the Competition Authority. The Competition Authority, including its legal department, operates independently and without political interference.
In general, all the provisions of the Law are criminal offences. However, criminal sanctions are not often imposed and are reserved, mostly, for significant violations of the Law (eg, cartels or bid rigging), although this could change in coming years owing to the increase in the ICA’s influence (2). 2019 saw the highest number of prison sentences and administrative fines ever imposed by the ICA, however a review of recent cases did not find a single case involving a defence supplier (1).

According to an interviewee, procurement officials are trained to identify collusion patterns and report potential malpractice (1). The Committees for the approval and suspension of suppliers also publishes guidelines on identifying collusion between suppliers (2). According to the Government Reviewer, the Competition Authority guides acquisition personnel regarding signs which should raise suspicion of collusion through the “Red Lights” programme, however this could not be independently verified.

There is not a specific legislation regulating collusion between bidders for security and defence contracts, but national legislation applies. In particular, the code for public procurement [1], the penal code [2], and the anti-corruption legislation [3] apply as in any other sector. National legislation regulates the offence of collusion done by both a public servant and a bidder, as well as collusion between bidders.

Collusion can result in sanction or imprisonment, according to the gravity of the committed crime.

Embezzlement is punished with imprisonment from 4 to 10 and a half years (article 314 of the penal code);
Bribery is punished with imprisonment from 6 to 12 years (art. 317 of the penal code). Bribery can also lead to the permanent interdiction from the public function;
Corruption and abuse of office is punished with imprisonment from three to eight years (artt. 318 and 323 of the penal code respectively) [1].

Among the crimes against the public administration perpetrated by subjects outside the public administration there are:
Influence peddling is punished with imprisonment from one to four and a half years [1].
In order to prevent collusion between the parties, decree of the President of the Council of Ministers of 16 January 2013 [1] set the basis for a “White list” of companies providing goods and services to the public administration. The registration to this list is equal to a certification of absence of rejecting reasons to participate in public biddings.

In addition, art. 80 of the Code on public procurement [2] prevents the participation to the same bidding to an entity that is controlled — ex art. 2359 of the civil code [3] — by another bidder participating in the same tender. Should such a case occur, the economic operator is excluded, for a period of three years, from participation in public tenders.

The National Anticorruption Authority has the power to investigate and appeal against acts on public procurement, should the tender procedure be not in line with national legislation. Additionally, in collaboration with the financial and economic police (Guardia di Finanza), the national anticorruption authority has the capacity to start a formal investigation with criminal charges. Investigations and prosecutions also happen effectively in practice [3] [4] and the activities – number of cases, sectors, results of investigations, among others – are annually reported to the Parliament [1]. Impartiality of the proceedings is ensured by the by constitution [2].

The National anticorruption plan and the three-year anti-corruption plan of the Ministry of Defence identify the procurement sector as a role subject to high risk of corruption. As such, the plan provides for specific training [1]. Even though there is no explicit mention of training covering collusion, it is possible to assume that it may be included given that collusion is a major risk. Specific training is carried out each year and is open to a selected group of people identified according to the level of risk they are subject to [2]. Once a case of alleged corruption is detected, the official has the duty to report the event without any delay [3].

Japan has legislation that prohibits collusion between bidders as well as between an official and a bidder. [1] This legislation applies to the defence sector. The Antimonopoly Law bans collusion between companies. [2] The Bid Rigging Act bans collusion between an official and a company through “involvement in bid-rigging” and “any acts that harm the fairness of such bidding.” [3]

According to the “Guidance on Tender and Contract”, companies that have obstructed fair trade are to lose their status as qualified bidders for a period of three years. [1] Furthermore, under the Antimonopoly Law, companies that conduct bid rigging may be subjected to penalties, such as a Cease and Desist Order, payment of a surcharge, criminal punishment and liability for civil enforcement after a Cease and Desist Order has become binding. [2]

Only one case of suspected collusive bidding, for the tenders that ATLA had called for, was found in the mainstream newspapers Asahi Shimbun [1] or Yomiuri Shimbun [2] or the English press releases of the Japan Fair Trade Commission [3] within the timeframe of this research (see Q59A). The JFTC found, in March 2017, that two companies that had bid on a tender for a vinylon defence textile product had colluded. The JFTC issued a Cease and Desist Order to the enterprises and ordered one of them to pay a surcharge. There have been formal processes of investigation and prosecution previously as well. In 2012, the Ministry of Defence received proposals in a competition to select a plan to develop, within a set budget, a UH-X helicopter. That year, it was revealed that one of the competitors had received internal documents from the Ministry that the competitors were not allowed to receive. Following investigation, it was uncovered that GSDF Officials had leaked the information. Two of them were charged by the Tokyo Ward Public Prosecutor, and at a trial they were sentenced to a fine of one million yen for violating the Bid Rigging Act. The Ministry suspended four employees from office and issued various categories of warnings to five others. [4] The public prosecutor suspended indictment of the person in charge of the matter at Kawasaki Heavy Industries, the company that received the leaked information. However, the Ministry imposed a two-month long nomination stop on the company. [5] In a different case in 2008, former Administrative Vice-Minister of Defence Takemasa Moriya was given a sentence of 2 years and 6 months in prison and a fine of 12.5 million yen for accepting bribes and breaking the Diet Testimony Law. He had received bribes from Yamada Yōkō, a trading house that had specialised in defence affairs. [6] The former managing director of Yamada Yōkō was sentenced to prison for paying bribes to the former administrative vice-minister. [7] The Ministry later demanded that the trading house pay a penalty for having submitted inflated invoices to the Ministry. [8] The cited news reports indicate that these cases were handled according to due formality, and do not indicate that there was political interference.

The Administrative Vice-Minister of Defence issued a circular on October 1, 2015, with instructions that all personnel who work with procurement are to receive training in preventing collusive bidding at least once a year. [1] A 24-page manual on preventing collusive bidding was attached to the circular. [2] The manual has charts and clear presentations of how to proceed to prevent collusive bidding. It is divided into sections on the Antimonopoly Act, the Law on Bid Rigging and one section on various measures that will prevent collusive bidding. This last section explains how to notify the JFTC about suspected collusion, compliance measures and how the MOD protects whistleblowers.

Military Supplies Law No. 3 of the year 1995, Military Works Law No. 4 of the year 1995, and the Ministry of Finance’s Tenders Regulations No. 1 of the year 2008, are the main publicly available regulations and policies related to defence procurement. The Tenders Regulations No. 1 of the year 2008, includes clauses that make deception and providing inaccurate information punishable. The punishment is a ban from bidding for contracts for an unspecified amount of time. The above laws regulate the procurement of the armed forces. The procurement committee includes a person from the Ministry of Industry and Trade and one from the Department of Finance [4,5].

This sub-indicator has been marked as Not Applicable because the procurement committee has limited authority to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery and corruption related offences. The committee reports such cases to the commander in chief who decides the outcome. However, there is no available information about sanctions [1,2].

This sub-indicator has been marked as Not Applicable because there have been no cases of investigation of persecution. As a source informed us: “For 15 years in service, I never saw some companies persecuted even when there was some evidence of failure, just because a senior official relative owns the company” [1,2].

There is no evidence that training on collusion is provided to procurement officials [1,2].

Collusion in procurement processes within public service institutions which also covers Ministry of Defence (MOD), is addressed in the Public Procurement and Asset Disposal Act Code of Ethics. Part III of the Code as well as section 66 of the Public Procurement and Asset Disposal Act (PPAD) lays out the obligations that state officers and bidders need to adhere to the following regulations. They includes any corrupt, fradulent and collusive practices, for bidders only. [1] Further, the Public Procurement and Asset Disposal Act clarifies on what corruption in procurement means, as defined in the Anti-Corruption and Economic Crimes Act, 2003. [2] The latter prohibits even officials in public service from abuse of offfice related to procurement.

Section 46 of the Anti-Corruption and Economic Crimes Act warns against the improper use of an office for one’s benefit or the benefit of others. [3] While there are legal instruments, one of the main weaknesses in the legal regime is that security institutions like MOD have loopholes since first their audits are classified in most cases and are treated with secrecy. Hence their procurement processes are not subject to all accountability channels. Furthermore, the nature of the PPAD is designed in a way that The Public Procurement Regulatory Authority (PPRA) is reliant on individuals to report reporting cases of collusion, such a process to take place when there is very limited or no information means that most process go unscrutinized.

Section 176 of the Public Procurement and Asset Disposal Act outlines the prohibitions and offences related to public procurement. Sanctions outlined for bribery and corruption offences include a fine of not more than four million Kenya shillings, a jail term of not more than ten years, or both. Any person who is not a public officer can be debarred if found guilty. [1] Other sanctions include fines for corporates (exceeding ten million shillings or $93,216 – 1 USD = 107.23 KES), voiding of contracts, barring from future tendering among others. While this is progressive, it seems unproportional to the high value of contracts in defence industries some running to million of dollars.

Cases related to corruption, bribery and collusion between bidders and defence officers are at times investigated and some often go to trial. There have been instances where military officials that have been court martialed in relation to procurement offences. [1] However, military officers often report of unfair trials in the court martials, which lead to wrongful convictions. One such case was Major Laban Nyambok, who was court-martialed over corruption case involving Defence Forces Medical Insurance Scheme (Defmis) in 2015. [2]

Major Nyambok attempted to petition the Kenyan High Court to, among other things, hear the case as opposed to the court martial as well as grant him bail. Although the Laban Nyambok case was dismissed by the High Court, during the trial many allegations rarely known to the public were made explicit, particularly the manner in which the court martial operates, highlighting serious concerns about the nature of its processes. Some of the allegations include lengthy period of detention without trial, lack or no investigations, among others. [3] In other instances, there are media reports that have alleged that prosecuted military officers report their seniors getting away with corruption while they are wrongly prosecuted. [4]

The Public Procurement Regulatory Authority (PPRA) is mandated by the Public Procurement and Disposal act to implement and operationalize the public procurement system through inter alia training and professional development of public officials involved in public procurement processes country-wide. [1] The modules cover the legal framework that is the Public Procurement act, preference and reservation regulations; procurement methods and threshold matrix; role of procurement committees; procurement records, management and ethics. [1]

Some of the trainings are initiated by PPRA and some are demand-driven that is requested by the state agencies. [1] However, PPRA has noted that they face a number of challenges ranging from inadequate staffing to meet the large number of training requests from procuring entities; short training durations and inadequate funding to carry out extensive capacity building programs. [1]

Nevertheless, from the information that is publicly available it is impossible to confirm whether or not there is training that has taken place for MOD procurement committees officialls due to limited or no information. The Ministry of Defence website has some information about training staff on procurement management. [2] However, there is limited or no information is available on specific training on collusion as well as the frequency of such training.

No legislation in Kosovo specifically refers to the defence sector when defining collusion between bidders or between an official and a bidder. The existing Procurement Regulation for Defence and Security Purposes does not refer to this issue [1], although the Law on Public Procurement addresses collusion. The law states that unlawful influence is defined as a situation when a person provides, offers, solicits or accepts anything of value (including, but not limited to, money, an offer of employment, tangible or intangible property, a favour or service) for the direct or indirect benefit of an employee, former employee, official or former official of a contracting authority, or any person associated with them, wholly or partly for the purpose of influencing or attempting to influence a decision or action connected to a procurement activity [2].

The Law on Public Procurement does not explicitly stipulate that procurement officials have legal rights to exclude companies or senior company officials in the case of a conviction or of reasonable evidence of bribery or corruption-related offences. However, there are some legal provisions referring to this issue:
The Law stipulates that whenever a contracting authority prevents a candidate or tenderer from further participation in a procurement activity, that contracting authority shall immediately notify the candidate or tenderer in writing, providing one of the following reasons: i) in the case of a rejected candidate, the statement shall specify the reasons for the rejection of that candidate’s request to participate [1]; ii) in the case of a rejected tenderer who was rejected due to submitting an irregular or ineligible tender, the statement shall specify the deficiencies of the tender [1]; and iii) in the case of an unsuccessful tenderer who submitted a tender, the statement shall specify the characteristics and features of the winning tender and the name of the winning tenderer [1].
Furthermore, a contracting authority may terminate a procurement activity that does not result in the award of a contract for the following reason: a violation of the Law on Public Procurement has occurred or will occur during the procurement procedure, and this cannot be remedied or prevented through any lawful amendment of the procurement conditions [2].
Based on the Criminal Code of Kosovo, whoever intentionally violates public procurement rules during a bid for a public procurement contract, presents false documentation, partakes in illegal secret agreements, or undertakes any other illegal action during public procurement procedures is punished by a fine and by imprisonment of up to five years [4]. In addition, perpetrators of criminal offences who acquire property or cause substantial property damage (of a value of over five thousand euros) will be punished by a fine and imprisonment of one to eight years [4]. The Criminal Code also determines that if the perpetrator is an economic operator, the court will prohibit them from taking part in public procurement procedures [4]. The Procurement Review Body is legally obliged and authorised to review and disqualify – through written request – any economic operator from participating in public procurement for a period of up to one year who has provided false information or forged documents [5].

Prosecutors in Kosovo investigate cases relating to violations of public procurement rules in the country. However, there are a number of challenges in this process, as evidenced by the Civil Society Organisations who monitor the process. Prosecutors have been involved in the recent years to deal with allegations in the procurement sector, and the success in prosecuting senior officials and confiscating unlawfully acquired assets has been symbolic in recent years [1].
In general, there is a concern among prosecution bodies around the small number of prosecutors in the Serious Crimes Prosecution Department, with only forty-three prosecutors in total engaged in this department [2]. Another challenge is the lack of prosecutors’ profiling in public procurement cases and the need to increase their professional capacity [3]. Prosecutors have stated the need to specialise and be offered professional development for public procurement cases [3]. Even though there are figures that indicate that the Prosecution has resolved some cases related to corruption, the lack of profiled prosecutors and the lack of results in public procurement cases remains concerning [3]. According to the Civil Society Organisations’ research findings, due to the complex nature of public procurement cases, the investigation and disclosure of cases is complex [4]. This is mainly due to the professional shortcomings of the Prosecutors and the lack of external experts in the area of public procurement, which consequently leads to the inability and difficulty in resolving cases in this field [4]. Prosecutor representatives point to the lack of licensed experts in the area: out of five Prosecution experts, only two are licensed in public procurement [4].
The lack of cooperation between the procurement bodies and the Prosecutors is another major impediment to preventing abuse in the public procurement sector in Kosovo [4]. The findings evidenced by the Public Procurement Regulatory Commission has not been shared with other institutions [5], and the Procurement Review Body does not seem to work with the Prosecutors regarding violations of the Law on Public Procurement [6].

According to the electronic procurement platform prepared by the Public Procurement Regulatory Commission, no specific training is provided to procurement officers to help identify collusion patterns. However, there was a comprehensive training held for procurement officers on anti-corruption measures and integrity within public procurement [1]. However, this material did not specifically address collusion.

Collusion between bidders is illegal in Kuwait in general, according to the PTA’s law (1). In fact, the whole tender process can be dissolved if evidence of the practice emerged, according to section 5 of article 50 of the law.

But this is one of the laws that do not apply to the aforementioned “defense materials” purchases. It is unclear if the internal tender policy of the security agencies also outlaw this practice because these policies are not available to the public or upon request.

Defense purchases, according to the government guide of doing business in Kuwait, include all weapons, communications and monitoring systems related to defense and security (2).

This sub-indicator has been marked Not Applicable because it is unclear if there is such legislation that applies to the defence sector. There is also no information on what happens if/ when this practice occurs. (1-3)

This sub-indicator has been marked Not Applicable because it is unclear if there is such legislation that applies to the defence sector.

There is no evidence that training is provided to procurement officials with regards to collusion.

Legislation is in place prohibiting collusion between the representatives of the defence sector and bidders, and between bidders themselves (Public Procurements Law, Defence and Security Procurements Law, Law on Prevention of Conflict of Interest among Officials, Competition Law). [1] [2] [3] [4]
According to publicly available information, procurement officials of the defence sector have been recently trained to identify collusion between bidders. [5]

There is clear legislation and freedom of action (and duty) for the procurement commissions to exclude bidders from the competition in case the bidder or a senior representative is found to have committed crimes related to bribery, fraud, tax avoidance and other offences. [1] [2]

The Competition Council has demonstrated activity and independence on various occasions, punishing collusion between bidders. It has also warned the defence sector of the higher risks it presents, given the limited competition. [1] However, publicly available information indicates the last case in the defence sector was in 2013 when two contruction companies were financially punished for a collusion. [2] There have been no public cases where political influence has been investigated and punished.

The Competition Council offers training for procurement specialists on collusion patterns and potential malpractices. [1] [2]

No specific laws were found that prohibit collusion within the defence sector, where collusion is defined as between an official and a bidder or between bidders (1). Although Lebanon has “Illicit Wealth Law” that prohibits state employees from using their positions in public administration to gain money, it is ineffective (2). The GDA is responsible for overseeing the procurement process (3). According to the DoO, military personnel are continuously reminded of the rules and procedures that have anti-corruption content (4). The US’s IMET programs trains militaries in financial management, procurement, and acquisition all emphasize anti-corruption best practices, and the LAF take part in that training (5).

Decree no. 11574 empowers procurement officials to exclude companies where there is a conviction or reasonable evidence of bribery & corruption-related offences. But the range of sanctions available is limited to debarment (1).

This sub-indicator has been marked Not Applicable, as there is no legislation covering defence procurement that addresses collusion (1).

There are no specific laws in place that prohibit collusion within the defence sector, where collusion is defined as between an official and a bidder or between bidders (1). According to the DoO, military personnel are continuously reminded of the rules and procedures that have anti-corruption content (2). Furthermore, no specific training is provided on collusion patterns and reporting malpractices (2).

Laws (and procedures to follow up) are in place that prohibit collusion in public procurement, including in the defence sector. The Law on Public Procurement in Defence Sector does not specifically address collusion between bidders. It only mentions the importance of ensuring transparency, and allows the Public Procurement Office to pass on the information for investigation to either law enforcement authorities or the Competition Council of the Republic of Lithuania if any possibility of corruption is suspected [1]. In contrast, the more general Law on Public Procurement does address collusion between bidders (this law is also applicable to procurement by the Ministry of National Defence with the exclusion of procurement relating military equipment). In 2017, amendments to the Law established the possibility for the contracting authority to eliminate the supplier if they had entered into agreements with other suppliers aimed at distorting competition during the course of an ongoing contract (and only the contracting authority had compelling data on this) [2,3].

As mentioned in the previous sub-indicator (66A), collusion between bidders is addressed in the Law on Public Procurement and allows the contracting authority to eliminate suppliers from a procurement project based on compelling evidence that the supplier in question is a part of a cartel or has entered into an agreement with other suppliers in order to restrict competition in some way [1]. The Law is not applicable to acquisitions under country-to-country agreements, nor to those related to intelligence purposes (the latter acquisitions are regulated by the Government). The Law on Competition also aims to protect freedom of fair competition and prohibits all agreements aimed at restricting competition. Upon establishing that a supplier has performed actions prohibited by this Law or has otherwise violated this Law, the Competition Council has the right to, for example, impose fines on the supplier or to oblige the supplier to terminate any illegal activity, perform restorative or eliminate the consequences of the violation [2].

As mentioned in the sub-indicator 66B, the Law on Competition prohibits all agreements that might restrict competition [1]. The Competition Council is responsible for investigating and examining infringements of this Law and other laws as well as for imposing sanctions on the violators by following the procedure provided by law [2]. Article 101 of the Treaty on the Functioning of the European Union prohibits agreements between companies which prevent, restrict or distort competition, and the breach of these laws may result in heavy fines [3]. From desk research, it does not seem that there have been recent cases indicating collusion between bidders in the defence sector. There is no mention however of criminal sanctions directed at the cartels. Also, due to shadow lobbying in the country there is no possibility to confirm that undue political influence does not exist.

Given that there are no known recent cases of collusion, this indicator is scored Not Applicable.

The assessor found no evidence of trainings being conducted.

There is no specific legislation that prohibits collusion in the defence sector. However, contract processes are subject to the Ministry of Finance’s scrutiny and a Malaysia Anti-Corruption Law (MACC)’s investigation if malpractices occur. [1] Furthermore, in April 2018, a new Section 17A was introduced to the MACC Act to criminalise organisations for corrupt actions by associated persons done for the benefit of the company. [2] The law took effect in June 2020.

There is no clear legislation on the requirements. Guidelines do exist, whereby a Ministry might bar companies or individuals that have been “blacklisted” from being involved in contract bidding. [1] There are also other mechanisms imposed on contractors, such as the penalty clause in a procurement contract, which means that the contractor has to pay if the company fails to deliver according to the contract delivery time or the standards as stipulated in the schedule. [2]

In general, when a case arises, investigation is done through a formal process however, political involvement and palace connections can derail the process from moving to the next level. Furthermore, blacklisted companies sometimes escape the exclusion by setting up new companies, with a new list of directors, as a way to circumvent debarment. [1] While Malaysia is not short on legislation (although collusion is perhaps being one area where there is no formal legislation), the enforcement of legislation is severely lacking in the defence industry. [2] [3] [4]

There is not enough evidence to score this indicator. Civilians as well as military personnel are required to attend training in their respective fields or job specifications, at least seven days a year, conducted by the Human Resource Division. The training can encompass various aspects of management, including leadership and ethics, but there is a lack of explicit training on corruption. Most of these training modules do not address corruption per say but include it in aspects of the values of Islamic teachings. The Ministry of Defence (MINDEF) also outsources experts from the Public Service Department (PSD) for the process of mentoring, coaching, and shadowing. The National Institute of Public Administration (INTAN) does some of these courses but many ministries and agencies also engage external consultants. It is difficult to determine whether all subject matters included in collusion are fully covered. [1].

The public procurement code (Code des Marchés Publics et des Délégations de Service Public) clearly outlaws collusion between bidders, but doesn’t extend to contracting authorities.¹
Article 127 of the code, which sits within the chapter relating to candidates for and holders of public contracts, lists a series of offences that warrant sanctioning. Among them is one that forbids candidates or holders from “engaging in acts of collusion between candidates to inflate the price of offers to artificial and non-competitive levels, denying the contracting the authority the advantages of a free and open competition”.¹
While not referenced in the procurement code, public officials found guilty of facilitating or participating in acts of collusion are subject to punishments in accordance with the Penal Code.
The Penal Code allows for the punishment of those deemed to share information unlawfully:⁵ Section 3, article 130 of the Penal Code states:
“Anyone who, by position or profession had secrets entrusted to them, that they then revealed shall be punished by imprisonment of six months to two years and, optionally, a fine of 20 000 to 150 000 francs.
The penalties will apply in to members of all jurisdictions guilty of violating the code. If the offender is a public officer or government official, he will be punished by three months to five years imprisonment and a fine from 20,000 to 240,000 francs. The culprit will become forbidden from any function or public employment for at least five to ten years.
Except as provided above, deletion, all correspondence opening addressed to third parties, in bad faith, shall incur the same penalties.
The attempt of the offence shall be punished as if the offence itself”.⁵
Article 123 of the code also outlaws “trading of favours” for commercial or private gain by state employees or private individuals.⁵ Offenders are thus subject to the penalties contained in article 121 of the Code, which states that “Anyone in either the performance or the obtaining of an act or benefits or favours, uses violence or threats, promises, offers, gifts or presents, or acts tending to corruption will be subject to the measures included in article 130, ‘five to ten years’ imprisonment and a fine of twice the value of approved promises or things received or requested, without that fine be less than 100,000 francs”.⁵
However, article 8 of the Procurement Code creates a large legal loophole for defence and security contracts, which can exempt them for all of the standard procurement requirements (see Q57A).¹ This provision undermines the legal framework covering defence procurements and prevents the country from scoring higher than a 2 on this measure.

The public procurement code (Code des Marchés Publics et des Délégations de Service Public) provides sanctions for acts of collusion between candidates or holders of public contracts.¹
Article 128 states that entities found guilty of collusion or acts of corruption by the relevant body (Comité de Règlement des Différends) can have their contracts confiscated and be banned from competing for public contracts for a variable period of time, which is determined by the seriousness of the offence committed.¹ Such bans can extend to companies holding a majority share in firms that contravene the rules and for companies in which the offending entity retains a majority stake.¹ The procurement code underlines that any sanctions issued under the code are not prejudicial to any legal prosecution that may follow. Yet, there is no evidence of clear implementing guidelines empowering procurement officials to exclude companies and senior company officials, and to what extent officials can block companies or individuals with previous convictions, etc. from bidding.
The Penal Code allows for the punishment of those deemed to share information unlawfully:² Section 3, article 130 of the Penal Code states: “Anyone who, by position or profession had secrets entrusted to them, that they then revealed shall be punished by imprisonment of six months to two years and, optionally, a fine of 20 000 to 150 000 francs.
The penalties will apply in to members of all jurisdictions guilty of violating the code.
If the offender is a public officer or government official, he will be punished by three months to five years imprisonment and a fine from 20,000 to 240,000 francs. The culprit will become forbidden from any function or public employment for at least five to ten years.²
Except as provided above, deletion, all correspondence opening addressed to third parties, in bad faith, shall incur the same penalties.
The attempt of the offence shall be punished as if the offence itself”.²
Article 123 of the code outlaws ‘trading of favours’ for commercial or private gain.² Offenders are thus subject to the penalties contained in article 121 of the code, which states that “Anyone in either the performance or the obtaining of an act or benefits or favours, uses violence or threats, promises, offers, gifts or presents, or acts tending to corruption will be subject to the measures included in article 130, ‘five to ten years’ imprisonment and a fine of twice the value of approved promises or things received or requested, without that fine be less than 100,000 francs”.²
Thus, acts of collusion between bidding parties are highly likely to fall foul of the penal law too, exposing offenders to the threat of criminal prosecution and heavy sentences.

Even though investigations are theoretically possible, evidence suggests that there have not been any since 2013.
Cases of possible collusion in defence contracts are seldom investigated and there have been no signs that the authorities are willing or capable of prosecuting offenders. Indeed, there have been no such prosecutions since IBK became president in 2013.
One media article refers to a possible case of collusion relating to a public tender issued by the state-owned textile company, Compagnie Malienne pour le Développement des Textiles (CMDT).¹ The contract was for the supply of fertiliser for the 2015-2016 season.¹ The article alleges that despite attracting more than 30 tenders for the contract, 15 of the companies colluded to set an artificially high price.¹ It alleges that the officials awarding the contract received kickbacks of 10,000 CFA per tonne of fertiliser agreed upon in the contract.¹ There is no record of the case having been investigated by the authorities or of anyone being held accountable.¹
The judicial system in Mali is unable to efficiently deliver prosecutions as a result of internal corruption. For example, in December 2013, judicial representatives threatened to hold an indefinite strike due to state interference in arrest warrants against judges accused of corruption.¹¹ The same month, four judges and a court clerk were arrested on suspicion of corruption.¹²
The IMF says that “economic agents involved in bribery are seldom prosecuted. Embezzlement in public procurements is sanctioned by the criminal code, but there again prosecutions remain the exception rather than the rule. Administrative sanctions against bidders and holders of public contracts exist for cases of incitement to corruption or the commission of fraudulent acts. However, in practice, they are seldom or never applied”.¹⁵
A US State Department report also noted in 2013 that “corruption and limited resources affected the fairness of trials. Bribery and influence peddling were widespread in the courts (…) There were problems enforcing court orders. Sometimes judges were absent from their assigned areas for months at a time”.¹² Other cases illustrate the judiciary’s continuing inability to challenge the executive.
When the IMF, the World Bank and the EU suspended their aid programmes to Mali following reports of the off-budget purchase of a new presidential jet in 2014, the BVG audited the account (see Q16C). The BVG determined that the former Minister of Defence, Soumeylou Boubeye Maïga, and the Minister of the Economy incorrectly interpreted article 8 of the Procurement Code that allows for certain acquisitions to be off-budget (see Q29A).²
The audit found that the government had spent 87.77 billion CFA (USD 163.44 million) on defence items that were not declared in the official budget.² ³ The report found that 18.59 billion CFA went towards the presidential jet, of which CFA1.4 billion were commissions and fees paid to a broker linked to the president’s friend, Michel Tomi.⁵ Meanwhile, a further 69.18 billion CFA was spent on other military equipment, primarily transport vehicles.⁹ The BVG found that the MDAC had failed to respect the 2014 Finance Law requiring it to register these contracts and submit them as part of the annual budget. Moreover, many of the contracts were found to be heavily overpriced, strongly suggesting that these acquisitions involved substantial illicit activity.³ ⁴ ⁵ The public prosecutor launched an investigation into the affair, but as of April 2018, no charges had been brought against any of the individuals or companies implicated in the BVG’s report.⁶ Indeed, the Defence Minister responsible for signing these contracts, Soumeylou Boubeye Maïga, has since returned to government as Prime Minister. This is despite the fact he was reportedly arrested in Paris by French police in 2014 in connection with an ongoing investigation into French businessman, Robert Franchitti. Franchitti, whose company MagForce bought military equipment from Guo Star and sold them to Mali for ten times the price, was arrested on arrival at the hotel where Maiga was staying.⁷ ⁸ Franchitti reportedly had EUR 10,000 in cash on him, which he was intending to pay to Maiga.⁷ ⁸ Moreover, IBK’s special advisor, Sidi Mohamed Kagnassy, was reportedly Director General of Guo Star at the time of the deal (he denies this), indicating an obvious potential conflict of interest and a significant potential for collusion.⁹
Finally, there are reports in the Malian media, based on sources within the defence sector, alleging that fraudulent practices are commonplace at the Directorate of Finance and Equipment (DFM).¹³ Defence contracts are not typically subject to open and competitive tenders: instead they are often awarded to family members or close associates of defence officials amid a lack of accountability for offenders.¹³
Mali’s online portal for public contracts publishes a list (Liste Rouge) of the individuals or companies it has deemed ineligible to apply for public tenders.¹⁴ As of April 2018, only one person appears on the list. In August 2014, ARMDS judged that the businesses of Hamady Traore would not be able to compete for public contracts for a period of three years. However, it does not specify why the decision was taken.¹⁴

There is also evidence that officials responsible for overseeing the handling of public contracts undergo annual training to help them regulate public tendering processes and awards and ensure good governance (1), (2), (3). The comprehensiveness and regularity of the training programmes undertaken suggest that officials receive training in how to identify acts of collusion.

There are regulations prohibiting collusion for federal procurement and contracting processes, applicable to the defence sector.

The LGRPA indicates that “the individual who executes with one or more private subjects, in matters of public procurement, actions that imply or have the object or effect of obtaining an undue benefit or advantage in public contracts of a federal, local, or municipal nature, shall incur in collusion. Collusion shall also be considered when individuals agree or conclude contracts, agreements, arrangements, or combinations between competitors, the object or effect of which is to obtain an undue benefit or cause damage to the Public Treasury or to the patrimony of public entities.” [1]

The LFCE also prohibits those practices that “diminish, harm, impede, or condition free competition in the commercialisation of goods or services in any way, such as monopolies, monopolistic practices, and illegal concentrations.” In this regard, it considers absolute monopolistic practices the object of which or effect is “to fix, raise, arrange, or manipulate the sale or purchase price of goods or services at which they are offered or demanded in the markets; as well as to establish, to arrange, or to coordinate positions or the abstention in the bids, contests, or auctions.” [2]

It should be mentioned that the definition does not stipulate collusion between an official and a bidder, it is only limited to bidders.

The legislation empowers agencies and entities to exclude companies or individuals involved in bribery or corruption, refraining from receiving proposals or awarding contracts to them. [1] In fact, there is a directory of sanctioned suppliers and contractors that allows public officials to verify that bidders are not unable to present proposals or enter into contracts with agencies, entities of the Federal Public Administration of the State Governments. [2] The sanctions contemplate fines and temporary disqualifications from 3 months to 5 years, [3] and more recently, definitive disqualification. [4]

These powers are applicable to defence and security institutions, just as sanctions are applicable to companies that commit crimes and want to enter into contracts with these agencies. [5] [6] [7]

There is evidence of economic sanctions and disqualifications imposed on companies that have incurred in collusion. COFECE, for example, publishes on its official site the fines it imposes through monthly, quarterly, and annual reports. [1] Regarding the work of the SFP, it is common to find information on cases in the process of sanction – economic and / or disqualification. [2] [3]

However, analysts on the matter show cases with undue political influence when applying the law, such as companies that fail to comply with the sanction imposed by various government administrations. [4] [5] [6] [7] [8] [9]

With regard to the training received by officials to identify patterns of collusion, it is up to the ICOs of each department to adopt the necessary measures to prevent administrative misdemeanors and acts of corruption. No further information on this subject could be found.

There is no legislation specific to the defence sector. However, the Law on the protection of competition addresses collusion, which is limited to bidders only. [1][2]

According to the MoD reviewer, the Law on Public Procurement recognizes the principle of ensuring competition as one of the basic principles, which stipulates that the Contracting Authority is obliged to take the necessary measures to ensure competition among bidders, in accordance with the law. The contracting authority cannot restrict or prevent competition between tenderers, and in particular it may not prevent any tenderer from participating in the procurement procedure by unjustified application of the negotiated procedure or by using discriminatory conditions and criteria or measures favouring particular tenderers. The Law on Protection of Competition of Montenegro regulates the area of competition protection on the Montenegrin market. The provisions of the Competition Law prohibiting agreements that may restrict, distort or prevent competition may also apply to market participants when participating in public procurement procedures. Where there is a presumption of an agreement between tenderers leading to a competitive infringement in public procurement procedures, contracting authorities or other interested parties may initiate a competition infringement procedure before a Competition Agency which decides on this legal matter and takes the appropriate measures provided by the Law.

In order to participate in public tenders, companies and their legal representatives have to prove that they were not found guilty by final judicial verdict of organised crime with elements of corruption, money laundering and fraud. [1]

In other words, if companies or individuals were found guilty of corruption, but not organised crime, then they cannot be excluded from public tenders. However, legal actions taken post-contract are not regulated.

There are no publicly known cases where collusion for defence and security contracts was investigated or prosecuted [1][2].

According to the Law on Public Procurement (Official Gazzette of Montenegro no 42/11, 57/14, 28/15 i 42/17), officials for public procurements must undertake a special exam (1). The Directorate for Public Procurement organises trainings for public procurement officials from various institutions, but available training materials are showing that no training is provided with regards to collusion (2).

In the general legislation, the 2013 version of the Code of Public Procurement Contracts provides the following in relation to collusion between bidders. Nothing in this legislation explicitly exclude defence and security (1)(2).
⁃ Article 168 forbids fraud, corruption and conflict of interest but does not refer to sanctions for individuals found guilty of these offenses.
⁃ Article 26 states that candidates to a procurement contract must make a sworn statement about avoiding conflict of interest.

No evidence was found of legislation in place that specifically discourages and punishes collusion between bidders for defence and security contracts (3). Moreover, the lack of transparency over the previous elements discussed in this assessment concerning procurement contracts – including the omerta on detailed military spending and the King’s absolute power over this sector – increases the risk of corruption in this regard.

This sub-indicator has been marked Not Applicable because there is no legislation covering defence procurement that addresses colusion.

Procurement officials have no authority to exclude companies or individuals implicated in bribery or corruption related offences, as there are no legal provisions enabling sanctions against individuals found guilty these offenses.

In the general legislation, the 2013 version of the Code of Public Procurement Contracts provides the following in relation to collusion between bidders (1).
⁃ Article 168 forbids fraud, corruption and conflict of interest but does not refer to sanctions for individuals found guilty of these offenses.
⁃ Article 26 states that candidates to a procurement contract must make a sworn statement about avoiding conflict of interest.

However, no evidence was found of legislation in place that specifically discourages and punishes collusion between bidders for defence and security contracts (2). The lack of transparency over the previous elements discussed in this assessment concerning procurement contracts – including the omerta on detailed military spending and the King’s absolute power over this sector – increases the risk of corruption in this regard.

This sub-indicator has been marked Not Applicable because there is no legislation covering defence procurement that addresses colusion.

There is a complete failure to investigate or prosecute, even in the face of clear evidence, as there are no legal provisions enabling sanctions against individuals found guilty of these offenses.

In the general legislation, the 2013 version of the Code of Public Procurement Contracts provides the following in relation to collusion between bidders (1).

⁃ Article 168 forbids fraud, corruption and conflict of interest but does not refer to sanctions for individuals found guilty of these offenses.

⁃ Article 26 states that candidates to a procurement contract must make a sworn statement about avoiding conflict of interest.

However, no evidence was found of a legislation in place that specifically discourage and punish collusion between bidders for defence and security contracts (2). The lack of transparency over the previous elements discussed in this assessment concerning procurement contracts – including the omerta on detailed military spending and the King’s absolute power over this sector – increases the risk of corruption in this regard.

No information regarding training for procurement officials has been found.

There is the Anti-Corruption Law in Myanmar, enacted in 2014. However, this law cannot regulate military activities because of Article 20(b) of the Constitution, which states that the military can administer its own affairs independently [1]. A military contractor said that there is no requirement to sign an anti-corruption clause in contracts [2].

There is no legislation that applies to the defence sector in which collusion is prohibited. As such, this indicator is marked ‘Not Applicable’.

As noted in 66B, there is no legislation that prohibits collusion in the defence sector. As such, this indicator is marked ‘Not Applicable’.

No information could be found to clarify whether training is provided to procurement officials with regards to collusion. As such, this indicator is marked ‘Not Enough Information’.

Collusion is prohibited under several laws and guidelines. Chapter 3 of the Dutch Competition Act prohibits agreements between enterprises, decisions of associations of enterprises and concerted practices of enterprises, the object or effect of which is to prevent, restrict or distort competition on the Dutch market [1]. Therefore, only collusion between bidders are included in the definition. There is no exception for the defence market. In addition, Article 10 of the Public Procurement Act obliges contracting authorities to take measures to prevent and avoid the distortion of competition [2]. Furthermore, Article 21 of the General Government Purchasing Conditions 2018 (ARIV 2018) states that all parties, including bidders, officials and third parties, cannot ask for, accept or obtain any benefit of any form if it can be construed as constituting an illicit practice [3].

The COID’s annual report describes a number of integrity training workshops that were conducted with the Defence Materiel Organisation throughout the year and during induction training, however there is no clear information that the subject of collusion was covered. [4]

The consequences for violation of the Competition Act for companies include fines, penalties, ‘binding instructions to comply with the law’, and/or make a company deliver a binding commitment to cease illicit behaviour.[1] Fines can be as much as € 450,000 for companies or if their turnover exceeds 4.5 million euros, up to or 10% of the annual turnover. Additionally, directors and executives can be fined up to € 450,000. The government is currently evaluating whether to increase these fines to prevent collusion. [2] The Authority for Consumers and Markets (ACM) investigates and prosecutes collusion, either based on internal suspicions or on signals/requests by the defence ministry, and afterward it is at the government’s discretion whether or not to exclude the company from further consideration in bidding [3]. How this decision is made exactly and whether this has happened in recent years, is unclear.

The role of the Netherlands Authority for Consumers and Markets (ACM) is to supervise market competition, enforce consumer law and collaborate with legislators on legal reform [1]. Cases of alleged collusion can be reported to the ACM by anyone through an online tip-off system [2]. The ACM has the power to enter premises, request information, demand access to documents and take data [3]. These powers apply to business premises as well as private homes and everyone is required to cooperate with the investigations [3]. The ACM has several enforcement mechanisms at its disposal. It has the ability to impose fines for violations on both the companies as well as on the individuals involved. The level of the fine depends on the seriousness and the duration of the violation and it is set and published with the intention of acting as a deterrent to other companies too [3,4].

ACM investigates cases from defence sector, too. They concern both collusion of defence contractors and distortion of competition by MoD and its entities.
In 2009, six companies were punished by fines due to cartel agreement concerning painting of barracks. [5,6] In another case, the Marcandi Foundation, founded by the Royal Netherlands Navy, has stopped selling food and non-food products to various customers outside the Navy. [7]

The ACM is an independent organisation and there is no evidence to suggest that it is subject to undue political influence.

The Netherlands Competition Authority publishes information for procurement officers on detecting and preventing collusion. The advice includes information of the types of ‘cartels’ and collusive tendering, what the warning signs are in regard to bid patterns, pricing and behaviour, what phrases mark the possibility of collusion, and how to prevent collusive tendering. [1,2] If a procurement officer suspects collusion, they are instructed to report this confidentially to the Netherlands Competition Authority online, via email, phone or mail so that an investigation can commence. [3] Procurement officers can also seek advice from the Central Defence Integrity Organisation (COID). [4] In addition, ACM works together with PIANOo (the Dutch Public Procurement Expertise Centre) to give advice to contracting authorities on unfair competition and collusion in government tendering processes. [5] When it comes to actual trainings, the ACM indicated they do not give trainings, but that if trainings exist for Defence personnel they will be done either by PIANOO or individual law firms (in which case it may be hard to establish exactly the prevalence) [6]. There is no publicly documented proof of these trainings found so far.

The Commerce Act 1986 charges the Commerce Commission with oversight of anti-competitive behaviour. The act considers restrictive trade practices and provides a range of penalties for it [1]. Defence procurements are not exempt from these regulations. Collusive tendering is not explicitly mentioned in the act, however it collectively falls under Section 30A relating to price fixing, output restriction, and market allocation prohibitions. For this reason, bid rigging, or collusive tendering, is deemed a form of cartel conduct [2, 3, 4]. Bid rigging between suppliers is specifically mentioned in the Commerce Commission guidelines. It is likely that bid rigging between officials and suppliers is not mentioned as there is no history of it occurring in New Zealand, however the guidelines do raise awareness of unintentional facilitation of collusion by official [5]. Such a stance is supported by the Commerce Commission, which acknowledged that it had no information on any investigation, complaint, enquiry or finding relating to defence and security procurements during the period between 1 January 2015 and 1 December 2020 [6]. Evidence of deliberate collusion on behalf on an official could be prosecuted under the Crimes Act 1961, and various sections of the state service Code of Ethics, and at the least would result in employment termination.

In matters relating to restrictive trade practices, the Commerce Act 1986 allows the court, on application by the Commerce Commission, to order a person to pay to the Crown such pecuniary penalty as the court determines appropriate. In the case of individuals this must not exceed $500,000 NZD, or $10 million NZD in any other case [1]. In addition, certain persons may be excluded from management of body corporate, and if found in contravention to this may be liable for imprisonment not exceeding five years or a fine not exceeding $200,000 NZD [2, 3]. There are a broad range of other penalties and remedies that may be applied for other matters such as business acquisitions, and regulated goods and services, all of which could be linked to bribery and corruption [4]. The New Zealand Government Procurement Rules provide guidance on excluding suppliers and courses of action. An agency may exclude a supplier without referral to the court, however excluding suppliers is deemed to be a serious act and must be supported by evidence and the supplier must be notified by the agency of its exclusion and the reasons for it. The rules do not stipulate if there needs to be conviction but as it would be a serious action, an excluded supplier would likely be referred to the SFO or Commerce Commission for further investigation [5]. Enforcement Response Guidelines are also available from the Commerce Commission and these detail an array of sanctions and process that could be taken [6].

Nothing could be found on the Commerce Commission Case Register to show evidence of collusion between bidders for defence and security contracts during the period between 1 January 2015 and 10 December 2020 [1]. Information provided by the New Zealand Government for this assessment indicates that it takes any collusion or anti-competitive behaviour by bidders seriously, and should evidence be found for it occurring it would be punished [3]. Given that no cases of collusion could be found during this research period, this indicator is marked ‘Not Applicable’.

The Commerce Commission and New Zealand Government Procurement both issue detailed guidelines to the public sector on matters relating to collusion and bid rigging [1, 2]. Moreover, Defence staff are familiar with the Organisation for Economic Cooperation and Development’s regulations and recommendations for combating bid rigging and foreign bribery, as well as the Serious Fraud Office’s role in countering serious or complex financial crime in New Zealand [3, 4, 5]. Training is provided to project staff at each phase of the procurement life-cycle on the expected behaviours, including supplier behaviour (as noted in Q65C), but it does not specifically cover collusion. [6]

Decree No. 2013/570/PRN/PM, Chapter XIII (Contrôle à postériori et sanctions A posteriori control and sanctions), Article 74, Section 3, prohibits acts of collusion among bidders for a procurement contract (1). However, it does not contain any provisions requiring procurement officials to be trained in identifying such acts.

Article 74 states:
“Offences and sanctions applicable to the candidates and holders of procurement contracts: Within the scope of this Decree, the hereunder violations or breaches by candidates, tenderers or holders of public contracts are prohibited” (1).
(Consultant translation French to English)

Section 3 states:
“Collusion between bidders in order to rig bid prices at artificial, non-competitive levels and deprive the contracting authority of the benefits of competitive bidding” (1).
(Consultant translation French to English)

(Article 74:
“Infractions et sanctions applicables aux candidats et aux titulaires des marchés: Dans le cadre de l’application du présent Décret, les violations ou manquements ci-après sont interdits de la part des candidats, soumissionnaires et titulaires des marchés publics”.
Section 3:
“Les pratiques de collusion entre soumissionnaires afin d’établir les prix des offres à des niveaux artificiels et non-concurrentiels et de priver l’autorité contractante des avantages d’une concurrence libre et ouverte”. )

Decree No. 2013/570/PRN/PM, Article 75, Sections 1–6, is clear about the sanctions imposed on companies convicted of bribery or corruption during a procurement bid. Article 75 states:

“Without prejudice to the penal sanctions provided for by applicable laws and regulations, the contractor, supplier or service provider, whether candidate or holder of a procurement contract, responsible for and/or complicit in the above-mentioned offences, shall be subject to the sanctions hereunder which may be imposed cumulatively, as appropriate, with the consent of the Prime Minister” (1).

Six sanctions can be imposed, with the consent of the prime minister. The following sanctions are the punishments that can be imposed.
Sections 1-6
“1) exclusion from bidding;
2) rejection of its tender and seizure of the corresponding security;
3) forfeiture of guarantees as compensation for the damages suffered by the authority;
4) forfeiture of securities lodged by the offender as part of the contract,
5) exclusion from bidding for a specified period of time;
6) the establishment of a governance framework or the termination of the contract at the expense and risk of the holder.”
(Consultant translation French to English)

However, there is no mention of imprisonment for those found guilty.

The assessor found no evidence that collusion has taken place in defence procurement or more broadly in public procurement in recent years (1,2). However, the absence of available information does not mean such instances have not occurred. Given the confidentiality of the procurement process, it is plausible to assume that the risk of collusion may be high.

Decree No. 2013/570/PRN/PM, Chapter XIII (Contrôle à postériori et sanctions A posteriori control and sanctions), Article 74, Section 3, prohibits acts of collusion among bidders for a procurement contract (1). However, it does not contain any provisions requiring procurement officials to be trained in identifying such acts.

The PPA 2007 S.15 expressly excludes the defence sector from its ambit subject to presidential discretion (1). Sources confirmed that Tender Boards are subject to regulations and Code of Conduct under the PPA 2007 concerning non-defence items like building contracts and the supply of materials and services. The decisions of such boards are subject to independent audit and procurement compliance procedures (2). The Bureau of Public Procurement conducts public reviews and auditing to verify due process and fair and open competition. Part XI of the PPA provides for an extensive process which includes a Code of Conduct (1). Section 22 PPA 2007 provides that Tender Boards should be created in each procuring entity. Section 57(2) of the PPA 2007 imposes an obligation of honesty and accountability, transparency and accountability and equity on persons involved with public procurement (3). The Bureau of Public Procurement also has residual powers to review and recommend investigation of any matters related to the conduct of procurement. A bidder may, under section 54(1) PPA 2007, seek judicial review for any omission or breach by a procuring entity or disposing entity under the provisions of the Act. “Procurement offences – Contravention of any provision of the Public Procurement Act (PPA) is an offence (1). Particular offences under the Act include collusion with a supplier to quote a higher price and fraudulent and corrupt acts such as unlawful influence, undue interest, favour, agreement, bribery, and corruption. Other procurement offences include:
• Direct or indirect attempt to influence the procurement process to obtain an unfair advantage
• in the award of a procurement contract;
• Splitting of tenders to enable the evasion of monetary thresholds
• Bid-rigging
• Altering any procurement document with intent to influence the outcome of a tender
• proceeding
• Uttering or using fake documents or encouraging their use
• Willful refusal to allow the Bureau or its officers to have access to any procurement records” (1), (3).

The legal framework expressly prohibits collusion between bidders and public officials. There are further relevant rules contained in the Public Procurement Goods and Works Regulations 2007 (1).

The Procurement Act expressly excludes the defence sector from its ambit subject to presidential discretion. In discussions with a source at the MOD it was stated that although companies are not expressly blacklisted, unreliable companies are not selected even if they participate in the bidding process. Punitive provisions in the PPA 2007 include the power of the Bureau to exclude or blacklist companies which have engaged in procurement malpractice. Companies can be debarred and fined under the legislation. However, given that section 15(2) excludes goods and works and services involving defence or national security it is difficult to confirm the application of sanctions to defaulting companies in the context of defence specific goods and services (1). Under the Open Contracting policy adopted by the BPP, a database of 50,000 contractors has been created which is an official list of companies able to bid for government contracts. However, it is unclear what happens when companies not on the list obtain government contracts. In theory, only companies on the list should be able to bid for government contracts. A red flag should be automatically raised when a contractor not on the list is awarded a contract. The HSLi case illustrates that sanctions are rarely imposed even where cases of collusion between public officials and contractors are discovered (2).

Based on the investigation and prosecution of former defence chiefs following the Buhari administration’s creation of a Panel to investigate the defence sector, it is possible to say that cases are investigated and prosecuted. Based on the outcome of the investigation into defence procurement in previous years, it is arguable that the attitude of the current administration on enforcement is strong. In 2017 a report indicted several senior officers for irregularities in defence procurement. It stated that “the Nigerian Army contracts awarded by the MOD for the period under review were often awarded without significant input from the end-user (Nigerian Army) and to vendors who lacked the necessary technical competence” (1). Another noteworthy observation is that enforcement can also be selective when it is politically motivated or when there is strong political will. In many cases, there is no evidence of sanctions imposed on companies as the companies do not have a track record in the sector and then to be vehicles created by politicians to siphon funds. Further, the efficacy of the sanctions procedure can be questioned given that the companies involved are shell companies created as a vehicle to siphon funds. Such companies have no history or track (2). The HSLI case is illustrative of the weak enforcement of sanctions as neither the minister nor the company involved is currently facing any sanctions.

This indicator has not been assigned a score due to insufficient information or evidence.

Basic legislation against collusion between bidders is embodied in the Law on Public Procurement [1] and the Law on Protection of Competition [2].
Article 129 of the Law on Public Procurement stipulates that when submitting the bids, the bidders must submit a Statement of Independence in which they declare that they submitted the bid independently, without agreeing with any other economic operators, in a line with the regulations for the protection of competition. At the same time, they must declare when submitting the bid that they have not participated with other bidders to which they are related in any capacity. They must also declare that they are fully aware of the consequences of giving false information in the statement, which can lead to criminal procedures against the bidder [3]. The Law on Public Procurement only addresses collusion amongst bidders. Procurement officials undertake general training but it is unknown whether this also covers the identification of collusion.
Article 5 of the Law on Protection of Competition also addresses collusion between bidders only [2]. Article 7 prohibits collusion linked to limiting competition, fixing the purchasing and selling prices, restricting production, investing, sharing market share and more. Article 26 of the Law on Protection of Competition establishes the Commission on Protection of Competition as an independent state body whose main is to ensure competition is maintained.

The Procurement Commission advises the cancellation of procurement procedures if preconditions of Article 101 are fulfilled, in details elaborated in articles 114 and 79 [1].

The Law on Public Procurement specifies that “if lies are found after submitting the statements of independence, the procurement officials are obliged to immediately notify the competent authorities” (Article 129-4) [1]. In this case, since statements of independence are submitted under oath, the Commission on Protection of Competition immediately initiates a trial for misconduct (Article 32). For more serious crimes, such as limiting the competition, the Commission can trigger an administrative procedure within the relevant courts (article 48). Debarment is also possible in the case of a big being made outside of the regulations stipulated in the Law on Public Procurement (Article 220).

According to its 2016 report, the Commission on the Protection of Competition has triggered forty-administrative procedures; 31 against collusions/concentrations; and 13 against the control of state support. The Commission has also initiated seven trials for misconduct and implemented fines amounting to 18.234.936 MKD [1]. There is no public information addressing undue political influence.

The Law on Public Procurement only addresses collusion amongst bidders. Procurement officials undertake general training but it is unknown whether this also covers the identification of collusion.

The Competition Act prohibits collusion and agreements between enterprises (foretak) [1]. The act refers to forms of collusion both between bidders and between a public authority and a bidder.

Chapter 3 §10 of the Competition Act specifies forms of illegal collusion. These include setting bidding prices or any other substantive transaction conditions; limiting or controlling production, sale, innovation and investments; dividing markets or supply sources; applying different conditions to the bidders and putting them in an unfavourable position; and granting contracts under condition of approval of additional (not related to the content of the contract) services by the bidders [1]. The Norwegian Competition Authority is an independent regulatory agency which aims to ensure well-functioning markets for the benefit of consumers and of society in general [1]. Its guidelines focus especially on collusion between bidders, which it describes as one of the most serious forms of economic criminality [2]. It has issued a leaflet and a checklist to help public procurement officials prevent and recognise collusion in bidding processes [3, 4]. Breach of the Competition Act is punishable by fines or imprisonment of up to 3 years. This is extended to up to 6 years for particularly serious cases [1]. As an earlier case of Uniteam AS shows, procurement officials can exclude companies based on reasonable evidence, before a conviction takes place [5]. The Ministry of Defence blacklisted Uniteam AS (a Norwegian company supplying the Norwegian Armed Forces with container solutions) in 2007 although the first sentence came in 2011 and the final conviction was announced in 2012 [6].

The Norwegian Competition Authority is tasked with enforcing the Norwegian Competition Act through adopting decisions imposing administrative fines. The Norwegian Competition Authority’s decisions may be appealed to the Norwegian Competition Tribunal [1]. The Norwegian Competition Authority collaborates in this regard with the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) [2]. There has been no evidence of cases of collusion, or of suspected collusion within the defence sector, in recent years [3], as such this indicator is scored ‘Not Applicable’.

Training, comprising both e-learning and in-person seminars, is mandatory for project managers. Although it is not mandatory to take the exams that follow the training, the title of “Project Manager in the Military” can only be earned by successfully passing the course exams. The course covers the entire cycle of the PRINSIX project management system including formal requirements related to public procurement. It is therefore reasonable to expect that regulation on illegal collusion is a part of the training [1, 2]. According to a source from the Norwegian Defence Material Agency there is, however, little experience of that issue within the defence sector, as the Norwegian Competition Authority normally deals with incidents of illegal collusion [3]. To conclude, it is not clear whether people of other ranks/roles who work in procurement receive training in identifying collusion patterns, as this is the only thing made public by the military.

There is no legislation addressing collusion between bidders for defence and security contractors; general anti-corruption legislation; however, does account for public officials abuse of positions of power including acceptance of gifts for favours (1), (2). This legislation (RD 112/2011) is not specific to the defence sector, and it is not clear if it includes the defence or security sectors considering both are exempt in many instances (1). Neither Omanuna e-government portal or the Ministry of Defence website highlight relevant legislation addressing private sector rivalries and collusion relating to bids for defence and security contracts (3), (4). Although there is some relevant legislation, it does not address the defence sector or rival bidders collusion.

This indicator has been marked Not Applicable because there is no legislation addressing collusion in the defence sector.

Procurement personnel have no authority to exclude companies or individuals implicated in corruption cases. Additionally, other sources indicate that no company that has previously been excluded as the result of a corruption case (1), (2).

This indicator has been marked Not Applicable because there is no legislation addressing collusion in the defence sector.

According to a senior auditor within the MoD, there is a general lack of transparency when it comes to procurement and bidders collision. There is no legal framework discouraging and punishing collusion between bidders (1). Therefore, even in cases where there is evidence of corruption, there is a complete failure to investigate or prosecute offenders (1), (2).

There is no evidence that training is provided to procurement officials with regards to collusion (1,2).

There is no legislation specific to the security/national forces sector, but there is broader legislation that addresses collusion between bidders and officials (1). The intelligence agency follows the same legal framework as mentioned previously. The legal framework does not mention the relationship between the bidders themselves, instead, it deals with regulations concerning the relationship between the bidders and the officials/institutions. Resolution number 4 for the year 2007 which is related to the system of procurement for the Palestinian intelligence sector explains the process of bids and competition however, there are no clear instructions regarding the punishment for collusion between bidders on defence and security contracts (2).

There is clear legislation (1) and implementation guidelines empowering procurement officials to exclude companies that do not meet the guidelines and requirements stated within the competition (according to the law in the sources) (1). These guidelines usually include corruption convictions among other punishments. However, the range of sanctions available is limited to debarment and in some cases paying fines (according to a senior official within the MoF).

Cases are nominally investigated but are not often pursued to prosecution (1). This legislation is only to regulate the relationship between bidders and the institutions and not between the bidders themselves. There is clear interference by political powers in the decision-making process as essential companies; suppliers have close relations with the ruling party Fatah or the intimate executive circles (2).

There is no evidence that procurement officials receive training on collusion.

The Government Procurement Reform Act (RA 9184) [1] (which also applies to the defence and security sector), its revised implementing rules and regulations [2] and the Anti-Graft and Corrupt Practices Act (RA 3019) [3] prohibit collusion between a public officer and a bidder or between bidders.

Article XXI of the revised IRR of RA 9184 empowers procurement officials to exclude companies and senior officials where there is a conviction or reasonable evidence of bribery and corruption related offences [1]. An offence can result in imprisonment of between six and 15 years and permanent disqualification from transacting business with the government and prosecution [1].

Cases are investigated but, even if they are found guilty, defendants are not always punished and in some cases are even promoted [1] and continue to serve on tender boards [2]. Investigating courts have likewise diverged in their findings [3, 4, 5]. For instance, the Court of Appeals modified the resolution of the Office of the Ombudsman to dismiss eight Philippine Coast Guard (PCG) officers to suspension after failing to follow procurement rules for rescue equipment and other services worth P125 million [2, 3]. In another case, still against officers of the PCG, the Office of the Ombudsman withdrew the charges because the Court of Appeals has already cleared the accused in their twin administrative charges [5].

Through its Technical Support Office, the GPPB has established a training programme to develop the capacity of procurement officials to address and resolve procurement issues and concerns [1]. This training must be completed within six months of designation. However, despite this undertaking programme, procurement officials often fail to recognise malpractice and some even become involved in it. External auditors of a housing programme for military and police personnel discovered that procurement officials had not properly evaluated contractors, meaning that contracts had been awarded to companies that should not have qualified in the first place [2].

Collusion among bidders is prohibited by the Competition and Consumer Protection Act (Article 6, paragraph 1, point 7) [1]. Collusion between bidder(s) and official(s) is subject to criminal liability due to Article 305 of the Criminal Code [2].
The Public Procurement Law also contains a direct reference to exclude a contractor (Article 20 and Article 24 section 1, item 13) concerning a conviction for collusion to obtain property or a personal advantage [3].

Article 305 of the Penal Code contains provisions on the unlawful obstruction of a public tender, including the collusion of contractors. The perpetrator is subject to the penalty of imprisonment for up to three years, and a fine may be imposed [1]. The Public Procurement Law also contains a direct reference to exclude a contractor (Article 20 and Article 24, section 1, item 13) concerning a conviction for collusion to obtain property or personal advantage [2]. It is important to note that a provision for excluding bidders in cases where there is evidence of bribery or collusion is included in the EU procurement directive. However, it has not been incorporated into Polish public procurement legislation.

There are several cases of investigations and prosecutions through formal processes. For example, an indictment (criminal case) against three individuals regarding the collusion between bidders for the protection of objects at the 22nd Tactical Air Base [1]. Another minor case was the detection by the Office of Competition and Customer Protection (UOKiK) of collusion between bidders in a tender for seasonal boiler room service. UOKiK imposed a fine on three entrepreneurs [2]. The assessor did not find publicly available evidence of third-party interference in investigations.

There is no regular training regarding the identification of tender collusion [1].

The decree-law that regulates defence procurement defers to the Public Procurement Code and binds both buyers and bidders. The Public Procurement Code is supported by penal legislation on matters of corruption [1]. While officials are bound by this legislative framework, bidders are required not to have been found guilty of corruption, which includes collusion. Collusion is monitored by the Competition Authority and regulated by a separate bill in which collusion is defined as pertaining to bidders only.[2]. Neither this law nor the Public Procurement Code explicitly prohibit collusion in procurement. Military personnel are also bound by the Military Justice Code, which specifies particular clauses concerning corruption [3].

The Public Procurement Code explicitly excludes bidders convicted for corruption from procurement [1], but bidders accused or implicated in corruption or collusion are not excluded. Sanctions related to collusion are limited to fines [2].

At least two high-profile criminal investigations involving procurement have emerged recently [1], and one involves the Portuguese Air Force [2]. There is no evidence that undue influence derails investigations, although the justice system is slow to process cases.

There is evidence that at least some training is provided to officials [1] [2], but training on collusion is not mandatary across public administration and there is no evidence that training is offered extensively to all public workers, including in defence institutions.

There are very limited guidelines that deal with defence procurement in general. These guidelines and internal policies do not address collusion in defence procurement between bidders, but there are guidelines about collusion with the Ministry of Defence or the armed forces. [1,2]

This sub-indicator has been marked as Not Applicable, as with the lack of a legal framework discouraging and punishing collusion between bidders, assessing its sanctions is irrelevant in this context. [1,2]

This sub-indicator has been marked as Not Applicable, as with the lack of a legal framework discouraging and punishing collusion between bidders, assessing its sanctions is irrelevant in this context. [1,2]

There is no evidence that procurement officials receive training on identifying collusion in bidding practices [1,2].

Collusion between bidders (regardless of the sphere of activity) is prohibited under Article 14.32 of the Administrative Code ‘On collusion that limits competition’ [1], Article 178 of the Criminal Code ‘On Limitation of Competition’ [2], and Articles 11 and 17 of Federal Law No. 135 ‘On Protection of Competition’ [3]. In these documents, collusion is defined as an agreement between economic entities (in the Administrative Code) and economic entities-competitors (in the Criminal Code). The Federal Law ‘On Protection of Competition’ defines collusion as being between an official and a bidder.

Article 14.32 of the Administrative Code stipulates fines for economic entities that have initiated or participated in collusion [1]. Article 178 of the Criminal Code stipulates fines, compulsory labour and imprisonment [2]. According to Federal Law No. 135 ‘On Protection of Competition’, collusion is punishable by the annulment of tenders [3].

Also, Article 31 of Federal Law No. 44 ‘On the Contract System for the Procurement of Goods, Work and Services to Meet State and Municipal Needs’ requires tender boards to exclude from the tender companies whose senior officials have been convicted for economic crimes or bribery or have been convicted for corporate corruption [4]. Reasonable evidence of corruption (without a formal conviction) is not a legal requirement for exclusion.

The Federal Antimonopoly Service is independent from military stakeholders in decision-making and quite active in investigating cases of collusion between bidders in defence procurement [1,2,3]. There has also been a case of the FAS accusing the MoD of violating competition rules [4]. For cases in which collusion was evident, no evidence of impunity was found. However, there is no way to check whether and how effectively the FAS or any other agency investigates collusion in tenders for secret items.

There is no evidence indicating that the MoD requires or provides its employees with training to identify collusion in procurement [1].

According to our sources, there is an internal policy that is attached to every contract (bidders dossier) which every bidder has to submit before bidding. No legislation in Saudi Arabia addresses collusion specifically in the defence sector. In cases where there are no clear regulations, the financial department refers to the Competition Law (Civil) under certain circumstances (1), (2). The country’s Competition Law, issued under the Royal Decree No. (M/25) in 2004 and amended in 2014, does prohibit collusion and complicity in tenders, including through market allocation. The law also established the Competition Protection Council, a governing authority promoting fair trade practices for non-state-owned enterprises (3). The council was renamed as the General Authority for Competition (GAC) in December 2017. However, there is no reference to defence procurement specifically within the Competition Law, neither does the GAC’s mandate appear to extend to private companies operating in the defence sector. The GAC has the discretion to exempt certain prohibitions within the law, for example when practices and agreements in violation of the law are “deemed to improve efficiency and realize benefits to consumers which outweigh their anti-competitive effect.” The GAC reserves the right to make other exemptions to firms that meet its criteria. Given that defence procurement is exempted from the Government Bids and Procurement Law of 2006 (4), it may in practice also be exempted from the competition law.

Sources report, the procurement officials have no authority to exclude any company. Excluding any company needs approval from a committee of procurement or tender boards. In the last five years, there has been only one case of exclusion, and it was politically motivated (1), (2). The GAC can impose sanctions on companies found to have violated the Competition Law, including fines of USD 1.3 million and above, or a fine of up to 10% of the company’s turnover under the new amendment of 2014 (3). The GAC can also temporarily or permanently suspend the operations of the violating firm (4). However, as aforementioned, these laws make no specific reference to the defence sector, and it is likely that firms operating in this industry fall outside of the purview of the GAC. There is no evidence of legislation empowering procurement officials to exclude certain companies or individuals found to have committed wrongdoing. It is unlikely that this specific legislation exists given that defence procurement processes are not addressed at all in the Saudi Competition Law.

According to our sources, superficial hearings and investigations occur with companies that break the law. However, due to political pressure and interference by senior figures, these investigations may cease altogether, or companies are only fined (1), (2). There are no known cases of defence companies being implicated on collusion offences within Saudi Arabia. The GAC (under its former name, the Competition Protection Council) has investigated companies found to be involved in collusion and price-fixing, though these companies were medical and consumer goods firms and unrelated to the defence sector (3). Furthermore, publicly available information is limited regarding the investigations of these companies or the penalties, if any, they received. Given the sensitive and secretive nature of processes surrounding the defence industry in general in Saudi Arabia, it is unlikely that cases involving collusion among competing bidders in the defence sector would be made public, or that the aforementioned procedures set out in the Competition Law would be followed.

There is no training provided to procurement officials with regards to collusion (1).

The Law on Protection of Competition applies to state authorities, public and private companies and other natural and legal entities and associations [1]. The law prohibits restrictive agreements, defined as “agreements between undertakings which as their purpose or effect have a significant restriction, distortion, or prevention of competition in the territory of the Republic of Serbia” [2]. These agreements also encompass tacit agreements and concerted practices which directly or indirectly set prices or enable market sharing [2].
The Public Procurement Law (PPL) describes securing competition as one of its core principles [3]. In the process of bidding, the participating companies are required to submit declarations that their bids were prepared independently i.e. without consultations with other companies or interested parties [4]. If the contracting authority suspects possible collusion among bidders, it is obliged to immediately report this to the Commission for Protection of Competition (CPC) [5]. This is an independent body, which is accountable for its work to the National Assembly [6]. The handbook for taking the exam for public procurement officer’s certificate covers these legislative provisions and refers to the CPC’s instruction for identifying rigged tenders [7]. Collusion between contracting authorities and bidders is explicitly prohibited in the PPL [8].

A ʻrestrictive agreementʼ is a criminal offence in Serbian legislation, sanctioned with imprisonment (6 months to 5 years) and fines [1]. The same prison sentence is foreseen for criminal offence ʻabuse in relation to public procurementʼ, which includes collusion among bidders. If the procurement value is higher than 150 million dinars, the maximum prison sentence is ten years [1]. Apart from criminal prosecution, companies involved in the restrictive agreement are to be sanctioned by the CPC with a fine amounting up to 10% of the company’s annual revenues [2].
The PPL prescribes that contracting authorities can reject a bid if they possess evidence that the bidder had in the previous three years violated prohibition of 1) cooperating with a contracting authority in tender preparation or 2) hiring or in any way providing a paid engagement for a former employee of a contracting authority or related persons (please refer to Question 65) [3]. Furthermore, a fine is declared in this law for hiring subcontractors which were not mentioned in the bid and procurement contract [4].

The Commission for Protection of Competition (CPC) has occasionally investigated possible collusion of bidders participating in the MoD’s tenders. In 2015, the CPC concluded a proceeding against three companies that were found to have colluded during the MoD’s uniform procurement in 2013. The companies were fined amounts equaling to 5-6% of their annual revenues and forbidden from bidding in public procurement for 18 months [1]. In 2017, the CPC initiated a proceeding against bidders in a tender for hygiene products that had been implemented in 2016. Five companies are suspected of having prices and “other conditions of trade” during the tendering. One company was in the meantime acquitted, while the proceeding was still ongoing against the remaining four in early 2018 [2]. There is no evidence of undue political influence. In its 2018 Serbia report, the European Commission positively appraised the overall work of the CPC, noting that the number of antitrust cases and the relative size and significance of companies under investigation had increased [3].

The handbook for taking the exam for public procurement officer’s certificate covers the legislative provisions on preventing collusion and refers to the CPC’s instruction for identifying rigged tenders [1].

Article 35 of the Competition Act prohibits “agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition”. [1]. That general prohibition of anti-competitive agreement includes also bid rigging (collusion) which may be investigated and prosecuted by the Competition and Consumer Commission of Singapore (“CCCS”). [2].
The legal term of anti-competitive agreement does not include collusion between an official and one bidder only, however includes collusion among two or more bidders with participation of public official.

There are clear policies in place that enable government procurement officers to exclude companies or company officials that have been convicted and/or suspected of bribery and corruption related offences [1, 2, 3]. These sanctions have been consistently exercised resulting in errant contractors being fined or given prison terms, with legal action being well-reported [4].

Cases are investigated via a robust set of internal audits as well as an independent auditor that has proven to be free from political influence [1, 2]. It is worth noting that while cases have been investigated and individuals/or companies have been charged and imprisoned/fined, state-linked companies such as ST Engineering continue to win defence contracts [3].

The MINDEF provides anti-corruption training and has emphasised that all personnel must adhere to civil service standards [1]. However, there is no evidence of specific anti-collusion training for procurement officials.

The following text is included as part of the Certificate of Independent Bid Determination (Standard Bidding Document 9) [1], it is included in every tender proposal and requires bidders to sign a declaration that they have not engaged in any collusive activity regarding the tender or bid.

“Section 4 (1) (b) (iii) of the Competition Act 89 of 1998, as amended, prohibits an agreement between, or concerted practice by, firms, or a decision by an association of firms, if it is between parties in a horizontal relationship and if it involves collusive bidding (or bid rigging). Collusive bidding is a pe se prohibition meaning that it cannot
be justified under any grounds” [2].

Section 13 of the Prevention and Combating of Corrupt Activities Act 12 of 2004 makes it an offence for anyone to either accept or provide gratifications in order to influence a tender decision [3]. There are no specific laws dealing with the defence sector, instead, Department of Defence (DoD) policy documents like the Defence Acquisition Handbook (DAHB) 1000 defer to national laws and policies governing tenders [4]. It is unclear whether training of procurement officials is extended by the same policy process.

The Prevention and Combating of Corrupt Activities Act 12 of 2004 and Competition Act 89 of 1998 set out clear guidelines for remedies and enforcement, in the form of sanctions, fines, and referral for prosecution, in cases of legal or regulatory breaches [1].

Collusion between companies is investigated by the Competition Commission of South Africa [1], which can refer cases to the Competition Tribunal for prosecution, The tribunal is independent from executive pressure [2]. There is no evidence of political interference in the process. One clear example of the process, involving a defence contract, is the ongoing prosecution of two companies for alleged collusion in an IT contract [3].

The Competition Commission is able to identify collusion patterns and refer possible malpractice to the Competition Tribunal for investigation. These officials are not specifically trained in defence-focused collusion, but rather on collusion in general [1].

Article 4.2 of the Enforcement Decree of the Act on Contracts to which the State is a Party outlaws collusion between bidders. It states that a contracting officer should require each contractor to submit an integrity agreement, which prohibits any act hindering fair competition, such as a prior agreement on a tendering price and collusion between bidders. [1] Article 4 of the Enforcement Decree of the Defence Acquisition Programme Act also states that defence officers and contractors should agree a pledge of integrity, which outlaws unfair practices, such as revealing bid prices in advance and collusion for a successful bid by a specific person. [2]

The South Korean government restricts bidders who colluded to guarantee the selection of the designated winner or agreed on the tender price with other contractors in advance from participating in bidding for up to 2 years, according to Article 27 of the Act on Contracts to which the State is a Party. [1] In addition, procurement officials can terminate a contract with a supplier found to be corrupt by cancelling its qualification as a defence contractor under the terms of Article 48 of the Defence Acquisition Programme Act (see Q69). [2] The Defence Acquisition Programme Administration (DAPA) also imposes fines on bidders who violate defence law. [3]

Cases are investigated and prosecuted through formal processes, but prosecutions are not always successful. Based on analysis of the available information, ineffective prosecution is likely to be related to a loophole in the relevant law, rather than undue influence in the decision-making process. One of the cases related to the loophole in the law involves a corrupt firm’s participation in a military project in September 2019. The company with history of corruption participated in bidding for the military communications project. [1] The Korea Fair Trade Commission (KFTC) is responsible for handling cases related to unfair collective actions or anti-competitive practices between bidders and for punishing colluding bidders. [2] There is evidence of colluding companies facing punishment with fines. A media report shows that multiple energy companies providing gas for the military were caught making an agreement on the tender price collectively and were punished with fines in 2018. [3] While the KFTC can punish colluding bidders with measures, the bidders can participate in government bidding by delaying the lawsuit. In a recent case, 19 of the food suppliers for the military were charged with collusion and were banned from government bids for a certain period. However, they filed a lawsuit claiming that the KFTC’s bid restrictions were unfair because they are able to participate in bidding when the lawsuit is in progress. [4]

Procurement officials are supported by legislation and specific guidelines to identify collusion patterns and report potential malpractice. According to Article 32 of the Act on Contracts to which the State is a Party, the government can provide relevant training to procurement officials to improve their technical competencies. [1] With regards to this, the Guidelines for Fair Bidding in Defence Procurement specify types of bidding collusion and guidelines for punishing colluding bidders for procurement officials. [2] Also, the DAPA provides internal anti-corruption training to help procurement officials to identify collusion patterns at least six times a year. [3]

Laws are in place to prevent collusion between bidders and those awarding tender. The procurement act spells out a code of conduct for members in the procuring entity that obliges them to declare any conflict of interest [1]. It also spells out consequences for breaching the code of conduct [2]. Section 65 prohibits collusion by spelling out that “no negotiations shall take place between the Procuring Entity and a bidder with respect to each Bidder’s bid, except otherwise as provided in this Act.” [3].

The legislation is clear. Bidders accused of exerting undue influence on officials can be penalized by law. Disbarment periods are unspecified but will be decided on a “case by case basis” [1]. Furthermore, offenders (both individual and corporate) convicted of corruption/collusion will be fined, anything ranging from $10,000 to $20,000. Individuals face up to three years in jail [2].

There is no publicly available information to grade this indicator; as such it is marked ‘Not Enough Information’. While the procurement act spells out a code of conduct for members in the procuring entity that obliges them to declare any conflict of interest [1] as well as consequences for breaching the code of conduct [2], there is no evidence so far in the public domain that shows authorities investigating corrupt activity in the contract tendering processes of the government [3].

There is no publicly available information to grade this indicator; as such it is marked ‘Not Enough Information’. Sources contacted for information have not been forthcoming. The procurement act obliges the Procurement Authority to engage in “capacity building” for procurement staff [1], which could potentially mean training on collusion patterns.

The sanction of the distortion of competition in public tenders in Spain is not only limited to the administrative field of competition but may constitute a criminal offence in accordance with Article 262 of the Penal Code: “they will be punished with a prison sentence of one to three years and a fine of 12 to 24 months, as well as special disqualification from bidding in judicial auctions between three and five years” [1].

As confirmed by the Ministry of Defence [2], practices of collusion are expressly regulated in Article 150.1 of the Law 9/2017 of contracts in the public sector, which states that if in the exercise of its functions, the contracting board or body have well-founded indications of collusive conduct in the contracting procedure, they will transfer them prior to the award of the contract to the National Commission of Markets and Competition [3]. This Article defines collusion as per what is stated in Article 1 of Law 15/2007, which indeed prohibits “any collective agreement, decision or recommendation, or concerted or consciously parallel practice, which has as its object, produces or may produce the effect of preventing, restricting or distorting competition in all or part of the national market and, in particular, those consisting of”, and lists a number of cases which may be interpreted as involving collusion between an official and a bidder as well as between bidders [4].

Article 12 of Law 24/2011 prohibits contracts with people who have been formally convicted of different crimes or formally sanctioned as a consequence of a major infraction of professional duties. This includes, among others, illegal financing of political parties, corruption in business, influence peddling, bribery, fraud, crimes against the Public Treasury and Social Security, prevarication, embezzlement, prohibited negotiations for officials, money laundering, crimes related to spatial planning and urban planning, etc. [1]. However, a significant number of contracts may be excluded from Law 24/2011 as stated in Art. 7, and investigation and prosecution are not motives for exclusion, only conviction by final judicial decisions (“condenadas mediante sentencia firme”). There is no knowledge of any relevant military company being convicted and excluded from bidding [2]. Art. 71 of Law 9/2017 on Public Contracts deals with sanctions, limited to debarment [3]. Art. 5 of Law 9/2017 allows for the exclusion of contracts in the domain of defence and security covered by Law 24/2011.[3]

The National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC) has repeatedly said through a number of reports “the inclusion within the information contained in the specifications of the need for them to include a paragraph that briefly mentions the definition of what are considered anticompetitive practices, the applicable regulations, as well as the consequences that may arise from non-compliance”, in line with the OECD Council recommendation I.7 to combat collusion in public procurement of 17 July 2012 [4]. The CNMC has praised the incorporation of such a clause in certain contracts [4]. It has also recommended the inclusion of a declaration model where “the bidders expressly state their commitment not to participate or have participated in anti-competitive practices in the tender the apply, highlighting the consequences attributable in the event of non-compliance, especially the one relating to the prohibition of contracting with Public Administrations”, in line with the recommendation I.6 of the OECD Council [4].

This indicator is marked as ‘Not Applicable’ as no concrete cases of collusion investigated or prosecuted were found.The Additional Provision 23 of Royal Legislative Decree 3/2011, of 14 November, related to the Law of Contracts in the Public Sector, externalises to external entities the management of “practices contrary to free competition”: “The contracting bodies, the State Administrative Contracting Advisory Board and the competent bodies to resolve the special appeals referred to in Article 40 of this Law shall notify the National Competition Commission of any facts that they become aware of in the exercise of their functions that may constitute an infringement of the competition law. In particular, they will communicate any indication of collective agreement, decision or recommendation, or concerted or consciously parallel practice between the bidders, which has as its object, produces or may produce the effect of preventing, restricting or distorting competition in the contracting process” [1]. The National Commission on Markets and Competition has the authority to conduct investigations and impose sanctions, as per Article 27 and Article 29 of Law 3/2013 creating the commission [2]. According to Patricia Valcárcel, “the reason why this solution is unsuccessful lies in the fact that reality shows that when the competition bodies act in accordance with their timing and their course, the still sanctioning resolutions that may be imposed occur once the contract where the collusion takes place has been awarded and, in the best of cases, its execution is well advanced” [3]. She provided two recommendations that have so far been “under-used”: firstly, the inclusion of anti-collusion clauses in the specifications of particular administrative clauses and, secondly, the participation of experts in Competition Law in the contracting decision-making [3].

When asked about the number of cases of sanctions on companies and/or exclusion from future contracts as a consequence of contract violations, corrupt practices, or measures that affect free competition (such as collusion) in recent years, the official response by a representative of the Ministry of Defence did not answer the question, and provided no further information on the subject [4]. When asked through the Portal of Transparency about the number of sanctions for companies, including exclusions for future contracts, related to corruption practices or collusion in the last three years, the Ministry of Defence answered that “the requested information is available” in the Official Registry of Bidders and Classified State Companies (ROLECE), in section “companies in a situation to contract”, with no further explanation [5]. However, on the ROLECE’s site, the information was not available [6, 7]. When asked, the spokesperson for ROLECE’s confirmed that the only information that a person could get about contracting bodies was to check whether a specific firm’s name was in the list of companies that can be contracted. This was without access to any other information, including whether that company was not listed because it had not been registered or because of a prohibition to contracting. Additionally, no information will ever be provided on the reasons why a company is prohibited of being contracted [8].

When questions on the number and type of judicial cases directly related to corruption involving the Ministry of Defence were submitted to the Ministry of Justice through the Spanish Portal of Transparency, the official answer was that “the required information refers to activities of judicial bodies that are not subject to Administrative Law, but subject to Procedural Law. Consequently, this Justice Transparency Information Unit considers that it incurs in the preceding exposition and resolves its inadmissibility as the provisions of the aforementioned Law are not applicable to activities subject to Procedural Law,” and referred to statistical data from the General Council of the Judiciary or the National Institute of Statistics [9]. However, the information requested could not be found on these sites. Overall, no concrete cases of collusion investigated or prosecuted were found in this research.

When asked about the type of specific training that procurement officers receive to identify cases of collusion and to report potential malpractices, the answer by a representative of the Ministry of Defence was that these officers belong to the Intendance Corps of the Spanish Navy and the Spanish Army, their training established through the respective study plans, and also that there are perfection courses on procurement. However, even when this information was specifically requested, no details and no references about whether or not the course is mandatory nor how often they are provided was given. The question was refused when that information was requested [1]. No evidence has been found about specific training on collusion.

In 2014, the Court of Audits questioned the repeated request for assistance that the Intelligence National Centre (Centro Nacional de Inteligencia) (CNI) made to the same winning firm (always the same one) and recommended training the CNI’s own staff “for reasons of economy and efficiency”. In its subsequent allegations, the CNI considered the possibility of permanent training for its workers but referred to the existing difficulties “due to the lack of its own resources” [2].

The assessor was only able to find one version of Sudan’s Public Procurement, Contracting and Disposal of Assets Act of 2010 on the internet [1], but the Arabic language document concludes at the end of Chapter 9, failing to expand upon the topics listed in the table of contents for Chapters 10-15, which include: Chapter 11 – ‘Banned Acts’: 54 – ‘Fraud and Corruption’, 55 – ‘Actions affecting the public servant’, 56 – ‘Employee behaviour and interest disclosure’ and 57 – ‘Establishment of criminal procedures’ [1]. It is unclear whether these final chapters were ever completed. Given the uncertainty around the contents of the procurement legislation, this indicator cannot be scored and is marked ‘Not Enough Information’.

As noted in 66A, Sudan’s procurement legislation is unclear and it is not possible to award a score on this basis. As such, this indicator is marked ‘Not Enough Information’. The assessor was only able to find one version of Sudan’s Public Procurement, Contracting and Disposal of Assets Act of 2010 on the internet [1], but the Arabic language document concludes at the end of Chapter 9, failing to expand upon the topics listed in the table of contents for Chapters 10-15, which include: Chapter 11 – ‘Banned Acts’: 54 – ‘Fraud and Corruption’, 55 – ‘Actions affecting the public servant’, 56 – ‘Employee behaviour and interest disclosure’ and 57 – ‘Establishment of criminal procedures’ [1]. It is unclear whether these final chapters were ever completed. Therefore, there is no basis on which the Legal Framework for this indicator can be scored and it is marked ‘Not Enough Information’.

During phone interviews, two experts on Sudan’s defence sector verified that there is a complete failure to investigate or prosecute cases of corruption in the defence sector [1,2]. One of these experts emphasised that what Transparency International considers ‘corruption’ is not considered as such in Sudan, where it is simply the way things get done. He acknowledged that the government does, however, set standards of transparency for itself (on paper and in proclamations that especially target international audiences) that do not reflect the pervasive and widely accepted opacity of procurement processes in the defence sector [1].

A thorough internet search and interviews with two experts on Sudan’s defence sector [1,2] yielded no evidence that individuals who implement procurement in the defence sector are provided with training.

Chapter 2 of the Law on Competition, which also applies to the defence industry, clearly prohibits collusion, but only between bidders [1]. As noted in Q63 and Q64, critical scholars [2] and opposition MPs [3] have noted that major arms producers – particularly companies like Saab who have a long history of supplying armaments to the Swedish Armed Forces (SAF) – benefit from an unjustifiably strong competitive advantage and a ‘family-like’ relationship [4] with the Swedish state which may resemble collusion.

The Law on Competition [1] and the Act on Defence and Sensitive Security Procurement [2] enable officials to exclude companies where there is a conviction or reasonable evidence of collusion and other corruption related offences. Furthemore, in line with the Penal Code [3], an offence can result in prosecution, debarment from current and future competitions, and other sanctions such as fines or imprisonment (see also Q69).

Collusion cases, although seemingly very rare [1], are investigated or prosecuted through the formal processeses set out in the Penal Code [2]. The Swedish Competition Authority has noted no cases of third-party interference, such as undue political influence, during the studied time period [3].

Swedish Defence Materiel Administration Agency (FMV) officials are subject to regulations and codes of conduct designed to prevent corruption. Procurement officials undergo some training and are subject to ‘internal regulations’ that do not address collusion explicitly, but only issues related to corruption such as ‘conflicts of interest, additional employment, shareholding, travel, and representation’ [1]. FMV staff are also expected to comply with the agency’s brief statement on ‘Ethics and social responsibility’ which, again, relates to anti-corruption but does not mention collusion explicitly [2].

Swiss law does not use the term collusion but prohibits such competition distorting acts. Article 4 of the Cartel Act (CartA) defines “Agreements affecting competition” as “binding or non-binding agreements and concerted practices between undertakings […] which have a restraint of competition as their object or effect.” The CartA does generally also apply to the defence sector. Chapter 6 of CartA provides administrative sanctions and Chapter 8 criminal sanctions [1]. Article 5 of the Unfair Competition Act (Bundesgesetz gegen den Unlauteren Wettbewerb) (UWG) prohibits the use of information from third parties if known that they were obtained illicitly or under the condition of secrecy in order to gain an advantage [2]. While CartA and the Federal Act on Public Procurement do not explicitly reference collusion between bidders and officials, it is implicitly prohibited by sections againt concluded agreements that eliminate or significantly restrict effective competition [3].

The website of the Beschaffungskonferenz des Bundes (BKB) has a section on corruption prevention and emphasizes its importance [1]. It highlights the creation of the Interdepartementale Arbeitsgruppe Korruptionsbekämpfung (IDAG), the IDAGs report 2014-2017 [2]. The revised law that came into force 1 January 2020 is more explicit on the issue of corruption [3, 4]. In addition, Title 19 Article 322 of the Swiss Criminal Code concerns bribery and explicitly includes members of the armed forces. It foresees penalties for active and passive bribery of Swiss government with financial penalties or imprisonment of up to five years [5]. The military’s penal code contains corruption specific rules on active and passive bribery as well as on unfaithful business management (Section 9) [6]. Both CartA and the Federal Act on Public Procurement include sanctions such as fines and exclusion from bidding process [4, 7].

Switzerland has an independent judiciary. It ranks eighth out of 137 countries for judicial independence in the World Economic Forum’s Global Competitiveness Index [1]. The Competition Commission has information on its website about current cases that are prosecuted, and it reports annually on its work [2]. However, this has been scored ‘Not Applicable’ as a search of the Competition Commission’s website and media sources has not yielded any defence related cases recently.

No direct evidence for specific training offers dedicated to the detection of collusion patterns could be found. However, the ability to identify problematic patterns is likely to be part of the training of procurement officers within more general training modules and should be part of their core competencies [1]. The compliance brochure from the Group “Defence,” which links to an internal training module on compliance, mentions explicitly the issue of collusion (price-fixing and collusion on capacities) [2]. On its site on corruption prevention, Armasuisse mentions competition distorting collusion explicitly [3]. Therefore it is likely that the training for procurement officers does cover the recognition of illegal collusion patterns. The recently published directive by the Federal Department, Civil Protection and Sport (DDPS) on combating corruption also emphasizes training [4] and Armasuisse has created an expert unit that is charged with making sure employees get adequate training [5]. The assessor did not recieve a response from the DDPS when questions were asked regarding training.

The legal framework for counter-measures against collusion between bidders can be found in the “Government Procurement Act”, “Enforcement Rules of the Government Procurement Act”, “Regulations for Coverage and Handling of Special Military Procurement”, and the “Anti-corruption Act”, which clearly legislates against collusion between bidders and officials [1, 2, 3, 4].

Clear legislation and implementing guidelines within the “Government Procurement Act” and “Anti-corruption Act” empower procurement officials to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery and corruption related offences [1, 2]. An offence can result in prosecution or debarment from current and future competitions amongst other sanctions, including heavy fines or imprisonment in accordance with the “Anti-corruption Act” and the “Enforcement Rules of the Government Procurement Act” [2, 3]. Despite this, collusion between bidders is still an issue of concern and even a problem for the Ministry of National Defence and its subordinate institutions [4].

Cases are investigated or prosecuted through formal processes and without third-party interference in accordance with the “Anti-corruption Act”, “Government Procurement Act”, and the “Audit Act” [1, 2, 3]. The MND has improved the procurement procedure and added a self-check column of substantial and unusual connection among different tenderers when reviewing tender documents on July 2nd, 2018. [6]

In addition to judicial systems, the CY has counter-measures on the issue of collusion between bidders for defence contracts [4]. However, there are cases where the Ministry of National Defence and its subordinates do not meet requirements established by both the CY and the National Audit Office [5]. Such cases have proven to be flaws [5].

General training for procurement officials is required by the “Enforcement Rules of the Government Procurement Act”[1]. Ethics, integrity and pricurement malpractices form part of the training offered through the ‘Procurement Professional Qualification Examination, Training, Certification and Management Measures’ [2]. In 2019, the MND provided procurement and integrity training for 1,320 procurement officials.

The Public Procurement Act 2011, Section 83(2) explicitly addresses collusive practices in bidding for public contracts. When read in its totality, the Act covers collusive practices between bidders, as well as collusion with officers of the tendering body. [1]

The Public Procurement Act 2011, Section 83(2)b allows for firms found to be involved in collusive practices by the Public Procurement Regulatory Authority as well as individual directors to be banned from public tenders for 10 years. Individuals face a jail term of up to seven years if involved directly, or three years if obstructing investigations under Section 104(1). [1]

The Annual Performance Evaluation Reports of the Public Procurement Regulatory Authority, which is the primary investigating agency, conducts assessments of the likelihood of corruption in procurement entities, and submits cases to the Prevention and Combating of Corruption Bureau for further investigation. There has been no mention of any assessment involving security organs in reports available since 2016. [1]

The Annual Performance Evaluation Reports of the Public Procurement Regulatory Authority do not mention collusion at all. While they give training in the Public Procurement Act and tendering tools to officials in Procurement Entities, this is not broken down by entity so we cannot know if such training has been given to defence and security organs, or not. [1] However, a Senior Official in the Ministry of National Defence confirmed that training is provided to procurement units in the Ministry of National Defence. [2]

In Thailand, collusion is an offence under the Act Governing Offences Concerning the Submission of Bids to State Agencies B.E. 2542 (1999), commonly known as the bid rigging law. It penalises various acts engaged in by government agencies, including state enterprises and individuals who hold political positions. Section 4 and Section 11 of the Act prohibit collusion between bidders as well as collusion between a bidder and officials in order to ensure one of the bidders wins [1]. Collusion in competitive bidding may also violate the Public Procurement and Supplies Management Act B.E. 2560 (2017), known as the procurement law [2,3]. The government also passed the Promulgation of the Government Procurement and Supplies Management Act, which applies to all government agencies, local authorities and state-owned enterprises (SOEs) and which prohibits collusion among bidders [4].

Government authorities have been focussing more on collusion in competitive bidding for government contracts due to the implementation of the new law, the Act Governing Offences Concerning the Submission of Bids to State Agencies B.E. 2542 (1999). To comply with the law, government officials must select an appropriate procurement method when it is suitable. The private-sector bidders must also act in good faith rather than just focussing on the sale of their products or services. If the offence is committed on behalf of a legal entity, the legal entity’s representative may also be jointly liable [1,2].

Recent 2015 amendments to the Anti-Corruption Act have broadened the scope of liability for wrongdoers. For example, corporate entities and senior management are now considered liable for bribery offences committed by employees, agents and others acting on behalf of the company where the act is for the benefit of the company and the company has failed to implement ‘proper internal measures’ to prevent the wrongdoing (Section 123/5) [3]. This is a move to prevent a previous loophole, by which bribery by a corporate entity was not generally prohibited unless it constituted a bid rigging violation in connection with a bid to a state agency under the Bid Rigging Act B.E. 2542 or was considered an unfair practice under the Trade Competition Act B.E. 2542 [4].

Nonetheless, according to the Anti-Corruption Act, offenders shall only be subject to imprisonment for a term not exceeding five years or to a fine not exceeding 100,000 baht or to both. Sanctions against companies are not mentioned [3].

According to the GAN Integrity Report 2017, there is a high risk of corruption in Thailand’s public procurement sector. Companies report that the diversion of public funds and favouritism in decisions of government officials are very common. Procurement fraud has occurred most frequently during quote and bid solicitations, vendor selection, vendor contracting and maintenance processes. There are also reports of bid rigging, where employees provide inside information or confidential pricing knowledge, leading to unfair competition [1].

The audit committees’ shortcomings and incompetence in monitoring and detecting irregularities in public procurement practices have led to the occurrence of fraud. In practice, the reports and decisions from these committees have been considered to only provide recommendations for the public procurement units. Further legal remedies have been authorised by the Administrative Court, however most bidders would hesitate to make a complaint due to the unreliability of the public procurement system, the subsequent conflicts with the relevant public procurement officers and the fact that the judgment procedures of legal remedies by the Administrative Court have been found to be complicated and lengthy [2].

In 2016, Isranews Agency revealed that Pathompol Chan-O-Cha, the son of General Preecha Chan-O-Cha, won the bid for construction projects worth a total of 26.8 million baht in the Third Region Army military base. There was a request for this case to be investigated by the NACC [3]. However, the investigation was suspended, along with other cases, due to a legal technicality, according to the NACC. Srisuwan Junya, a transparency activist, said the NACC never updated him on the complaint against Pathompol, or on any other of the numerous cases he had filed, for that matter [4]. Moreover, there has been a complete failure to investigate or prosecute cases, even in the face of clear evidence; the case of GT200 scandal was not effectively or adequately investigated, as some of the military and the officials from anti-corruption bodies defended the useless devices [5].

According to the Public Procurement and Supplies Administration Act B.E. 2560 (2017), Section 49, the Comptroller-General’s Department has the duty to determine and put in place training programmes for promoting and developing officials’ knowledge and expertise in relation to public procurement and supplies administration in accordance with professional principles and in accordance with this Act [1]. Nonetheless, the existing public procurement officers tend to lack specialist expertise and knowledge in public procurement process. Due to the inefficient and unproductive personnel in public procurement, there are difficulties in controlling and monitoring the public procurement process in order to achieve transparency and accountability.

The interviews with procurement experts in Kitivichaya Watcharothai’s study (2018) also revealed that human resources selection and development is a key weakness in public procurement operations, indicating a lack of training for procurement officials, which might include the area of collusive bidding [2]. Apparently, the government has conducted training for public procurement officers, such as the ‘Electronic Certificate in Public Procurement’, in order to increase officers’ expertise and transparency, but there is no specific focus on collusion issues in the training module [3].

A review of regulations applicable to the defence and security sector confirms the absence of specific provisions for collusion in defence and security. However, collusion between bidders is punished by Law No. 2015-36, of 15 September 2015, relating to the reorganisation of competition and price (1). Also, article 177 of Decree n°1039-2014, dated 13 March 2014, organising public procurement, imposes that the public purchaser cancels the tender if the bidder is convicted of malpractice such as collusion during the bidding process (2,3). According to our sources, collusion is usually managed in an informal way, and in different situations according to the context. The law only targest the bidders’ collusion but not with the security and defence organisations (4,5,6).

Article 177 of Decree n°1039-2014, dated 13 March 2014, organising public procurement, imposes that the public purchaser cancels the tender if the bidder is convicted of malpractice like collusion during the bidding process (1). Governmental Decree n° 2016-498, dated 8 April 2016, determining the conditions and procedures for excluding participation in public contracts, allows to exclude bidders temporarily or definitively from the participation in procurement in case of collusion (2).

According to our sources, there are many cases investigated relating to procurement and bidders collusion, however, many cases end up being solved in a gentlemans agreement or informally. Therefore, they are usually treated internally within the MoD procurement department(1,2,3).

As explained above, Chapter 3 of the Law on Public Procurement, which covers the Public Procurement Authority, Review of Complaints and Settlement of Disputes, clearly explains the role of the Public Procurement Authority (the internal executive auditing body attached to the Ministry of Treasury and Finance) during the implementation of and after the tenders [1].

Article 17 of this Law reads as follows:

Prohibited acts or conduct
Article 17 – The following acts or conduct are prohibited in tender proceedings:
a) conducting or attempting to conduct procurement fraud by means of fraudulent and corrupt acts, promises, threats, unlawful influence, undue interest, agreement, malversation, bribery or other actions,
b) causing confusion among tenderers, preventing participation, offering agreements to tenderers or encouraging tenderers to accept such offers, conducting actions that may influence competition or the tender decision,
c) forging documents or securities, using forged documents or securities or attempting this.
d) submitting more than one tender by a tenderer on his own account or on the behalf of others, directly or indirectly, as the principal person or as a representative of others, apart from where submitting alternative tenders is allowed [1].
As seen above, this article has clear regulations prohibiting collusion.

Furthermore, Articles 53, 54, 55, 56 and 57 in this chapter explain how complaints should be submitted, how disputes should be settled, how bidders can put a written appeal to the Public Procurement Authority and how they can initiate judicial processes if they cannot get what they want through administrative investigations [1]. These articles are clear and provide a good legislative background for a corrupt-free and high-integrity defence/security environment. However, according to Interviewees 4, 5 and 6, in practice, it is not so easy to implement these articles [2,3,4].

In cases of collusion in a bidding process, the claimant can proceed in accordance with the legislative mechanism presented above. As shown above, the legislation only regulates and prohibits collusion between the tenderer and the bidder but it does not regulate collusion between the bidder and the tender officials. This is a major gap within the legislation. In the case of collusion in a bidding process, the claimant can proceed in accordance with the legislative mechanism presented in 66A.

There are also acts prohibited in the Competition Act, [5] such as anti-competitive agreements, concerted practices and decisions (Article 4):
– Price fixing, market sharing, bid rigging, etc.
– Abuse of dominant positions (Article 6)
– Mergers and acquisitions that create or strengthen dominance and restrict competition significantly (Article 7)

Chapter 4 of the Law on Public Procurement, which regulates the Prohibitions and Criminal Liability in public procurement, is the primary legislative framework that enables the tender boards to exclude bidders with corruption and integrity problems [1]. Article 58 of this chapter, entitled ‘Prohibition From Participation in Tenders’, reads as follows:

‘Those who are found to be involved in the acts or conduct set forth in Article 17 shall be prohibited from participating in any tender carried out by all public institutions and authorities, including those specified in Article 2 and those listed in Article 3 of this Law, for at least one year and up to two years depending on the nature of the acts and conduct; and those who do not sign a contract in accordance with the procedures, except in cases of force majeure, even though the tender has been awarded to them, shall likewise be prohibited from participating in any tender for at least six months and up to one year. Prohibition decisions shall be made by the ministry implementing the contract or by the ministry which the contracting authority is subordinate to or associated with, by contracting officers of contracting authorities which are not considered subordinate to or associated with any ministry, and by the Ministry of Internal Affairs in special provincial administrations and in municipalities and in their affiliated associations, institutions and undertakings. If the legal persons who are subject to prohibition are sole proprietorships, the prohibition decisions shall apply to all of the partners, and in cases of companies with shared capital, the prohibition decisions shall apply to partners that are real or legal persons who own more than half of the capital in accordance with the provisions of Paragraph 1. The prohibition decisions shall be made at the latest within 45 days after the date on which the conduct or acts requiring prohibition were established. The prohibition decision shall be sent for publication in the Official Gazette within 15 days at most, and shall become effective on the date of its publication. The decisions shall be followed up by the Public Procurement Authority and those who are prohibited from participating in public procurements shall be recorded. The contracting authorities carrying out the tender proceedings shall be responsible for notifying the relevant or related ministry of any event requiring prohibition from participation’ [1].

According to Interviewee 3, claims and cases relating to tenders for major projects in defence/security are investigated superficially, or receive ‘show’ hearings in which defendants are usually not punished [1]. Interviewee 6 suggested that, during his more than 20 years of service in the military, he observed that, for those minor defence/security tenders, the procurement cycle, involving the processes of calls, implementation and internal/external auditing, is pretty clean in terms of corruption and integrity-related issues and that the internal oversight/scrutiny mechanisms, such as the Public Procurement Authority and the Financial Audit Department of the Ministry of Defence, are working effectively [2]. These suggestions show that it is not so easy to implement Article 17 of the Law on Public Procurement in cases of collusion in the defence/security sector.

It should also be noted that the Turkish Law on Public Procurement (Law No. 4734), enacted in 2003, makes it mandatory for all procuring government agencies to register the procurement outcomes with the Public Procurement Authority of Turkey (PPAT) [3]. There are no studies that examine collusion in Turkish PP auctions, although there is a comprehensive and rich data set officially available. Similar to many publicly available PP data sets, the PPAT data set lacks information about all submitted bids. Instead, it contains variables about the auction outcomes, such as the winning bid and number of bidders [4].

Interviewee 4 suggested that procurement officials are occasionally trained to identify collusion patterns and report potential malpractice. He emphasised that there are courses at the Finance School about this issue, but these courses do not cover all issues of collusion [1]. Interviewee 6 suggested that all personnel taking part in tender boards are trained in September and October every year in order to update their knowledge about the procurement cycles. However, he notes that anti-corruption and integrity-related issues, as well as how to manage collusion patterns and how to report malpractices, are not among the prioritised issues. He said that, in practice, the only viable action of a tender board member is to report the case with a written appeal to the board and just resign, meaning they distance themselves from the tender process to keep their records/career clean, but it is not hard for the tender boards to find another member [2].

Section 95, (1a)[2] states that an Accounting Officer, a member of the Contracts Committee, a member of the evaluation committee, an employee of the Authority or of a procuring and disposing entity, who— (a) connives or colludes to commit a corrupt practice or a fraudulent practice during a procurement or disposal process; (b) engages in a corrupt practice or a fraudulent practice during a procurement or disposal process, commits an offence and is liable on conviction to a fine not less than two hundred and fifty currency points but not exceeding one thousand currency points or to imprisonment not exceeding five years, or both. However, there is no specific mention of collusion between bidders. It is also not clear whether anti-corruption training is given to procurement officials.

Section 94 of the PPDA Act (2003) [1] provides for the suspension of providers. It states:
“that the Authority may on the recommendation of a procuring and disposing entity or after investigations on its own initiative, suspend a provider from engaging in any public procurement or disposal process for a period determined by the Authority, where—
(a) the provider breaches the Code of Ethics of providers;
(b) the provider is debarred from the procurement processes of an international agency of which Uganda is a member” [1].

There is limited evidence of cases being investigated or prosecuted regarding collusion in procurement. In 2020, the Public Procurement and Disposal Authority (PPDA) received recommendations from different entities under the local and central government to suspend different companies from participating in public procurement and disposal of public assets proceedings for submitting various forged documents under several tenders. The PPDA investigated the matters and found that the firms breached the Code of Ethics of Providers. In accordance with Section 8(1)(f) and 94 of the PPDA Act 2003, the board of directors considered the recommendations and resolved to suspend 44 providers [1]. There is likely some undue influence when key interests are at stake. However, it is not known how widespread this is.

There is not enough information to score this indicator. Since the assessor could not meet the procurement disposal unit, despite several attempts, I can not confirm whether or not such a training takes place. There is also nothing online about any such trainings.

Article 164-14 of the Code on Administrative Offences covers the responsibilities of public officials in the field of public procurement [1]. There is no criminal liability specifically for public officials in the field of public procurement, but if law enforcement bodies prove that there were indications of a crime in the actions of the chairman or members of the tender committee, such officials may be held liable according to Article 364 of the Criminal Code “Abuse of power or official position” [2].
Collusion between bidders is covered by the law (Anticompetitive concerted actions of business entities) [3]. The law also provides fine rates (fines up to ten, five or one per cent of the income (revenue) of the company from the sale of products) which Antimonopoly Committee may impose on bidders [3].

Article 164-14 of the Code on Administrative Offences provides sanctions for infringement of legislation on procurement with administrative fines of 17000-25500 UAH (607-911 USD) [1]. Article 364 of the Criminal Code “Abuse of power or official position” provides sanctions in the form of an arrest for six months, imprisonment for three years, deprivation of the right to occupy certain public positions or to engage in certain activities for a period of up to three years, and with a fine ranging between 4250 and 12750 UAH (152-455 USD) [2]. The Law of Ukraine On the Protection of Economic Competition provides sanctions for the collusion of bidders in the form of a fine depending on the income of the business entities [3]. There are also cases when business entities can be banned from participating in public procurement tenders [4]. The mentioned sanctions are for all possible types of violations, including bribery and corruption.

There is evidence that the Antimonopoly Committee investigates cases of bidders collusion in defence [1, 2, 3] and imposes fines [2]. The head of the Antimonopoly Committee is appointed and dismissed from office by the president with the consent of the Verkhovna Rada of Ukraine [4] and there is no strong evidence that the Antimonopoly Committee is under undue political influence. However, there are allegations of oligarchs influencing the committee [5]. Article 164-14 of the Code on Administrative Offences and Article 364 of the Criminal Code allows investigation and prosecution by different authorities depending on the number of bribes and officials involved in violations. An investigation is conducted either by NABU, SSU or National Police. The prosecution may be conducted either by SAPO or the General Prosecutor`s Office. There are reasons to doubt the independence of the General Prosecutor`s Office and Security Service of Ukraine. The General Prosecutor`s Office is strongly influenced by the President of Ukraine, as is the Security Service of Ukraine [6, 7]. The head of SAPO was recently suspected of certain illegalities [8].

It’s not been possible to find any evidence about obligatory specialized training for representatives of the MoD procurement department in order to punish collusion between bidders for defence and security contracts. However, the majority of staff from MoD procurement department are civil servants so according to the Civil Service Law they have to receive number of trainings in their competencies at least once per three years [1]. Besides, procurement sphere is in the focus of international advisers and experts who are working closely with MoD. For this reason, there are trainings for procurement department of MoD organized by NATO Liason office in Ukraine, British Embassy, Center for Integrity in Defence Sphere (CIDS, Norway), NAKO and some others. The frequency of such courses organized by international partners is at least once in 4-6 months.

Evidence, has demonstrated that there is no specific or wider national legislation addressing defence procurement in general, and thus there is no legislation addressing collusion in defence procurement. It has been established previously throughout this assessment that there is no information available as defence procurement is privately run by Tawazun Holding L.L.C, established in 2007, as a strategic investment holding company, and a fully owned subsidiary of Tawazun Economic Council, established in 1992. Tawazun Holding L.L.C and Tawazun Economic Council do not share any information about clear legislation and regulations covering any procedures meant to discourage and punish collusion between bidders for defence and security contracts. As mentioned previously in (Q57-58), the UAE Federal Procurement Resolution No. 32 of 2014, amended in resolution No. 43 of 2016, representing the country’s national legislation concerning procurement, explicitly exempts the Ministry of Defence, the Supreme Council for National Security, and the Ministry of Interior (Q57A). Research has revealed that Tawazun Holding L.L.C and the Tawazun Economic Council, Chaired by H.H. Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces is in charge defence and specialised manufacturing through industrial partnerships and strategic investments in the defence sector. There is no information available on Tawazun’s procurement policies and legislation addressing collusion between the bidder.

This sub-indicator has been marked as Not Applicable, as with the lack of a legal framework discouraging and punishing collusion between bidders, assessing its sanctions is irrelevant in this context (1), (2).

This sub-indicator has been marked as Not Applicable, as with the lack of a legal framework discouraging and punishing collusion between bidders, assessing its sanctions is irrelevant in this context (1), (2).

There is no evidence that procurement officials are training in regards to collusion between bidders.

The Competition Act 1998, which applies to defence and security bidding, outlaws anti-competitive behaviour such as collusion [1].

Chapter 2 of the Act provides a clear definition:

“Subsection 1 applies, in particular, to agreements, decisions or practices which—
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts” [1].

Regulation 57 of the Public contracts Regulation 2015 empowers procurement officials to exclude companies and senior company officials where there is a conviction or reasonable evidence of bribery & corruption related offences [1]. When it comes to collusion, the Regulations, allow, but do not require procurement officials to exclude bidders from competition (i.e. discretionary exclusion) [2].
Additionally, the Competition and Markets Authority (CMA) has the power to impose fines of up to 10% of annual turnover, as well as pursue prison sentences for individuals found to have breached rules [3].

The Competition Act 1998 established a non-ministerial body currently called the Competition and Markets Authority which has the power to investigate and prosecute violations of the Competition Act [1]. A review of cases indicates that the Authority is active in investigating/prosecuting cases, including within the defence sector [2]. There is no evidence of the authority coming under undue political influence.

In December 2017, the Competition & Markets Authority (CMA) announced new guidance and learning resources designed to help combat collusion between suppliers bidding for public contracts [1]. The new resources include an e-learning module, as well as a software tool which uses algorithms to spot unusual bidder behaviour and pricing patterns which may indicate that bid-rigging has taken place. According to the Ministry of Defence, MOD commercial policy includes guidance on what to do in the event that a suspicious bid is received and this is included in commercial staff training courses [2].

The issue of collusion within procurement is addressed within legislation on ‘antitrust’, which works to ‘prohibit business practices that unreasonably deprive consumers of the benefits of competition’ [1]. There are three major Federal antitrust laws: the Sherman Antitrust Act, the Clayton Act and the Federal Trade Commission Act. The Sherman Act [2] criminalises agreements between competitors to fix prices, rig bids or allocate customers. The Clayton Act [3] has no criminal penalties but prohibits mergers or acquisitions which would lessen competition. Finally, the Federal Trade Commission Act [4] prohibits unfair methods of competition in interstate commerce; it also does not have criminal penalities. The Sherman Act is most relevant here, however, it only applies to bidders, not officials.

The accepting of bribes by personnel officials from bidders or bodies involved in a bidding process is covered under the Procurement Integrity Act within the FAR, which prohibits the accepting of future employment from a bid offeror and the disclosure of procurement information [5]. Chapter 21 of the Federal Procurement Policy, which covers the obtaining and disclosure of certain information, prohibits the following activities: the disclosure of information relating to contractor bids and procurement information before the award; officials being contacted by the bidder regarding non-Federal future employment; or a former Federal official accepting compensation from a contractor within 1 year after the official was associated with the same contractor in an official capacity. If a contracting officer receives information of a violation or possible violation under Chapter 21 that would impact the procurement, the contracting officer must forward the information to the head of contracting activity (HCA). Following this, if the HCA determines that there has been a violation, the contracting officer can cancel the procurement, disqualify the offerer or take any other necessary action [6]. If the contract has been awarded, the contracting officer can rescind the contract.

Subpart 3.3 of the FAR regulates antitrust violations. If there is evidence of a violation of antitrust laws within bids or proposals, the contracting agency is required to report it to the Attorney General [1]. A violation of Federal antitrust statutes relating to the submission of offers is cause for debarment [2]. With regard to the prohibited activities that fall under Title 41, Chapter 21 of the U.S. Code, as mentioned in 66A, criminal penalities can be imposed in addition to administrative action, which can include a fine, imprisonment for up to 5 years or both [3,4]. No mention of specifically sanctioning senior contractor officials is made in the FAR and it is not clear how long the debarment would last. There is evidence that in past years, suspension and debarment have not been used effectively [5].

An FOIA request made in 2019 by Steven Aftergood revealed that, between 2013 and 2017, there were 1,059 criminal cases of defence contracting fraud, resulting in the conviction of 1,087 defendants, including 409 businesses. During this period, nine contractor entities were debarred. During that same period, the DoD entered into more than 15 million contracts with contractors who had been indicted, fined and/or convicted of fraud, or who had reached settlement agreements. The value of these contracts with penalised contractors exceeded $334 billion. This information was compiled as a result of a requirement of the 2018 NDAA on the initiative of Senator Sanders [1,2]. This does not seem to be annual requirement. There is no evidence of undue influence in this report or in other media. Any influence seems to be irrelevant given that, despite these prosecutions, the DoD continues to give contracts out to businesses with a history of contracting fraud. Evidence of procurement fraud sanctions can also be found in the Semiannual Reports of the DoD OIG to Congess [3,4]. For example, an Army GS-15 employee received gratuities from a DoD contractor in order to give the contract preferential treatment [4]. There is evidence however, that the large defence contractors are too big to be debarred. Neil Gordon of POGO says: “Too often, the big players are given a slap on the wrist. Suspensions and debarments are more likely to be imposed on individuals and small companies” [5].

The Procurement Collusion Strike Force (PCSF) organises training with the DoD Inspector General for procurement officials at all levels. The purpose of this training is to enable officials to identify the red flags of collusion [1]. Annual ethics training is mandated for contracting officers, i.e. any officer who has the authority to enter into a Federal agency procurement contract. This training includes concepts on financial conflicts of interest; impartiality; misuse of position; and gifts [2]. It is not clear whether it includes specific modules on identifying collusion and malpractice.

In 2014, the Under Secretary for Defense (Acquisition, Technology and Logistics) released a memorandum stating that annual ethics training is mandatory for the defence acquisition workforce [3]. Each agency that undertakes acquisition produces their own training policies. For example, in January 2021, the Army published a memo on mandatory annual ethics training for the army acquisition workforce. This memo included details on the online ethics training that could be taken, however, it doesn’t state whether this training covers issues relating to identifying collusion and malpractice [4].

The Public Procurement Law (LCP) and other legal instruments used in public procurement make no explicit reference to measures seeking to prevent the collusion of bidders.

The LCP includes the promotion of competition in procurement by prioritising open tenders, prohibiting the same person from bidding multiple times for the same tender, and prohibiting the participation of bidders who have direct relationships with other bidders [1]. Although this could indirectly reduce the risk of corruption through collusion between bidders, there are no specific regulations in the defence sector prohibiting and sanctioning the partnership of bidders to impede the participation of third parties in tenders. Meanwhile, training provided in the area of public procurement is focused on administrative aspects, with no emphasis on the reduction of corruption risks and avoidance of malpractices such as the collusion of bidders [2].

Free competition is not only stipulated by the LCP, but also by the Anti-trust Law adopted in 2014 with the aim of “promoting, protecting, and regulating the exercise of fair economic competition” [3]. However, this law does not clearly or explicitly include measures to prevent monopolies in public procurement processes. Meanwhile, several academic studies have agreed that the law contradicts the economic model of the regime, which does not uphold policies seeking to promote free competition [4], as well as pointing out that this law is not being applied effectively even though it is in force [5].

This indicator is marked ‘Not Applicable’. Venezuelan law does not lay out direct penalties for bidder collusion; however, it does provide measures that may exclude bidders from future tenders in cases involving the proven participation of persons who have engaged in practices that affect free competition. Although these controls exist, it should be noted that most contracts are set up through direct contracting, and there has been no evidence of sanctions or judicial proceedings for breaches of defence sector procurement [1].

The Defence Sector Procurement Committee (CCSD) may reject bids which evidence failure to comply with the requirements set out in the contracting documents or statutory administrative procedures, and may also exclude bidders for practices such as the multiple participation of the same person in a tender, or the participation of several persons related through joint undertakings or associations [2]. While a bid may be rejected, the CCSD cannot impose sanctions that disqualify bidders from further tenders. Moreover, corruption-related behaviour is not included explicitly or in detail in the LCP or in instruments such as the Anti-Corruption Law [3]. These controls are therefore limited.

In cases proven to involve the aforementioned practices or bribery, influence peddling, the provision of false information, or payment of commissions – after the contract has been awarded – the contracting party may unilaterally terminate the contract and proceed to file a complaint with the Office of the Comptroller General of the Republic (CGR), which may initiate administrative proceedings [4]. In these cases, sanctions could involve disqualifying the company from contracting with the state for four years and a fine specified by law. Although cases involving proven corrupt practices on the part of the bidder can be punished, there are limitations to the punishment of cases of malpractices identified early in the bidding process and once the contract is awarded, and the classifications of corruption malpractices do not cover specific behaviours including bidder collusion and conflict of interests.

This indicator is marked ‘Not Applicable’. The legislation governing public procurement in Venezuela does not impose sanctions on bidder collusion, nor does it recognise this as a conduct that should be prevented. The penalties set out in the LCP include other actions associated with corruption and seek to prevent malpractices that affect free competition; however, there are two key structural factors hindering the protection of free competition. Firstly, particularly in the defence sector, misconduct leading to administrative liability in public tenders is not investigated even in the face of evidence of irregularities [1]. Secondly, the use of direct contracting has become more recurrent, as has the contracting of companies run by military personnel [2, 3], obstructing the promotion of free competition as proposed by the LCP [4, 5].

Training provided in the area of public procurement is focused on administrative aspects, with no emphasis on the reduction of corruption risks or avoidance of malpractices such as bidder collusion [1]. There are no specific regulations in the defence sector that prohibit and sanction the partnership of bidders to impede the participation of third parties in tenders.

There is no legislation specifically covering defence procurement. The Public Procurement and Disposal Act guides the conduct of all procurement officers in all public procurement entities, including the military and defence sector [1]. The act proscribes conflict of interest and prohibits undue influence on tenders or collusion between bidders and procurement officers and between bidders. The Public Entities Corporate Governance Act also obliges public entities to conduct themselves with integrity, befitting the proper principles of corporate governance [2].

The Public Procurement and Disposal Act empowers procurement officers to disqualify bidders if they have been implicated in acts of bribery or corruption or collusion or any form of dishonesty or corruption-related convictions [1]. The act goes further, outlining the basis on which bids can be outrightly rejected; this includes failure to submit sufficient information to allow proper adjudication or provision of false and misleading information in the bid [1, 2].

Those involved in acts of corruption in respect of procurement are arrested and arraigned before the courts [1]. The arrests and prosecutions have been described as superficial, especially when they involve high profile politically connected individuals and companies; the prosecutions rarely result in convictions [2].

The Public Procurement and Disposal of Public Assets Act provides general obligations to train personnel involved in procurement entities to ensure they are equipped and competent enough to discharge their duties [1]. Officers involved in procurement attend procurement courses before deployment; they cover issues of collusion and reporting cases [2].

Country Sort by Country 66a. Legal framework Sort By Subindicator 66b. Sanctions Sort By Subindicator 66c. Enforcement Sort By Subindicator 66d. Training Sort By Subindicator
Albania 75 / 100 50 / 100 NA 50 / 100
Algeria 100 / 100 0 / 100 NA 50 / 100
Angola 0 / 100 NA NA 0 / 100
Argentina 100 / 100 50 / 100 NA 0 / 100
Armenia 100 / 100 50 / 100 75 / 100 0 / 100
Australia 50 / 100 75 / 100 100 / 100 0 / 100
Azerbaijan 50 / 100 25 / 100 0 / 100 0 / 100
Bahrain 0 / 100 NA NA 0 / 100
Bangladesh 50 / 100 25 / 100 NEI 0 / 100
Belgium 100 / 100 75 / 100 NEI 100 / 100
Bosnia and Herzegovina 0 / 100 NA NA 0 / 100
Botswana 100 / 100 100 / 100 50 / 100 50 / 100
Brazil 100 / 100 75 / 100 NA 50 / 100
Burkina Faso 25 / 100 0 / 100 0 / 100 NEI
Cameroon 0 / 100 0 / 100 NA 0 / 100
Canada 75 / 100 75 / 100 100 / 100 50 / 100
Chile 50 / 100 50 / 100 75 / 100 NEI
China 100 / 100 100 / 100 NEI 0 / 100
Colombia 50 / 100 100 / 100 75 / 100 50 / 100
Cote d'Ivoire 25 / 100 50 / 100 0 / 100 0 / 100
Denmark 100 / 100 100 / 100 NA 0 / 100
Egypt 50 / 100 25 / 100 25 / 100 0 / 100
Estonia 50 / 100 25 / 100 100 / 100 50 / 100
Finland 50 / 100 100 / 100 NEI NEI
France 100 / 100 75 / 100 75 / 100 25 / 100
Germany 100 / 100 100 / 100 100 / 100 75 / 100
Ghana 25 / 100 100 / 100 25 / 100 0 / 100
Greece 100 / 100 100 / 100 75 / 100 50 / 100
Hungary 50 / 100 25 / 100 NA NEI
India 50 / 100 50 / 100 NA 50 / 100
Indonesia 100 / 100 75 / 100 75 / 100 25 / 100
Iran 50 / 100 0 / 100 NA 0 / 100
Iraq 25 / 100 0 / 100 0 / 100 0 / 100
Israel 100 / 100 100 / 100 75 / 100 75 / 100
Italy 100 / 100 100 / 100 75 / 100 50 / 100
Japan 100 / 100 100 / 100 100 / 100 100 / 100
Jordan 0 / 100 NA NA 0 / 100
Kenya 50 / 100 75 / 100 25 / 100 0 / 100
Kosovo 25 / 100 100 / 100 50 / 100 0 / 100
Kuwait 0 / 100 NA NA 0 / 100
Latvia 100 / 100 75 / 100 75 / 100 50 / 100
Lebanon 0 / 100 50 / 100 NA 0 / 100
Lithuania 25 / 100 25 / 100 NA 0 / 100
Malaysia 25 / 100 25 / 100 50 / 100 NEI
Mali 25 / 100 50 / 100 25 / 100 100 / 100
Mexico 50 / 100 100 / 100 75 / 100 0 / 100
Montenegro 50 / 100 0 / 100 0 / 100 0 / 100
Morocco 0 / 100 NA NA 0 / 100
Myanmar 0 / 100 NA NA NEI
Netherlands 50 / 100 75 / 100 100 / 100 0 / 100
New Zealand 75 / 100 100 / 100 NA 0 / 100
Niger 25 / 100 75 / 100 0 / 100 0 / 100
Nigeria 0 / 100 25 / 100 75 / 100 NEI
North Macedonia 50 / 100 50 / 100 100 / 100 50 / 100
Norway 100 / 100 100 / 100 NA 75 / 100
Oman 0 / 100 NA NA 0 / 100
Palestine 75 / 100 75 / 100 50 / 100 0 / 100
Philippines 100 / 100 100 / 100 50 / 100 50 / 100
Poland 100 / 100 100 / 100 100 / 100 0 / 100
Portugal 50 / 100 75 / 100 100 / 100 50 / 100
Qatar 0 / 100 NA NA 0 / 100
Russia 100 / 100 100 / 100 75 / 100 0 / 100
Saudi Arabia 25 / 100 0 / 100 25 / 100 0 / 100
Serbia 100 / 100 100 / 100 100 / 100 100 / 100
Singapore 75 / 100 100 / 100 75 / 100 0 / 100
South Africa 100 / 100 100 / 100 100 / 100 0 / 100
South Korea 100 / 100 100 / 100 75 / 100 100 / 100
South Sudan 100 / 100 100 / 100 NEI NEI
Spain 100 / 100 75 / 100 NA 0 / 100
Sudan NEI NEI 0 / 100 0 / 100
Sweden 50 / 100 100 / 100 100 / 100 50 / 100
Switzerland 75 / 100 100 / 100 NA 50 / 100
Taiwan 100 / 100 100 / 100 75 / 100 50 / 100
Tanzania 100 / 100 100 / 100 0 / 100 50 / 100
Thailand 100 / 100 50 / 100 0 / 100 50 / 100
Tunisia 50 / 100 25 / 100 25 / 100 0 / 100
Turkey 50 / 100 75 / 100 25 / 100 50 / 100
Uganda 25 / 100 75 / 100 50 / 100 NEI
Ukraine 50 / 100 100 / 100 25 / 100 0 / 100
United Arab Emirates 0 / 100 NA NA 0 / 100
United Kingdom 100 / 100 100 / 100 100 / 100 75 / 100
United States 100 / 100 75 / 100 75 / 100 100 / 100
Venezuela 0 / 100 NA NA 0 / 100
Zimbabwe 100 / 100 100 / 100 25 / 100 100 / 100

With thanks for support from the UK Foreign, Commonwealth and Development Office (FCDO) and the Dutch Ministry of Foreign Affairs who have contributed to the Government Defence Integrity Index.

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