The Law on Public Procurement (LPP) outlines the general criteria for prohibiting companies to participate in public tenders [1]. The contracting authority can disqualify any bidder from a procurement procedure when there is evidence that he or she has been convicted for participation in a criminal organization; corruption; fraud; money laundering, acts for terrorist purposes; falsification (Article 44).
According to the LPP, the Public Procurement Agency (PPA) can expel a bidder from participation in a procurement procedure for a period of one to three years if there is evidence of the bidder attempting to corrupt an official for influencing the procedure or conflict of interest (Articles 13, 26). The guidelines on combating prohibited bargaining in public procurements provide instructions on the designation of tender specifications as a means to avoid corruption in procurements [2]. The companies that are willing to participate in procurements that involve access to classified information are required to have security clearance for the employees that are likely to have access to classified information [3]. However, there are no obligatory provisions for the companies to sign anti-corruption clauses in contracts with the government or that require them to develop anti-corruption practices at the company level.

This indicator has been marked Not Applicable. This is due to the fact that there are no obligatory provisions for the companies to sign anti-corruption clauses in contracts with the government or that require them to develop anti-corruption practices at the company level. It is worth noting that the PPA regularly publishes the companies that are excluded from participating in tenders on various grounds [1]. The decisions are also published in the procurement bulletins that allow the companies to get informed on the status of the excluded companies [2]. The PPA and CPP are the authority for defence procurements. Only the SSAI and the parliament may oversee them, but no information is provided on companies’ compliance. This has not been part of the scope of the SSAI audits while the parliament has not proactively pursued the review of the effectiveness of anti-corruption mechanisms in procurements [3].
In 2017 one MoD contractor was expelled from participation in public procurements for the failure to fulfil contractual obligations [4].

According to a US State Department report, private companies are generally not required to have internal codes of conduct concerning the bribery of public officials. Some companies follow codes of conduct standards, while there are rumours that others pay bribes (1). The Public Procurement Law of 2006 does not require that bidding firms have a specific code of conduct. It only states that it is an offence when any person offers or grants remuneration or benefits to an official in connection with a public contract. The code of conduct mentioned earlier only applies to public officials, but not bidding firms (2).

This sub-indicator has been marked Not Applicable because there is evidence that private companies are generally not required to have internal codes of conduct with regards to the bribery of public officials (1), (2); also see the answer to question 62A. Therefore, the consistency of the implementation of these standards cannot be assessed.

The public procurement law establishes some basic anti-corruption requirements. The parties interested in participating in a tender cannot get involved, participate or support corrupt practices (Art. 9) (1). The public procurement law applies to all public contracts, open or restricted tenders, tenders by invitation or simplified procedures (direct awards), except for arms or military logistics procurement contracts that are declared secret. Beyond the general principles laid out in the general legal framework, (public procurement law, law on public probity, anti-money laundering legislation) (1) there aren’t any more detailed anti-corruption requirements for companies working for the government in general, the Ministry of Defence, or the armed forces.

The bulk of known defence procurement contracts over the last few years were directly awarded (a simplified procedure or negotiation procedure under the previous 2010 public procurement law) (1), and there is little information on the selection criteria applied.

Examples:
– The €88,161,000 contract with Augusta Westland S.P.A. in 2015 for the acquisition of six helicopters, spare parts and training of specialists;
– The $9 million contract with Moscóvia Ltd in 2017 for technical assistance and refurbishments of air force planes;
– The €495 million contract with Privinvest Shipbuilding Investments LLC in 2016 (no specification of contract procedure) for technical assistance and the acquisition of 17 naval vessels (2), (3), (4).

There are two legal documents covering the procedures and standards companies are required to observe in order to bid for work for the public sector (including the Ministry of Defence): Decree 1023/2001 [1] [2] and the Manual for the Procedures for Hiring in the National Administration of 2016. [3] Neither of these documents mention any ethics, compliance, or anti-corruption policies that should serve as minimum requirements for hired parties.

This indicator has been scored Not Applicable. There are no standards relating to anti-corruption compliance required in defence procurement. [1] [2]

Articles 6 and 7 of the Law on Procurement provide details on suppliers’ profile. Clause 3 of the Article 6 outlines the restrictions upon which the supplier cannot participate in the competitions. In particular, the suppliers that were tried or charged for terrorism financing, corruptive behaviour and other economic crimes within three years from the date of the competition are not eligible to submit a bid [1].
In addition to the Law of Procurement, the Government Decree N 526-Ն further elaborates the provisions of the Law on Procurement through a detailed description of the whole procurement cycle [2].
All the applicants/suppliers are to comply with a set of qualifications and descriptions while applying to the defence procurement biddings and tenders. The compliance scheme is thoroughly described in the Law on Procurement and Decree N 526-Ն, other procurement related decrees and the requests for bids and proposals that derive from the legislative provisions.
To ensure the legality of procurement, a “black list” of companies in the Republic of Armenia (the list of participants not eligible to participate in the procurement process) is used, which includes persons who have breached contractual obligations, submitted false information, exhibited anti-competitive behavior and engaged in other unlawful activities. After Armenia’s accession to the Eurasian Economic Union (EAEU), this list is not limited to Armenian practice: it also includes companies engaged in illegal activities in the EAEU member states’ territory. [3].

There is evidence that the laws are accurately implemented, otherwise, the Ministry of Finance, as the authorized institutions to follow the whole cycle of procurement, may not approve the deal at the very beginning of the process through providing a negative opinion on the competition announcement. The Law on Procurement was improved in terms of providing more transparency to the whole procurement cycle. In particular, more detailed announcements should be posted onto the electronic procurement systems available to the public. Then, the procedures are simplified for suppliers to participate in competitions as only four regulations out of seven remained in the Law. The policies and procedures are implemented as prescribed by the law. In cases, when the suppliers/bidders do not agree with the procurement process, there is a well-established complaint procedure. Chapter 6 of the law outlines the compliant procedure [1].
Thus, a random announcement by the MoD on the urgent open tender to request bids on flour delivery has a detailed outline of the rights and responsibilities of the parties, and a voluminous paragraph on the profile that the applicant/supplier should comply with. The qualification criteria for the individuals who have no rights to participate in the tender, as well as the qualification criteria for the participants and the documents to be submitted for the evaluation of those criteria are set out in the invitation of the tender. In particular, those charged for child labour abuse or human trafficking, for bribery, for terrorism financing, for abuse of dominating position and other illegal activities should not have any right to participate in the bidding [2]. However, there were cases before the revolution when these laws were not always consistently implemented [3].

There is some high-level procedures on how government discriminates in its selection of suppliers, and in some cases, companies are required to sign clauses that have reference to corruption issues, but compliance programmes or business conduct programmes do not appear to need to be in place in order to bid for work with Defence. The Defence Procurement Policy Manual states that “Relevant entities must not seek to benefit from supplier practices that may be dishonest, unethical or unsafe. This includes not entering into contracts with tenderers who have had a judicial decision against them (not including decisions under appeal) relating to employee entitlements and who have not satisfied any resulting order. Officials should seek declarations from all tenderers confirming that they have no such unsettled orders against them” [1]. The Commonwealth Procurement Rules (CPRs), which is the legal instrument which Defence officials must comply with while carrying out public procurement, allow for “Relevant entities [to] specify conditions for participation that potential suppliers must be able to demonstrate compliance with in order to participate in a procurement,” however, these conditions “must be limited to those that will ensure that a potential supplier has the legal, commercial, technical and financial abilities to fulfil the requirements of the procurement.” In addition, “significant deficiencies in performance of any substantive requirement or obligation under a prior contract” may be ground for exclusion [2]. Most importantly, “entity-specific operational rules” [2, paragraph 2.5], including regulations to exclude companies for bribery or other corruption-related offences, may be enacted by senior Defence officials [3], though it is unclear what specific Defence policy exists in practice. The Australian Competition and Consumer Commission recommends that public procurement contracts include an anti-collusion clause [4], and the Australian Trade Commission recommends that private companies include anti-corruption termination clauses [5]. Clauses that speak to corruption issues, such as collusive bidding, anti-competitive behaviour, and bribery are part of the standard template for both Strategic [6] and Complex [7] procurement contracts under the Australian Standard for Defence Contracting. The Defence Industry Security Program (DISP), participation in which is required for companies to secure sensitive Defence contracts, does have a mandatory fraud reporting requirement [8], but it does not seem that Defence policy makes any sort of compliance program or lack of history of corruption-related behaviour necessary to participate in DISP. In addition to the apparent lack of Defence policy on requiring certain anti-corruption procedures and standards and excluding companies for previous corrupt behaviour, one expert said that, with a recent overhaul of Defence procurement policy, contractors were now responsible for engaging and regulating their own sub-contractors rather than government [9], which would make it more difficult for Defence to discriminate sub-contractor behaviour. One commentator noted that a lack of public discussion or requirement for an anti-corruption compliance program to be in place led to little consideration of these issues when picking the main contractor for the more than $50 billion Future Submarines Program [1]). The ultimately selected firm, DCNS or Naval Group, has been embroiled in bribery and corruption scandals over 20 years that have landed executives, including a former CEO, in jail [1]).

There is limited evidence of Department of Defence (DoD) compliance or non-compliance specifically with the standards and procedures around non-corrupt behaviour in practice, however, reports in the media reveal a culture not strongly invested in consistent implementation of procurement procedures. An internal DoD audit reported on in the media revealed the troubling lack of compliance with other procurement procedures, such as huge volumes of missing or incomplete paperwork, flimsy value for money justifications, and other examples of serious “maladministration”. The audit was triggered by accusations of collusive behaviour between contractors and DoD procurement officials, though this was not substantiated [1]. While the anti-bribery components of the Strategic and Complex Materiel procurement contracts state: “the Tenderer acknowledges and agrees that the Commonwealth may exclude the Tender from further consideration if the Tenderer, any of its Related Bodies Corporate, or any officer of any of them has been convicted of bribery of Commonwealth, State, Territory or foreign government officials during the last seven years” [2, 3], a contract (which would have not fallen under the Strategic or Complex Materiel procurement) was awarded by DoD to a firm that was blacklisted by the American government for bribery offences. The firm’s President was still serving probation for the bribery offences [4].

According to experts (1, 2, 3), there are no specific standards of conduct for companies to be able to bid for work for the military structures in Azerbaijan. There are no special standards for defence in the tender laws and procurement legislation. The Law on Tender states that (Article 9.1.e) the material and technical and economic-financial capability of the companies (the bidder) is checked (4). According to the procurement law (Article 6.2.1), contractors must comply with the following criteria for participation in procurement procedures: availability of professionalism, experience, technical and financial capabilities, workforce, management competence, trustworthiness in the relevant field to ensure the implementation of the procurement contract (5).
The Defence Ministry has stated that, due to the requirements of the Law on Public Procurement, contractors must have the professionalism, experience, technical and financial capabilities, workforce, management competence, trustworthiness in the relevant field. This is the main criterion for assessing bid proposals based on the results (6).
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 (7).
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 (8).
The laws do not contain concrete business conduct rules and ethical rules to participate in tenders. According to experts (1,2,3), the winners are mainly relatives and acquaintances of officials. In most cases, companies are created shortly before the announcement of the tender and these companies win the competition. There is no fair competition environment. Long-term successful activity is not a requirement to win the tender. This is also reflected in Law on Tenders (14.2.v).

This indicator has been marked Not Applicable. There are no specific standards of conduct for companies to be able to bid for work for the military structures in Azerbaijan. There are no standards in the bidding laws and procurement legislation (1, 2, 3).
Several laws stress the importance of fair competition for companies (4, 5), but in reality, this does not happen. The Government of Azerbaijan has committed to improving public procurement and increasing transparency within the “National Action Plan for Corruption in 2012-2015”. However, these commitments have not yet been fulfilled (6).

The Civilian and General Procurement Law does not apply to the defence sector [1]. Therefore there are no laws or procedures that regulate how the government selects companies (not even an internal index of companies). Companies are not required to sign any papers other than the contract that may contain some elements such as quality and content [2, 3].

As outlined in 62A, there are no policies which regulate how the government selects companies or contractors. As such, this indicator has been marked ‘Not Applicable’ [1, 2].

The rules of Defence Purchase 35 (DP-35) [1] outline details of procedures and standards for conducting business with the Ministry of Defence. The registration policy for suppliers [2] clearly outlines both eligibility and illegibility criteria, the types of registration formalities to be performed, including the submission of documents, and the information to be provided for security clearance [3] (also for retired military staff), which includes a formal affidavit [4] certifying the authenticity of all information. There is no public evidence to suggest that suppliers or subcontractors are required to sign anti-corruption clauses in contracts with the government or that companies must implement their own integrity programmes when dealing with the Ministry of Defence. Interestingly, Section 31 of DP-35 states that any contract with the DGDP is protected under the Official Secrets Act of 1923 and any violation will be dealt with through legal action [1].

This indicator is marked Not Applicable, as there is no evidence of any formal integrity-related policies that are used in the selection of suppliers and subcontractors. However, it is worth noting that there are strict formalities laid out in the tender instructions, as evident from the DGDP document, which is available on its website [1]. This tender document includes a compliance sheet covering 13 items for local suppliers, without any clauses or statement on anti-corruption. The special terms and conditions for international suppliers include 32 items, without any clauses on integrity. There is no public evidence to suggest that these compliance issues are fully implemented.

There are no specific laws and procedures detailing how the government discriminates in its selection of suppliers and sub-contractors on the basis of their integrity. Only compliance with selection criteria found in the procurement legislation is verified (Article 20 of the law of 13 August 2011 and Article 63 of the royal decree of 23 January 2012) [1, 2].

These selection criteria listed in the law are exhaustive; which means that unforeseen criteria cannot be used. However, Article 20 of the Royal Decree states that any candidates or tenderers having been the object of a condemnation pronounced by a court order for participation in: a criminal organisation; corruption, fraud or money laundering; child labour or human trafficking; terrorist offenses or offenses linked to terrorist activities, or instigation, help, participation or attempting to commit such offences, are disqualified from bidding.’

There is Not Enough Information to score this indicator. Any candidates or tenderers having been the object of a condemnation pronounced by a court order for participation in: a criminal organisation; corruption, fraud or money laundering; child labour or human trafficking; terrorist offenses or offenses linked to terrorist activities, or instigation, help, participation or attempting to commit such offences, are disqualified from bidding [1, 2].

As there is little information on which companies bid for a contract, it is hard to know if these policies and laws are fully implemented. There is, however, no proof to the contrary [3]. The companies awarded the contract have, as far as research on the companies at hand goes, indeed not recently been convicted of any of the above crimes.

The Public Procurement Law of Bosnia and Herzegovina (PPL) excludes from bidding companies which have been convicted of corruption and provides for disqualification based on conflict of interest or corruption during the procurement process (such as paying bribes to further the bid) [1]. Companies are required to declare that they have not engaged in corrupt practices, such as active or passive bribery, in the course of the procurement process, which is here considered equivalent to a ‘no-corruption’ or ‘integrity’ clause. However, there are no requirements regarding the adoption of full compliance or business integrity by companies bidding for work with the Ministry of Defence [2, 3].

Bidding companies are not required to have an ethics program to be able to bid for work [1, 2, 3]. As noted in 62A, the law excludes some corrupt bidders. Regarding the practice, there is no way to see fully that some companies were excluded because of this. As it can be presented as an incomplete bid (due to lack of documentation). There are no available media reports on this issue. The answer in 62A points to the declaration that needs to be signed, and for all procurement made under the PPL this is a necessity (except small purchases up to 3067.75 EUR / 6000 BAM).

The following PPADB Act provisions are applicable, however there are no specific references to anti-corruption clauses or requirements.
116. Register of contractors.
The Board shall maintain an up-to-date register of contractors in works, supplies and services, or any combination thereof, however, classified to be cognizant at all times of the workload and the performance record of contractors according to its powers as set out in section 49.

117. Requirements to be registered.
To be registered as a contractor, the contractor must be licensed or incorporated under the relevant laws of Botswana.

118. Domicile and registration.
Registration in the Contractors’ Register shall be mandatory for contractors domiciled in Botswana intending to bid for Government procurement and asset disposal.

119. Registration and pre-qualification
(1) The Contractors’ Register shall not be considered as a pre-qualification list.
(2) Registered contractors shall be required to satisfy such other pre-qualification conditions as may be specified by the procuring or disposing entities in respect of any bid or disposal activity to be eligible to tender in each specific case.

120. Non-eligibility for non-registered contractors.
Non-registered contractors shall be disqualified from tendering, except in projects where the specific instructions in both the bidding package and the Tender Notice explicitly state that registration is not an eligibility requirement to participate [1,2].

This indicator is marked ‘Not Applicable’ because there are no policies which require anti-corruption standards in defence procurement contracts.[1,2]

There have been no legal changes between 2015 and 2020 on this topic. The Public Procurement Law 8.666/93 [1] establishes, respect to administrative probity, and they also have to ‘prove judicial, technical and economic clearance, as well as compliance with fiscal norms, as per Article 27 of Law 8.666 [2]. The Brazilian Ministry of Defence mentions in its Integrity Plan that all public bidding calls include anti-nepotism clauses [3]. However, and as stated in previous questions, there is a roll of defence products that are not subject to standard procurement procedures. Defence acquisitions follow Law 12.598/12 [4] that establishes fiscal benefits for companies classified as Strategic Defence Companies (for which it must have its headquarters in Brazil, and the majority of the company owners should be from Brazil). It also establishes that these acquisitions should be subject to a bidding process. This means that all companies should follow the public bidding laws, in addition to following specific defence procurement regulations. This process includes accreditation of all companies involved in any commercial arrangement with the government.

All companies comply with Law 8.666’s requirements to sell products or services to the government [1]. Exemptions are justified, and the name of the company exempted from the bidding competition is revealed in this justification document. For defence products, there are additional requirements stipulated in Decree 7.970/2013 [2, 3]. The Submarine Development Program’s (PROSUB) contracts are a good example of public procurements in Brazil [4].

No laws or procedures details how the government discriminates in its selection of suppliers and sub-contractors. Yet, signing anti-corruption clauses is not a prerequisite either. The only protocol (procedures and standards) companies should comply with, lies under Article 3 of Decree N° 0049 (2017), on the procedure for public procurement and contracting, execution and resolution. In fact, according to Article 3 of Decree N° 0049 (2017), “the contracting authorities cannot implement competitive processes between private bidders and public enterprises […] only if these the two latters fulfil the two following conditions:- they enjoy the vertue of a legal and financial autonomy; they are managed according to the provisions of business law” (1), (2).

Therefore, there is no mention of any other procedures or standards to fulfil before becoming eligible to bid for public procurement and contracting. There is no requirement of signing an anti-corruption clause either. Elsewhere, Law No. 038 does not mention anything about a prerequisite (procedures or standards) that potential bidders should meet to be allowed to bid on for the execution of public contracts.

Because there are no formal policies for business compliance, this indicator has been marked Not Applicable.

There is no evidence of the existence of laws or procedures detailing how the government discriminates in its selection of suppliers and sub-contractors; this is unsurprising given that defence procurement is confidential and exempt from tenders and OTC markets. Legislation that covers procurement in Cameroon exempts defence and security contracts (‘Special Contracts’) as per Article 71 of the Public Procurement Code (2018). According to Article 4 (2) (e) of the Code (2018), bilateral contracts (between the state and foreign party) that fall under the category of article 71 (special contracts) are exempted from the code’s provisions [1].

According to Transparency International, “most large-scale projects put up for public procurement involve the decision of the president directly” [2]. Furthermore, there is no evidence that suppliers or sub-contractors are required to sign anti-corruption clauses in contracts with the government, and it is unlikely that such clauses would be required due to the fact that defence procurement is exempt from competitive bidding and oversight [1].

There is no evidence that formal policies exist governing the standards required for bidding organizations, and defence procurement is exempt from tenders and OTC markets. Therefore this indicator has been marked Not Applicable.

Legislation that covers procurement in Cameroon exempts defence and security contracts (‘Special Contracts’) as per Article 71 of the Public Procurement Code (2018). According to Article 4 (2) (e) of the Code (2018) bilateral contracts (between the state and foreign party) that fall under the category of article 71 (special contracts) are exempted from the code’s provisions [1].

Companies must have appropriate security clearance in place in order to secure contracts with the Department of National Defence and the Canadian Armed Forces, however these requirements are specific to each bid. [1] [2] There are no additional anti-corruption standards beyond the established consequences for breaking the laws that govern all government procurement processes.

There are no clear proactive integrity or anti-corruption standards in relation to bidders, an issue also raised by the media, other than the fact that documented cases of past infractions may limit the success of future bids. [1] [2] [3] As such, this indicator is scored ‘Not Applicable’.

While there are procedures in place for the exclusion of bidders from registries and/or tenders, anti-corruption concerns do not seem to be of any relevance for the discrimination of suppliers. Decree 746 (Regulations for the Special Registry of Suppliers for the Defence Sector) contains no information in this regard, nor does Law 19886 (Basic Law on Administrative Supply and Services Contracts). The only legal instrument that deals with discrimination of bidders in detail is Art. 38 of Decree 250, Regulations of Law 19886. This article sets out the evaluation criteria for discriminating between bidders. None of these involve anti-corruption issues. Art. 64, detailing the required contents of a Supply and Services Contract, does not include anti-corruption obligations. While Chilean Law can keep a bidder with a shady background from contracting with the government (through its exclusion from the registries), it does not offer any guidance for choosing bidders that are better prepared in anti-corruption matters during the tender process, nor does it require the signing of specific anti-corruption clauses. [1, 2, 3, 4]

This indicator is scored ‘Not Applicable’. There are no standards relating to anti-corruption compliance required in defence procurement. Furthermore, there is evidence of obstacles in the effective implementation of the regulations outlined in 62A. The existent regulation allows the generation of separate special registers, at least one of each of the institutions and organisms of the armed and security forces [1]. In addition, the normative for public acquisitions [2] gives the armed and security forces the possibility of maintaining reserved or secret registers of services and goods excluded from this legislation. These exceptions create an opacity that has been pointed out by a Special Commission of Inquiry in the Chamber of Deputies [3], which encouraged the creation of a unique register of suppliers, ideally through a public market mechanism, that requires the registration of suppliers and their incompatibilities and ineligibilities. Indeed, the investigations that undercover the fraud in the army, the so-called “Milico-Gate”, revealed the existence of fake invoices that were paid to false suppliers for the illicit extraction of resources [4].

Military procurement in China until the late 2000s was a closed system regulated by the CMC and the State Administration of Science, Technology and Industry for National Defence (SASTIND) and involving a group of State Owned Enterprises researching and developing weapons for the PLA. [1,2] This changed in the early 2010s, as the PLA sought to expand synergies with the private sector and develop dual-use technologies. Despite opening up to the private sector, procurement is closely regulated by the state and dominated by SOEs, especially for research and development of weaponry.

Regarding policies and regulations, the degree of transparency is limited. Broad laws and certain CMC regulations are available, but the more technical implementation measures and regulations are not.

The Measures for the Implementation of the Scientific Research and Production Licensing of Arms and Equipment (武器装备科研生产许可实施办法 2010) outline a licensing system (with different categories according to the type of equipment) that companies need to adhere to in order to participate in the production of equipment for the PLA. According to Article 5, the State Administration of Science, Technology and Industry for National Defence is in charge of formulating the relevant requirements as well as accepting and examining applications for licensing.

Only SOEs are allowed to develop complete weapons systems or their subcomponents, while private companies can participate for non-critical subcomponents. There are 4 different types of licenses according to the nature of the programme, which are required before a company can research, produce or sell equipment to the PLA. [3]

There is no explicit reference to compliance programmes in available regulations but it is very likely that these exist in implementation measures and technical regulations that are not publicly available.
Still, the CMC Equipment Procurement Regulations make reference to conducting procurement with honesty (article 6) and commit to punishing abuse of power, collusion , embezzlement of procurement funds, and falsification of reports on the the quality of the equipment (Article 62), which demonstrates that anticorruption concerns are reflected in formal policies.

The existence of a licensing system which also restricts access to the two online platforms for military procurement shows that these regulations are implemented as part of the bidding process. However, there is an overall lack of transparency through, for instance, external scrutiny or media reports.

Article 8.1.J of Law 80 of 1993 states that individuals or companies found guity of corruption crimes are legally unable to contract with the state. [1] If the individual or company has already signed the contract, they must cede the contract to someone else (Art. 9.1). Art. 14 establishes the contractual clauses that public administration entities can and/or must agree to with these companies or individuals. Therefore, whilst there are some anti-corruption mechanisms in place, there is no mention of a specific anti-corruption clause nor are there regulations addressing discrimination between contractors in terms of corruption.

There are no policies and laws on the procedures and standards that companies are required to have in order to contract with the Ministry of Defence or its entities. As such, this indicator is scored ‘Not Applicable’.

There are legal provisions in the 2009 Code of Public Procurement on procedures and standards that companies are required to follow when negotiating a contract with public administration, including the MoD. The code also contains some anti-corruption provisions. The 2009 Code of Public Procurement (Décret n° 2009-259, Portant Code des marchés publics) contains provisions detailing certain procedures and standards that government suppliers and vendors are required to follow to sign a contract with the public administration. For example, Chapter 2 (Candidats, soumissionnaires et titulaires), Articles 48 and 49 define the requirements that companies must meet to be eligible for a public contract. Companies with obvious conflicts of interest are barred, as per Article 48 (1). Articles 48 states,

“Art. 48 – Companies are not allowed to participate in procurement or in the provision of public services where there is a conflict of interest, namely:
1. if the members of the Contracting Authority, Public Procurement Authority, the Procurement Unit or the bidding company… have financial or personal interests that can compromise the transparency of public procurement procedures.
2. if a company is affiliated with the consultants who helped prepare all or part of the tender documents” (1).

Articles 185 – 187 of Chapter two of the 2009 Code of Public Procurement also contain some anti-corruption standards (Sanction des violations commises par les candidats soumissionnaires ou titulaires), that the bidding companies must abide by. For example, Article 185 stipulates that a bidding company may be barred from future public tenders if the information they provide contains deliberate inaccuracies (1).

There is some evidence that the provisions in Articles 48-49 and 185-187 in the 2009 Code of Public Procurement are sometimes implemented when negotiating contracts with bidding suppliers. However, given the confidentiality surrounding the MoD’s procurement practices, consistent implementation is difficult to gauge through open sources. Reports on the recent history of public procurement in Côte d’Ivoire point to defence expenditure as a strategic sector that often eludes the usual procurement conventions and procedures. Though the report by J.M. Adou is dated (2004-2005), this could imply that the provisions put forth in the 2009 Code of Public Procurement are rarely implemented in defence contracts (1). Still, there is evidence that the provisions of Articles 48-49 and 185-187 are increasingly being implemented. For example, the WAEMU (Union Economique et Monétaire Ouest Africaine, UEMOA) web page dedicated to litigation cases connected to public procurement in Côte d’Ivoire contains a list of 67 cases ranging from 2011 to 2017 (2). One of the litigation cases listed involves a lawsuit due to irregularities regarding medical examinations of 1,500 demobilized former combatants in the Disarmament, Demobilization and Reintegration (DDR) program. There are two cases listed under the MoD (Ref. No. 020/2014/ANRMP/CRS and Ref. No. 021/2014/ANRMP/CRS), but both are related to the installation of kitchen equipment at military installations (2).

Both EU directives and national law regulates how the government discriminates in it selection of suppliers: 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 committed bribery, fraud, 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 authorities. 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]. The most recent Defence Agreement included a request that the Ministry of Defence will emphasise CSR in future procurements [3]. Criticism has been made of the fact that the request did not require any changes in current practices [4, 5]. Research indicates that DALO seek to implement the request by making the DALO CSR profile and reportings externally visible [6]. However, research did not find any official publicly available CSR policy, but media investigations mention that one does exist [7]. Research did find that CSR is an independent, explicit and integrated part of the contractual standard terms of delivery. Here, it is for instance stated that the bidder has to respect certain ILO Convention paragraphs about e.g. child labour. Further, the supplier has to work against corruption and be able to provide documentation to this end if asked [8, 9].

There is evidence that DALO is working towards implementing the Defence Agreement’s request for CSR emphasis [1, 2]. Research identified an incident where the Defence’s contract on the procurement of Sig Sauer handguns appears to have been transgressed (in relation to the ethical and social standards) by the supplier [3]. This instance is not indicative that strategically important suppliers are generally exempted from policies and laws.

In the Law no. 182 of 2018, which is the main legal texts that regulate public procurement in all sectors, there is no mention of discriminating on the basis of integrity. The only criteria that are mentioned in the law which selection of companies should be based on are price and the satisfaction of technical requirements. However, Article 6 of the executive regulations stipulates that the procurement departments of public administrations should have a database of companies that are banned from bidding and that the reason for the ban should be listed in the database. In Article 50 of the Law, corruption is listed as a reason for banning companies from future bids (1).

This sub-indicator is marked Not Applicable because there is strong evidence that these standards are not consistently implemented, especially when it comes to the defence and security sectors. According to our interviews, the laws are bypassed, while corruption and nepotism have taken over the processes of procurement (1), (2), (3). The law (4) itself allows for bids to be secret as required by “national security considerations” (Article 77), there is not a strict definition, which means that as a provision, it can be used for things remotely related to the defence and security sector. This is in addition to the wide powers given to the MoD and the MMP to decide to make the bids secret as they deem necessary (4)

An anti-corruption clause is listed as a requirement in the document that has to be signed by the representative of the company. It is compulsary for both restricted and open procurements. It stipulates that in case the representative of the company has been found guilty of corruption within the last five years it is considered as grounds for exclusion. [1] Corruption is not an issue that has been brought up in the public overview document that explains public procurement procedure at the Ministry of Defence. [2] However, in accordance with the Public Procurement Act, tenders that have been submitted as a result of corruption are not accepted. [3] Secondly, a public contract is not awarded to a company whose representative has been convicted for violating the duty of integrity or for corrupt practice. The latter is included in the public contract documents, under the qualification conditions. [4] Therefore, there are some restrictions to companies that do not meet high anti-corruption standards, even though these restrictions are not part of procurement documents.

The Corruption Crime Bureau under Estonia’s Central Criminal Police publishes analyses every second year. [1] These reports include corruption in public procurement. The report shows that, first of all, violation of public procurement contracts has not been prevalent in Estonia in recent years – combining all governmental sectors, there have been up to ten cases per year. These reports from recent years (2014-2017) do not show any cases of breaches of public contracts in the defence sector. [2] There is no other evidence that indicates whether the Public Procurement Act is or is not followed when signing public contracts and following the lawful conditions.

Act on Public Defence and Security Acquisition, Chapter 8 defines the conditions under which a bidder has to be excluded from the bidding process. These include:
convictions for e.g. organised crime, bribery, fraud, terrorist activities, money laundering, and usury type of discrimination at work. Furthermore, e.g. a breach of contract terms previously (proven by the acquisition unit) will lead to exclusion. Section 50 states that the acquisition unit may request from the bidders and/or offerers declarations regarding their financial situation, technical performance capability, professional qualifications, information security, security of supply, and quality – as well as to set additional requirements in these areas.

Requirements and declarations must relate to the bidder’s ability to successfully manage the order and be relative to the character, use, and width of the acquisition. Requirements and declarations must also be announced already in the advertisement of the bidding process. Those bidders who do not meet the set requirements have to be excluded from the process. Chapter 9 of the act provides further guidance on subcontracting. Section 62 states inter alia that the acquisition unit must define in the call for offers the requirements set for subcontracts. It may require that the offerer states in the offer, which part(s) of the contract it will subcontract to third parties, the content of subcontracts, and the chosen subcontractors. Section 63 confirms that the acqusition unit may set requirements concerning the financial situation, technical performance capability, professional qualifications, information security, security of supply, and quality also to subcontractors.

Further general guidance acquired from the Ministry of Defence via information request specifies, for instance, the general principles followed in acquisition (competitive bidding, equality, openness, proportionality, confidentiality, systemacity, cost-efficiency) unless the nature of the acquisition requires deviation from them, as well as the necessity to consider the environmental aspects of an acquisition and possibly its security of supply implications. However, it does not provide further requirements from the bidders in terms of compliance programmes or business conduct programmes. [2] Currently, an update process of the instruction is ongoing. [3]

There is not enough evidence to score this indicator, as Finland does not currently provide requirements from the bidders in terms of clear anti-corruption compliance programmes or business conduct programmes.The Act on Public Defence and Security Acquisition, Chapter 2, Sections 6, 7 and 8 depict the situations to which the act does not apply, including e.g secret acquisitions and intelligence acquisitions. [1]

In addition, there is evidence that at least suspected involvement in bribery abroad has not prevented Finnish defence industries from selling to the Defence Forces. An example of such suspected bribery case abroad was the initial conviction of two Patria daughter company’s (currently named as Patria Land Oy) former executives in 2015 in a district court in Finland. The case involved bribery to the representatives of the state of Croatia in selling AMV armourd vehicles to the country between 2005 and 2008. The company itself was given corporate fines. [2] In 2016, a court of appeal converted the conviction i.e. rejected the charges due to lack of evidence. Also the corporate fines were cancelled. [3] Patria remains one of the main suppliers to the Finnish Defence Forces.

Article 45 of Order n°2015-899 of July 23, 2015 on public procurement [1] states that people/companies guilty of the following crimes – sale and trafficking of drugs, money laundering, forgery and use of forgery, criminal conspiracy, terrorist acts, corruption, embezzlement – are excluded from public procurements. Article 46 addresses Defence and Security Procurements in particular: are excluded from public procurement all people/companies who have been found guilty of violating professional secrecy, endangering State’s security (including by breaking the national defence secret), or have been sentenced for manufacture and trade in weapons. In addition, the public procurement code (“Code de la commande publique”) includes provisions to exclude companies with a history of bribery – or for bribing during the process – from bidding. [2] However, no formal procedures require compliance programmes or certain standards of business conduct from subcontractors to be awarded contracts by the Ministry of the Armed Forces. [3] There is some evidence that companies must provide proof of their compliance with “social, tax and criminal legislation” – which would include anti-corruption and compliance standards in line with Sapin II – but no evidence of formalised procedures as part of the procurement process could be found on this subject. [4]

The implementation of the new set of policies originating from Order n°2015-899 of July 23, 2015 began in 2016. In the period since, it is hard to assess whether many suppliers were excluded from bids for compliance reasons. The French Anti-corruption Agency (AFA) created by “Sapin 2” law of December 2016 seems to show an effort to promote compliance efforts in private companies. [1]
As far as strategically important suppliers go, they seem to be exempt from this new compliance scrutiny: Dassault, Thalès, and Safran have been sentenced to hundreds of millions of Euros in fines for various crimes including corruption, favouritism, influence-peddling, [2] [3] and the Airbus Group is currently being investigated for corruption by the US Department of Justice, [4] but the Ministry of the Armed Forces keeps on doing business with these key French defence and security companies. [5]

The required procedures and standards for companies are listed on the website of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw). Procedures are based on the Customer Product Management document and the specific information that companies must provide is listed in the bidding documents and can vary depending on the type of procurement project. This usually includes information about security, reliability, general conditions and definitions for cost prices [1,2]. Anti-corruption clauses can be required according to Article 12, subsections (1) and (2) of the ‘Federal Government Directive Concerning the Prevention of Corruption in the Federal Administration’, the latter of which states that private companies have to work under the standards defined in the Directive in accordance with Article 1, subsection (1) of the ‘Act on formal obligations for non-permanent civil servants’ (‘Verpflichtungsgesetz’) [3,4].

According to an essay by Krohn and Schneider, ‘there are no specific rules regarding eligibility for defence- and security-related contracts, with two exceptions noted below. Generally, suppliers are considered eligible for public contracts if they meet the requirements of professional suitability, financial and economic standing and technical or professional ability set by the contracting authority for the contract in question, and if they are not debarred from public contracting for one of the reasons provided by EU general procurement law (such as certain criminal convictions, gross professional misconduct and non-payment of taxes and social security contributions). In the case of defence and security procurement, a tenderer may also be excluded if it is judged to lack the reliability needed to protect public security interests. For contracts involving access to classified information at the level ‘confidential’ or higher, contractors must fulfil certain security requirements’ (p.13) [5].

The essay continues: ‘there are no specific requirements regarding supply chain management. However, the standard terms and conditions of the German military include specific commitments by the contractor to ensure the security of supply in the event of a crisis (if applied to the particular contract). Moreover, the contracting authority may, on a case-by-case basis, impose requirements it deems reasonable to secure the security of supply. In addition, while the contractor may, in principle, freely choose its subcontractors, the contracting authority may reject subcontractors on the basis of the same criteria that apply to the primary contractor. The contracting authority may also require the contractor to subcontract up to 30% of the contract value to third parties and to apply competitive tendering procedures when selecting subcontractors. There are no specific rules regarding anti-counterfeit parts for defence and security procurements’ (p. 13) [5]. Furthermore, the ‘German public procurement law is based on EU law and the GPA, which prohibit any discrimination on the grounds of nationality. However, this only applies to contractors from the EU, EFTA and member states of the GPA. That said, there are no rules providing for more favourable treatment of contractors from any particular country’ (p. 14) [5].

Furthermore, ‘contractors must generally certify that their directors, officers and responsible employees have not have been convicted of certain criminal offences, including corruption and money laundering. This may involve individual certifications by the directors, officers or employees in question, or excerpts from the national judicial records on the relevant individuals. For contracts involving access to classified information of the level ‘confidential’ or higher, personal security clearances are required for the owners, managing directors and relevant employees of the contractor. This involves personal security checks on these individuals in accordance with the Act on Security Clearance Checks. The same applies to personnel working in particularly sensitive military areas’ (pp. 15-16) [5].

For more detailed information, please see the ‘Procurement Ordinance for the Defence and Security Sector implementing Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain construction, supply and service contracts in the defence and security sector and amending Directives 2004/17/EC and 2004/18/EC 1’ [6].

While there is some evidence that these policies and laws are implemented, including for strategically important suppliers, it is more difficult to assess how consistently they are implemented [1,2]. For instance, public contracts can only be submitted to competent persons. In addition, powerful companies that are not governed by the provisions of law against unfair competition are excluded. The exclusion rules refer to final convictions of responsible employees or fines, e.g. for fraud, bribery, corruption or money laundering. The reasons for exclusion are examined, the ‘self-cleaning’ measures taken are determined and, where appropriate, an order block is imposed – depending on the reasons for exclusion, either by Unit BMVg R II 6 or by the procurement authority responsible for the award in question. If there are indications of economic damage to the Bundeswehr, for example due to corruption-related or economic offences, Unit BMVg R II 6 examines them via administrative inquiries and, if necessary, forwards them on to the relevant public prosecutor. For this purpose, Unit BMVg R II 6 works closely with various agencies of the Federal Ministry of Defence and the subordinate area and maintains regular contact with prosecutors and law enforcement agencies nationwide [3].

It should also be noted that, owing to the presence of monopolists in the defence market in Germany, suppliers can become ‘too big to fail’ and the Government may be less likely to enforce sanctions and anti-corruption standards. In response to a parliamentary inquiry into what contractual penalties the BMVg had included in the procurement agreement with Rheinmetall and Krauss-Wegmann Maffei for the severely delayed Puma (a mechanised infantry combat vehicle), the BMVg stated that ‘Contractual penalties are not included in the procurement contract [of the Puma] as, due to the monopoly position of the contractor, these were not enforceable during contract negotiations’ [4]. This underlines the risk that anti-corruption standards will not be enforced as the Government is heavily reliant on a limited number of suppliers which dominate the market.

The Public Procurement Act details how the government discriminates in its selection of suppliers based on their integrity. In particular, section 22 states that a tenderer in public procurement shall have directors or officers who have not “(i) [been] convicted of any criminal offence relating to their professional conduct or to making false statements or misrepresentations as to their qualifications to enter into a procurement contract, within a period of ten years preceding the commencement of the procurement proceedings; or (ii) [they will be] disqualified pursuant to administrative suspension or disbarment proceedings” (1).

Also, section 32 states that a procurement entity shall reject a supplier if “the supplier, contractor or consultant that submitted it offers, gives or agrees to give, directly or indirectly, to any current or former officer or employee of the procurement entity or other governmental authority, (a) a gratuity in any form; (b) an offer of employment; or (c) any other thing of service or value as an inducement with respect to anything connected with a procurement entity and procurement proceedings.” (2).

Suppliers or sub-contractors are not required to sign anti-corruption clauses in contracts with the government. They are governed by the Public Procurement Act (2003), and the Financial Administrative Act (2003) (3), (4).

There is evidence that these policies and laws are sometimes implemented concerning non-hardware items, but they are not implemented for purchases of hardware. GAF and MoD contract bids are not based on any standards applied through the law, but rather whether they ‘fit’ the single-source requirement laid out in the PPA (1), (2), (3).

There are clear requirements for the companies involved in procurement (PD 203/2008), including a registry of manufacturers of defence material [1]. Moreover, Article 10 of Law 3978/2011 stipulates that the contracting authority shall include in its contract documents a special Integrity clause according to which economic operators (or their legal representatives) who are involved in the procurement and execution of defence procurement, service or works contracts adhere to specific processes preceding the award of the contract; do not act improperly, illegally or abusively; and continue not to act in this way during the performance stage of the contract and after its termination [2]. However, companies are not obliged to have an anti-corruption programme in place.

There is evidence that these policies and laws are consistently implemented, but perhaps not always when strategic suppliers are involved [1, 2].

Most companies bidding have to register as a NATO Commercial and Governmental Entity (NCAGE). This registration requires several steps to verify transparency [1] including providing annual data. The Public Procurement Law [3] and the related Governmental Decree (321/2015) on the necessary registration and supporting documents also list several procedures necessary [2]. However, suppliers and sub-contractors are not required to show that they have a formal and publicly declared anti-corruption programme in place that adheres to minimum standards established and specified by the procurement authority [4].

When procurement is completed through an open tender these policies are implemented, for the most part. There is no problem with open tenders (e.g. procuring IT systems that for office work, procuring office furniture). However, in most cases, there is no information or evidence that policies have been implemented in recent military purchases. When military capability related procurement happens, it is not entirely clear if the Ministry of Defence (MoD) follows its procedures. As the tender process was not required it is highly unlikely that anti-corruption guarantees had to be provided by the defence companies [1]. As such, this indicator is scored Not Applicable.

Bidders and the Ministry of Defence (MoD) need to sign an Integrity Pact committing to not offering or accepting bribes, ensuring integrity in public procurement for all capital procurement/schemes of Rs. 20 crores and above. Submission of Integrity Pact Bank Guarantee (IPBG) is needed. The Seller must confirm and declare to the Buyer that it is the original manufacturer of the stores contracted and that no third party has been engaged who can influence or manipulate award of the contract, or indulge in corrupt and unethical practices. Penal provisions are included in Standard Clauses of Contract for use of undue influence including engagement of agents. Violation of the Pre Contract Integrity Pact (PCIP) may result in cancellation of the contract, encashment of bank guarantee and debarment from future procurement. Vigilance status of L1 vendor before seeking Competent Financial Authority (CFA) approval is also prescribed in the Defence Procurement Procedure (DPP). All vendors including foreign vendors need to disclose full details of any such person, party, firm or institution engaged by them for marketing of their equipment in India, either on a country specific basis or as a part of a global or regional arrangement [1][2][3].

There is no evidence suggesting that companies are required to show that they have a formal and publicly declared anti-corruption programme in place that adheres to minimum standards established and specified by the procurement authority. As alluded to in Q. 57, bidders must adhere to the Code of Integrity for Public Procurement (CIPP). Prohibited practices in the CIPP comprehensively cover corrupt practice, fraudulent practice, anti-competitive practice, coercive practice, obstructive practice and conflict of interest. Indulgence in any of the aforementioned can lead to punitive measures such as cancellation of contracts and debarring in parallel to legal provisions that are applicable [4].

There is some evidence that the procedures outlined above are implemented. The government endeavours to ensure procedures will demonstrate the highest degree of probity and public accountability, transparency in operations, free competition and impartiality. In 2016, the CBI registered four cases of corruption in defence deals. Six firms were debarred from further business dealings with Ministry of Defence for a period of ten years. This was further made applicable to all allied/subsidiary firms of each of the debarred firms. Orders were issued restricting procurement from two firms. Two firms have been taken off from the list of restricted procurement based on a closure report filed by the investigating agency and acceptance by the Court (1)(2)(3). One cannot ascertain if procedures are consistently implemented encompassing strategic suppliers too.

Minister of Defence Regulation No. 17/2014 requires providers wishing to take part in the arms procurement process to sign the Integrity Pact, a statement that is signed on the stamp and that contains pledges to prevent and not to engage in KKN in arms procurement [1]. The Integrity Pact is the only document required in the procurement contract stating that the provider is free from corruption, collusion and nepotism and will report it if it is found in the procurement process. The signing of the Integrity Pact on a stamp makes this document legally valid and allows it to be submitted as a legal document in court [2]. Violations of the Integrity Pact can be punished by moral sanctions (i.e. exclusion), administrative sanctions, prosecution for damages and penalties in accordance with the provisions of the applicable laws and regulations [3]. There are no rules that mandate the implementation of an anti-corruption programme, i.e. a code of conduct, code of ethics, or the implementation of due diligence by suppliers towards market representatives (MR, a name interchangeably used with broker) to ensure that the marketing process conducted by the MR does not violate the Integrity Pact signed by the supplier [4]. Furthermore, the current regulations also overlook the application of the mandatory Integrity Pact in the subcontract arrangement between main contractor and its suppliers of component.

The Integrity Pact is a mandatory administrative requirement for domestic and foreign providers (see Articles 38-39 of Minister of Defence Regulation No. 17/2014) [1], which is applicable in any procurement process conducted through direct appointment, limited bidding or sole sourcing [2]. If a company fails to enclose the Integrity Pact, it will also fail to pass the document qualification stage. Violations of the Integrity Pact are punishable by administrative sanctions, blacklist sanctions, a civil lawsuit and/or criminal reporting in accordance with the relevant legislation [1]. However, the contents of the Integrity Pact are written as a company’s promise/commitment relating to a specific procurement process and do not constitute documentary evidence of a company’s history of anti-corruption activities/programmes [2]. This is demonstrated by the fact that the Integrity Pact is written in the future tense. There is no record of a prospective arms supplier declining to sign the Integrity Pact, since refusal would prohibit the company from joining the procurement bid. This does not mean the Integrity Pact is effective in discouraging corruption. There have been at least three procurement cases tainted by corruption, namely the F-16 from the US, the AW-101 from Italy and the Apache helicopter from the US [3,4,5], in which all parties involved signed the Integrity Pact. In past cases, blacklist sanctions have usually been imposed on Market Representatives, not suppliers. For example, in the case of the AW101 procurement, the brokerage company was the party to be sanctioned in court [6], while Leonardo, the supplier, was not blacklisted [7]. Leonardo has supplied Indonesia with Black Shark submarine torpedoes and Super Rapid naval guns.

There are laws and procedures that briefly describe how the government discriminates in its selection of suppliers and sub-contractors, but these relate to the quality assessment of the proposal, and whether the bidder has a license or the necessary qualifications [1]. There are no laws or procedures requiring suppliers and sub-contractors to sign anti-corruption clauses.

This indicator is marked Not Applicable, as there are no laws or procedures requiring suppliers and sub-contractors to sign anti-corruption clauses. There are laws and procedures that briefly describe how the government discriminates in its selection of suppliers and sub-contractors, but these relate to the quality assessment of the proposal, and whether the bidder has a license or the necessary qualifications [1].

While various state ministries have published specific public contract guides, ministry of defence contracts are only briefly mentioned in ‘A Guide to the Implementation of Government Contracts in Iraq’ (1). The guide identifies Tender Committees attached to each ministry as state-sanctioned bodies licensed to approve contracts, managing their own procurement needs following ‘Article 6 of Instruction No. 1/2008. In cases where contracts exceed IQD 50 million, special committees are formed who, alongside the contracting body, deliberate on which part to award the contract to. There is no explanation of the qualifications bidding firms are required to have or the legal basis on which contracts are granted. Bidder registration, as one legal source notes (2), is not required which implies relative openness for bidding firms. The general absence of facts as one interviewee told TI was down to a general policy of non-disclosure under which Iraq’s security and defence institutions operate (3). Decentralised procurement, one source breaks down (4) works in a manner in which contracting methods, tender documents and requirements are different under every ministry which results in procedural inconsistencies and contracts being reissued to bidders in spite of their poor track in delivering (4). The absence of centralised procurement mechanisms exposes, the source further explains, exposes a system bias in which contractors aligned to official employees inside institutions of the Iraqi state gain preference at times having access to “details of tenders”. As of present, there are no mechanisms to scrutinize the qualifications of suppliers as far as defence contracts are concerned, as the score chosen reflects.

Without the existence of a broader procurement strategy, it cannot be said that Iraq’s MoD and armed forces conduct compliance programmes in which contracting risks and foreseeable challenges are identified. Accessible legal guides relevant to conducting business with Iraqi ministries appear void of principles governing the behaviour of defence vendors/contractors. The absence of procedures and standards is further reflected by the scale of corruption over the past 5 years, involving bribes, extortion and shadowy firms (1), (2), (3).

Standards for companies to operate in the defence sector are set by the MoD and inclue quality assurance standards. (1). There are several committees in the Ministry of Defence in charge of approving suppliers (including in the Department of Production and Procurement, in the Directorate of Defense Research and Development and in the Department of Engineering and Construction) which are authorized to operate according to regulation 10 of the Mandatory Tender Regulations (Defence Establishment Contracts) 5753-1993, and three committees in charge of suspension of suppliers: two of the latter committees (in the Procurement Administration and in the Department of Development) can decide on an administrative suspension; and a committee in the Planning Department has the authority for non-approval or suspension relating to a criminal record and to security reasons (2). These committees are also authorized to sanction suppliers. However, there is no evidence that anti-corruption specifically is taken into account when selecting or rejecting a supplier. Nevertheless, the MoD & DECA have introduced guidelines for defence exporters that underline the importance of anti-corruption policies (3)
Major Israeli suppliers, such as Rafael, Elbit and IAI also have compliance programmes which align with Israeli Anti-Corruption Law, the OECD Anti-Bribery Convention and the Anti-Corruption Policy (4). However, this does not appear to be a legal requirement for a supplier to work with the MoD and IDF. IMI Systems Ltd, one of the major Israeli defence comapnies, does not have an openly stated anti-corruption policy or programme (5). More broadly, Transparency International rates IMI Systems Ltd’s commitment to anti-corruption as ‘low’, Elbit Systems and Israeli Aerospace Industries as ‘limited’ and Rafael Advanced Defence Systems Ltd as ‘moderate’ (6).

This indicator is marked ‘Not Enough Information’ as there is not enough substantial evidence to score this indicator. Evidence of consistent enforcement of anti-corruption standards could not be found, owing in part to how vague these provisions are and the fact that many defence and security contracts are classified. Though there are cases of suppliers being suspended from tendering (1), the lack of available evidence makes an accurate assessment difficult.

Decision 72/2013 of the National Anticorruption Agency [1] set the legal basis for the national anticorruption plan. According to the plan, the observance of integrity pacts and legality protocols form a pre-requisite to participate in biddings. Prior to this legislation, article 1.17 of law 190/2012 [2] already foresaw the possibility for the contracting authority to include clauses related to the observance of anticorruption practices. Legality protocols are also implicitly referred to, by the combined provisions of art. 32 and 80 of the Code for public procurement [3] that set the selections criteria and exclusion grounds. Finally, according to Decree of the President of the Republic 62/2013 [4], all suppliers of the public administration are subject to compliance with the code of conduct of the personnel of the public administration, including clauses on anticorruption and bribery.
Integrity pacts are to be stipulated between the company and the contracting authority prior to the determination of the bidding and contain specifications on the standards companies need to satisfy. Once the best bidding proposal is selected, the pact is attached to the contract and is legally binding. This pre-requisite applies also for subcontractors. Both contractors and sub-contractors also need to be registered to the Chamber of Commerce [5]. However, even though companies do publish code of conduct and ethic plans that include anticorruption clauses, there is no legal reference on the requirement “to show that they have a formal and publicly declared anti-corruption programme”.

The observance of policies and laws is ensured by the controls the administration carries out before the allocation of the contract. On the website of the Ministry of Defence it is possible to access the list of controls that are performed [1]. Moreover, by accessing the call for tender, it is possible to see that these requirements are included in the text [2]. Strategically important suppliers, as any other supplier, are required by law to satisfy these standards. In addition, all companies are required to comply with legislative decree 231/2001 that regulates all administrative responsibility of the legal subject, including cases of corruption [3].

In the case of Leonardo Spa, the company received certification UNI ISO 37001:2016 “Anti-bribery and Management System” in order to prevent and contrast eventual illegal practices. According to this certification, there are some additional procedures that the company needs to implement (among others segregation of responsibilities, impartiality and absence of conflicts of interest, tracking and archive of activities, clarity and simplicity of duties and responsibilities) [4]. Fincantieri is in the process to acquire the aforementioned certification [5].

Businesses that wish to participate in open competition bidding for contracts with the Ministry of Defence (MOD) must first apply to the Ministry for status as an approved bidder. [1] An approved status is valid for three years. [2] The details of what the application should contain are explained in the Ministry’s “Guidance on Bidding and Contract.” One version of this document applies to central procurement, [3] and one applies to regional procurement. According to the guidance for regional procurement, applications for approval of status should be submitted to the Accounting Section of the Ministry in the capital. [4] The rules in the two documents are basically the same, but the document for central procurement contains more details, including on what the application for status should contain. Applicants are not required to show that they have a formal and publicly declared anti-corruption program as such. However, they must commit to some anti-corruption measures. They must sign a pledge to exclude violent gangs [5] and submit a signed written document with five items on compliance. Three items deal with procedures for the correct reporting of production cost data to the Ministry in those cases where such data is used to calculate the target price in a contract. In addition, the company must inform staff of MOD whistleblower procedures and conduct internal company audits at regular intervals. [6] Company rules that do not satisfy the compliance requirements must be changed within three months of submitting the document. [7] All compliance requirements must also be met by subcontractors as well. [8] A further condition included in the Guidance, which will contribute to preventing corruption, is that companies that have prevented fair trade during the last three years will not be eligible to bid for work for the Ministry. [9]

There is evidence that the content of the Guidance on Bidding and Contract is consistently implemented. The Guidance is posted on Acquisition, Technology & Logistics Agency (ATLA)’s websites for both central and regional procurement (see Q62A). It could be downloaded from a random selection of homepages of regional defence bureaus of the Self-Defence Force (SDF) that announce calls for procurement bids on February 7, 2020. [1] Enterprises that break the rules regulating procurement may be subjected to a nomination stop. On ATLA’s webpage for news reports on central procurement, there are four reports of such nomination stops of a few months’ duration. Two of these were issued by the Japan Fair Trade Commission for breach of the Anti-Monopoly Act, [2] and two were issued by the Ministry of Defence for, respectively, poor handling of confidential information during a disposal job [3] and for using deficient parts to repair auxiliary power units for airplanes. [4] In 2012, Mitsubishi Electric was subjected to a nomination stop for 11 months. [5] At that time, the Ministry was criticised for signing discretionary contracts with the company while it was banned from submitting tenders to calls for competitive bids. [6] None of the four enterprises that were subjected to nomination stops in 2015 and after entered into procurement contracts with the Ministry while this measure lasted, although three of them received contracts with the Ministry a few months after the disciplinary measures ended, as shown by an examination of contracts signed in the relevant periods. [7] Furthermore, the engineering companies KYB and Sumitomo Precision Products had to pay arrears and a penalty, in addition to paying back excesses they had charged the Ministry in padded invoices. [8] No reports about not taking action against companies that broke procurement rules were found in the mainstream newspapers Asahi Shimbun [9] and Yomiuri Shimbun. [10] The websites of the nine regional defence bureaus also have lists of companies subjected to nominations stops for a few months. On April 12, 2020, a total of 3 procuring enterprises, all in Okinawa Prefecture, (as well as 248 construction companies in various regions), were subjected to this measure. [11] In addition, the same two construction companies were listed on several of these pages because a cease and desist order, that had been imposed on them because they had relations to violent gangs, had been lifted. [12] No problem with compliance with the Guidance on bidding and contract was mentioned in the Inspector General’s Office’s report of its 2018 regular defence inspection. [13]

In relation to procurement, Jordan has Military Supplies Law No. 3 of the year 1995, which sets out procedures in relation to the defence procurement cycle [1]. In addition to this system, Military Works Law No. 4 of the year 1995, sets out specific procedures for tendering in relation to construction work required by the armed forces [2]. Neither of those laws suggest that companies must have compliance and business conduct programmes to be able to bid for work for the Ministry of Defence or the armed forces. The Ministry of Finance has its own regulations represented by Tenders Regulations No. 1 of the year 2008 [3]. The regulations only apply to government departments and agencies intending to make its purchases through the Ministry of Finance’s Tenders committee. This service provided by the Ministry of Finance appears to be optional and not all governmental departments and ministries are expected to resort to it. In addition to that, even the Ministry of Finance’s regulations only require that bidders are registered and certified as traders or manufacturers by the Ministry of Trade and Industry. This demonstrates that none of the tender departments seem to have regulations that require bidding companies to have compliance and business conduct programmes to be able to bid for work [4]. In addition to that, defence contracts are not made public, and there is no evidence of any transparency in relation to actual contracts. None of the laws that apply to defence include any policies regarding minimum standards that sub-contractors and suppliers must adhere to before bidding for government contracts.

This sub-indicator has been marked as Not Applicable, as there is no evidence of standard procedures for companies to follow as a condition to submitting a bid to any governmental department, including the defence sector [1]. As established in 62A, there is no evidence to suggest that there are procedures and standards that companies are required to have, such as compliance programmes and business conduct programmes, in order to be able to bid for work for the Ministry of Defence or armed forces.

All entities who bid for work in the Ministry of Defence are subject to the Public Procurement and Asset Disposal Act (PPADA). Section 55 of the PPADA Regulations 2020 contains details on ‘Eligibility to bid’ including adherence to tax obligations, having not been debarred from engaging in procurement activities, and having not been convicted of corruption or fraudulent activities. [1]

Section 47 of the PPADA on the self-delclaration form requires bidders to self-declare that they shall not engage in corruption or fraudulent practices. An additional oversight mechanism, besides self declaration that was introduced with the PPADA Regulations 2020, was the feature in the e-procurement system in section 62. In e-procurement process, the system will be able to automatically recognize procurement processes under review and any related disputes lodged before the Review board. Any tender and bidder under review will be suspended until the review is determined. This means that any bidder who is currently under review would be automatically barred from bidding in other tenders as long as they are cleared under review by the board.

This is a valuable tool in preventing or blacklisting bidders who have in the past engaged in fraud practices from engaging other bids. Experts have noted that one setback is that the Regulations have not specified the timeline within which the e-procurement system would be implemented by the National Treasury. [2] Recent tender advertisments still indicate that bids are still being received outside the e-procurement system. [3]

There is limited evidence to indicate that the Ministry of Defence follows regulations set out in the Public Procurement and Asset Disposal Act No.33 of 2015 (PPADA) with respect to companies biding for contracts. [1] In the past, disputes determined by the Public Procurement Regulatory Authority have shown that the Ministry of Defence (MOD) has violated regulations of the act that require, for instance, that tenders are awarded to suppliers who have been determined to have been substantially responsive, provided lowest evaluated tender, and they are qualified to perform the contract satisfactorily. [2]

In addition, the use of restricted tendering combined with the deep levels of secrecy meant that defence procurement activities were not always made available for public scrutiny and MOD would also be able to withhold information legally from the public. [3] Furthermore, the introduction of the PPADA Regulations 2020 added extra layers of scrutiny and transparency to procurement processes in general, and for national security organs like KDF in particular.

For instance, the repealed Act notes that procurement entities using restricted tendering need to abide by regulations under Section 102, that require entities to fulfill the following among other requirements: to procure goods and services from pre-approved list of known suppliers and service providers; advertise the tender on the state portal declaring their intention to uses restricted tendering three days before the process begins; and, more importantly, the Act has also limited the amount of expenditure that can be spent in restricted tenders to KES 30,000,000 or c. $300,000. Any tender above this amount will be have to be procured using open tendering. [4] This potentially limits national security organs from using restricted tendering to award lucrative tenders.

Despite the PPADA requiring procurement processes to be done online, recent tendering processes by MOD show that they are still using offline systems such as inviting bidders to bid using paper and manual systems. [5] This means that it is challenging for regulating agencies to monitor such processes.

There are no specific procedures or standards in the current legislation for economic operators to bid for procurement activities for the Ministry of Defence or the Kosovo Security Forces. With regards to the criteria for awarding contract, the Regulation on Procurement for Defence and Security Purposes states that contracting authorities may choose to award the contract based on price, to be economically beneficial [1]. In addition, the Regulation stipulates that the general procurement rules should be used for preparing the procurement dossier [2]. This means that provisions foreseen by the Law on Public Procurement will be applicable to tender dossiers for procurement activities related to defence and security purposes in Kosovo.
Based on the Law No. 04/L-042 on Public Procurement in Republic of Kosovo, an economic operator shall not be eligible to participate in a procurement activity or in the performance of any public contract if the given economic operator (or any employee, executive, manager or director thereof) fulfils any of the following criteria: i) participated in any part of the preparation of the given contract notice or tender dossier [3]; ii) received assistance in preparation of the tender [3]; or iii) presents a conflict of interest [4].
Furthermore, an economic operator is not eligible to participate in a procurement activity or in the performance of any public contract if they (or any executive, manager or director thereof), has, in the past ten years: i) been judged by a court to have committed a criminal or civil offence involving corrupt practices, money laundering, bribery, kickbacks or activities described of this law, under the laws and regulations applicable in Kosovo or any country, or under international treaties or conventions [3]; ii) been declared ineligible; iii) been judged by a court to have taken part in illegal operations [3]; iv) been judged by a court of administrative agency to have engaged in unprofessional conduct [3]; vi) been judged by a court to have abused any public authority in Kosovo or elsewhere [3].
In addition, the Law on Public Procurement stipulates that an economic operator is not eligible to participate in a procurement activity or in the performance of any public contract if such economic operator: i) has, in the past two years, been bankrupt or insolvent, or is currently about to declare a state of bankruptcy [3]; ii) is being dissolved or administered [6]; iii) has in place an agreement or arrangement with its creditors to amend terms of payment due to being unable to satisfy obligations [3]; iv) is currently the subject of a judicial or administrative order which may result in the total or partial loss of the economic operator’s right to administer and/or dispose of its property [3]; v) is currently the subject of legal or administrative proceedings that may result in a judicial or administrative order [3]; vi) has, in the past three years, been judged by a court to have seriously breached a contract with any public entity, public authority or public undertaking in Kosovo or elsewhere [3]; vii) is currently not satisfying the payment of any social security or tax contributions in Kosovo or its of establishment [3]; viii) is more than ninety days’ delayed in the payment of any wages owed to employees or in the payment of any amount owed to a public service operator in Kosovo [3]; ix) has not yet complied with an order issued by a court of Kosovo, the Procurement Review Body or a review panel [3]; x) has a place of business in Kosovo but does not have a current and valid certificate of registration issued by the public authority responsible for registering business organisations in Kosovo [3].
In order to be suitable for a procurement activity, an economic operator must disprove all the above through certificate, attestation or other sufficient evidence [4].
Apart from these requirements, the current Law on Public Procurement determines that a contracting authority should state in the contract notice and specify in the tender dossier all selection criteria that an interested economic operator is required to meet in order to be considered qualified [5]. These selection criteria should ensure that only economic operators possessing the professional, financial and technical ability necessary to fulfil the terms of contract are considered qualified to receive a contract award or an invitation to tender [6]. All documentation and information is requested by the contracting authority to verify that the concerned economic operator: (i) is eligible under Article 65 of this law, and (ii) if applicable, satisfies the minimum selection criteria specified in the contract notice and the tender dossier [7].

It is challenging to assess the implementation of these measures determined by the legislation on public procurement in Kosovo, because monitoring reports of the Public Procurement Regulatory Commission (PPRC) are not publicly available. In fact, there are monitoring reports from 2008 to 2015 have been published; however, recent reports covering 2016 onwards are not published on the PPRC’s website [1]. Further evidence on this reporting is gathered by Civil Society Organisations that monitor these public procurement organisations.
Where there are doubts that economic operators might submit false information or forged documentation, the contracting authority makes a request to the Procurement Review Body (PRB) to disqualify that economic operator from participating in procurement activities for a specified period [2]. The decisions to disqualify economic operators are categorised as blacklisting by the PRB [2], stipulated by the Law on Public Procurement which authorises the PRB to review and disqualify an economic operator from taking part in procurement activities up to a period of one year [3].
During the period from June 2018 to May 2019, contracting authorities requested the PRB to blacklist twenty economic operators, but the PRB only approved one of these requested, rejecting the other nineteen [2]. In 2017, contracting authorities requested forty-one operators to be blacklisted, and only seven of these requests were approved by the PRB [2].
The most common reason for the PRB to reject the requests of contracting authorities is that the contracting authorities have not evidenced that economic operators submitted false evidence or falsified documents in the procurement activities [2]. The requests that were approved were mainly due to operators not providing their tax clearance certificates, or possessing tax debts [2].
For instance, in 2018, the Ministry of Defence demanded from the PRB to disqualify an economic operator from a procurement activity related to the Ministry, due to the economic operator’s failure to provide a tax clearance [4]. The representative of the economic operator first stated that they were not in Kosovo and could not provide the tax clearance certificate on time to the Ministry of Defence; but it also transpired that the economic operator still had unpaid taxes [4]. And, according to the Law on Public Procurement, an economic operator is not eligible to participate in a procurement activity or in the performance of any public contract if it is currently delinquent in the payment of any social security or tax contributions in Kosovo [4]. However, the Ministry could not provide enough concrete evidence that the economic operator submitted false data or falsified documents, and therefore the PRB surprisingly rejected the request made [4].
Civil Society Organisations have found that even economic contractors who were blacklisted by the PRB applied and were awarded tenders despite technically being prevented from participating in procurement activities [2]. It is therefore assumed that, despite decisions made to blacklist economic operators, this measure is neither effective nor efficient [2].

There are no publicly available procedures or policies which detail how the Government discriminates in its selection of suppliers and subcontractors. State auditors, who are often kept in the dark about weapons procurement, say that they are told that there are internal laws but they are not given access to this code and they are given limited or no information on their purchases (1, 2 and 3).

This sub-indicator has been marked Not Applicable because it is unclear whether the security agencies have policies and laws that regulate how the Government discriminates in its selection of suppliers and subcontractor (1, 2 and 3).

There are formal policies and procedures explaining which companies could be discriminated against and on what grounds, covered by two main laws used in the defense sector: the Public procurement law and the Law on public procurements in fields of defence and security (LPPD). [1] [2] According to the government reviewer, elimination criteria (including corruption, money laundering, fraud, etc.) for non-compliant bidders are clearly stated in both laws – Clause 44 of PPL and Clause 42 of LPPD.

Consistent implementation of the two main laws: the Public procurement law and the Defence and security procurement law – is ensured by monitoring how these laws are respected and implemented by the MOD, [1] the Procurement monitoring bureau [2] and industry as well. If companies identify any breach of legislation and procedures they can file a complaint. [1]

Decree no. 11574 dictates the general conditions and requirements for companies eligible to apply for tender with the LAF (1). Although it does not require the tenders to show that they have a formal and publicly declared anti-corruption programme, they need to submit documents that ensure their eligibility such as clearance from the NSSF, registration certificate at the Ministry of Finance, etc. (2)

Contracts and reports are not publically available (1). So, it is unclear to what extent the laws are implemented (1). However, according to sources, the LAF is strict in the implementation of laws and regulations (2), (3).

The process of public procurement in defence is regulated by the Law on Public procurement in the defence sector. According to this law, companies that wish to bid for work from the Ministry of Defence or for the armed forces are not required to have compliance programmes or business good-conduct programmes [1]. However, contracting authorities are obliged to set up a purchasing commission that consists of at least three individuals of impeccable reputation. Purchasing organisations specify qualification requirements, evaluation criteria, conditions, etc. [1]. However, purchasing organisations may reject companies if the supplier (neutral person) or the Head of the supplier (legal person) has an unspent or uncompleted conviction; or if a trial was held for participation in a criminal organisation, formation or being in charge thereof, for bribery, bribery of an intermediary, graft, fraud, use of a credit and etc. and ruled against the supplier within the past five years [1]. The Public Procurement Office publishes a list of unreliable suppliers (“black list”). Suppliers are black-listed by contracting authorities and the Public Procurement Office administrates and publishes the black list online [2,3]. The Special Investigation Service also developed an Anti-Corruption Manual for Business in 2016 and updated it in 2018. However, this document is not binding and there is no evidence that it has been used by companies in the defence sector [4].

In accordance with current laws, there are no requirements for suppliers to show that they have a formal or publicly declared anti-corruption programme [1,2]. The Public Procurement Office publishes and administrates the list of unreliable suppliers through a black list. The latter is a live document and the Office may include new companies in the case of improper execution of contracts by the supplier [3]. The Special Investigation Service’s Anti-Corruption Manual for Business is not binding and there is no evidence that it has been used by companies in the defence sector [4].

Malaysia does not have a law that discriminates in its selection of suppliers and sub-contractors on the basis that they have a formal and publicly declared anti-corruption programme in place. However, local companies that would like to bid for any government projects or procurement process must register with the Ministry of Finance (MOF). [1] [2] There is also some evidence that companies that are awarded MINDEF contracts must sign an integrity pact, [3] however it is not clear whether this is codified by a law or formal procedure/

There are no specific procedures or policies whereby companies must formally sign anti-corruption clauses in contracts with the government. [1] As such, this indicator is scored ‘Not Applicable’.

Most defence-related purchases are exempt from standard procurement regulations which severely undermines the efficacy of the existing legislation with regard to the military.
Article 8 of the Code des Marchés Publics et des Délégations de Service Public says: “This decree does not apply to contracts for works, supplies or services when they relate to the needs of national defence or security, which require secrecy or for which the protection of essential national interests is incompatible with the publication of such contracts. The system under which these contracts operate is fixed by decree of the Council of Ministers”.¹ In practice, the Code cannot be used as a reference to answer this question. There are no laws to govern procurement exempt under Article 8.
Nevertheless, in the instances where the Code is deemed applicable, the law imposes clear legal obligations on companies tendering for public contracts. Article 3 of the Code sets out the fundamental principles of public procurement processes. Among them are:
– free access to public contract tenders
– equal treatment of candidates
– transparency of procedures, and through that, the rationality, modernity and traceability of procedures.¹
Moreover, article 29 is dedicated to mitigating the risks of corruption. Entitled, “De l’engagement de la lutte contre la corruption” (Concerning the commitment to fight against corruption), the article stipulates that:
“Offers and submissions must contain a commitment by the candidate or tenderer to:
– neither grant nor promise to grant to any person involved in the process of awarding a contract an improper advantage, financial or otherwise, directly or via an intermediary, with the intention of securing the contract.
– inform the contracting authority of any payment, advantage or privilege accorded to the benefit of any person, acting as an intermediary or an agent, to recompense them for any service provided.
– to respect, in general, legal provisions, notably those outlawing acts of passive corruption or trading of favours or any constituting offences of this nature”.¹
But given the lack of published defence contracts (see Q61), it is impossible to say whether corruption related provisions are included in such contracts.
Articles 27 and 38 state that the contracting authority can oblige bidding companies to provide certificates of qualification and to meet certain pre-qualification criteria to be eligible to submit tenders. But there is no explicitly mentioned requirement that companies must have robust anticorruption procedures in place.

Since article 8 of the code enables defence-related purchases to circumvent the regular procurement standards, military acquisitions are rarely subject to such robust requirements.1
In April 2018, opposition party Parena claimed to have gained access to an unpublished BVG report, which identifies numerous cases of overspending and dubious activity in military procurement.² The report apparently shows that the government paid 3.5 billion CFA in cash for a used Super Puma helicopter from Ireland and did not conform with the most basic procurement standards.² These claims were also reported by a journalist, who had also seen the unpublished audit, in Le Républican newspaper.⁸
The purchase of the presidential jet in 2014 for 18.59 billion CFA also did not comply with the standard procurement standards. 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, which allows for certain acquisitions to be off-budget (see Q29A).3,6
But the BVG also found that 1.4 billion CFA of the total cost represented commissions and fees paid to a broker linked to IBK’s friend and French mafia figure Michel Tomi.⁷
In late 2016, the maintenance contract for the presidential plane was stripped from AMAC Aerospace and awarded to KLM UK Engineering (KLMUKE), a UK-based subsidiary of Air France Industries. As one media report notes “Repair costs rose in some cases over 500%. For example, the Malian government pays 839 million francs for a “D-check” maintenance visit with KLMUKE, compared to 153.8 million it paid for a D-check with AMAC”.⁷ This deal clearly did not comply with article 75 of the Code, which states that price should be the priority when awarding public contracts.⁷
There is also substantial evidence showing that the MDAC regularly uses imprest accounts as a way of purchasing items without having to comply with procurement requirements. In 2014, the IMF noted that:
“The execution of exceptional expenditures is subject to very minimal controls considering the amounts involved. In general, funds are released without prior proofs and receipts. The payment of the advance is subject to simplified controls, focusing primarily on the identity of the payment authorization officer and the amount of the advance. Control of the compliance of the expenditure being carried out, based on supporting documentation for the payment, takes place after the actual disbursement of the funds to a supplier or service provider”.⁴
The IMF also states that there are numerous deficiencies in the controls carried out, “particularly with respect to the imprest accounts of the defence and security forces in Mali”.⁴ It adds that “some imprest accounts receive quite substantial advances that go well beyond their original purpose of ‘minor operating expenditures’. For example, the special imprest account of the Ministry of Defence carries out monthly expenditures exceeding 2.3 billion CFA”.⁴ None of this spending is subject to standard procurement requirements.
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).⁵ Defence contracts are not subject to open and competitive tenders: instead they are often awarded to family members or close associates of defence officials.⁵ The acquisitions and sales of fixed assets are not supported by any justification or assessment of needs.⁵

The Public Sector Acquisitions, Leasing, and Services Law, also applicable for SEDENA and SEMAR, states that “acquisitions, leases, and services will be awarded, as a general rule, through public tenders, by public call, so that they can freely submit proposals in a closed envelope, which will be open publicly, in order to assure the State the best conditions available in terms of price, quality, financing, opportunity, economic growth, job creation, energy efficiency, responsible use of water, optimisation, and a sustainable use of resources, as well as protection of the environment and other pertinent circumstances, in accordance with the provisions of this Law.” [1] Likewise, the Law states that the contract will be awarded to bidders whose offer is solvent, complying with the legal, technical, and economic requirements established in the call. [2]

In this regard, companies are not required to show whether they have a formal anti-corruption programme, nor are they required to sign clauses on this matter. [3] [4] [5]

This indicator is marked ‘Not Applicable’ because there are no policies which require anti-corruption standards in defence procurement contracts. The Ministry of Public Function is carrying out actions to improve public contracting, focusing mainly on the performance of public servants and not of companies. [1]

In the same sense, in a study on integrity in Mexico, the OECD recommends “implementing cooperation agreements with private sector actors, as well as declarations of integrity in order to reduce the risks of corruption in the framework of the public procurement.” [2] [3]

Based on the information provided, bidders are not required to have any policies, codes of conducts etc, and it is unlikely that anti-corruption clauses are included in contracts – this can be also corroborated by referring to the MoD’s own report on integrity building. [1]

According to the MoD reviewer, the Law on Public Procurement prescribes conditions for participation in public procurement procedures relating to bidders and subcontractors. Each contract must contain an anti-corruption clause (Integrity Pacts), on the nullity of the contract in violation of the anti-corruption rule, and all persons in the public procurement procedure must sign a Statement of Non-existence of Conflict of Interest acccording to Articles 16 and 17 of The Law on Public Procurement, the essential content of which is that there is no economic or any other interest that may jeopardize the objectivity of participants in public procurement procedure. New Law on Public Procurement has a whole section on this matter (Section 2. Prevention of Corruption and Conflict of Interest), and Article 40 of the Law regulates the Obligation to Prevent Conflicts of Interest: „The contracting authority is obliged to take appropriate measures to effectively prevent, identify and eliminate conflicts of interest in connection with the public procurement procedure.“ Also, depending on the subject of the procurement, potential bidders are expected to demonstrate professional, technical and personnel eligibility for the tender conditions through the fulfillment of the requirements according to different standards. [3]

The Rulebook on the manner of keeping record violations of anti-corruption rules prescribes the procedures for keeping the records on this matter. However, the Law on Public Procurement clearly states that implementation, reporting, and keeping records on procurements exempted from the Law (in defence and security sector) are regulated by the Government decree. [1][2]

The Code of Public Procurement Contracts in its revised version exempts defence procurement contracts from a number of transparency requirements (1)(2).

However, special requirements apply to defence procurement contracts:
– Art. 25.A.2.e and Art. 50.II.a.3.e: the candidate must prove its nationality as well as the nationality of its directors for contracts relating to defence or public security, if the contracting authority requires it.
– Art. 97.7: the candidate architecture company and the architects must prove their nationality if the contracting authorities require it.

None of these requirements concern compliance or business conduct programmes in relation to integrity beyond what is generally required in company law.

No further evidence of integrity requirement was found in other sources, such as the e-gov platform, activities of the national committee against corruption or parliamentary works. This might indicate a lack of transparency which in itself could imply corruption risks (3)(4)(5).

Since there are no laws or procedures detailing how the government discriminates in its selection of suppliers and sub-contractors, this sub-indicator is marked Not Applicable.

There are no laws detailing standards or procedures for defence procurement. There may be procedures for defence procurement, but these are not available to the public. A military contractor said that there is no requirement to sign an anti-corruption clause [1,2].

There are no laws detailing standards or procedures for defence procurement. As such, this indicator is marked ‘Not Applicable’.

The Ministry of Defence does not require companies to have a formal and publicly declared anti-corruption programme in place in order to bid for tenders. However, the Ministry of Defence (and the government more broadly) does discriminate in its selection process on the basis of integrity. The Procurement Act 2012 stipulates that the contracting authority (e.g. the Ministry of Defence) must take measures to effectively prevent and identify corruption and conflicts of interest during the procurement procedure [1]. The Act additionally states that a registration to bid for a tender is inadmissible if it demonstrably involves unauthorised agreements or corruption [1]. When doing business with the MoD, further terms and conditions apply which cover corruption activities. The General Government Purchasing Conditions 2018 (ARIV 2018), the General Government Terms and Conditions for IT Contracts 2018 (ARBIT 2018) and the General Government Terms and Conditions for Public Service Contracts 2018 (ARVODI 2018) all contain provisions banning bribery (gifts, rewards, compensation or benefits of any form) and state that this activity may constitute grounds for (partially) cancelling a contract [2,3,4].

Further, the information provided online by the Ministry of Defence for suppliers of means of transport shows that the Defence Movement and Transport Organisation always conducts an assessment and screening of a company before doing business with them [5]. However, it is not known how widespread this practice is across the defence sector or whether corruption and integrity are issues that are screened for. The COID is currently working on a project with the MoD’s execution and policy departments to address this topic further and make procedures more explicit [6]. This project committee is chaired by the Chief of Defence, Admiral Rob Bauer, signalling that the topic is a priority for the MoD.

Though public procurement in the Netherlands draws significant public scrutiny, media reports do not suggest that there is a widespread problem with corruption amongst suppliers to the Dutch defence force. However, one example shows how rules and guidelines on integrity can occasionally be bypassed for strategically important suppliers. In 2013, the Dutch Ministry of Defence (MoD) knowingly continued contracts with companies known to be corrupt. During the Iraq mission, food catering was handled by a company called Supreme, despite the fact that the company pleaded guilty to deliberate fraud during the American Public Prosecution Service’s case against it and that a report was made to the COID stating that the company was defrauding the Dutch MoD [1].

All companies are required to comply with relevant New Zealand commercial law, public law, and sector specific legislation [1]. Suppliers must also be aware of the Government procurement principles, charter, and rules, which include stipulations on ethics and anti-corruption (see previous Questions). In addition, the Supplier Code of Conduct outlines expectations when providing goods and services to the government, and covers ethical behaviour, labour and human rights, health, safety and security, environmental sustainability, and corporate social responsibility [2]. Suppliers must make their subcontractors aware of this code. More specifically, the Supplier Code of Conduct expects that suppliers do “not engage in any form of corruption” [2]. Monitoring the Supplier Code of Conduct is the responsibility of the contracting agency, which means no independent oversight body or mechanism exists [2]. Suppliers are encouraged to demonstrate their adherence to the Supplier Code of Conduct through a range of evidence, “including policies and practices, certifications and accreditations”. However each agency determines how the code is applied, as long as it meets the Government’s existing Rules, Principles, and Charter, and existing legislation [3]. Similarly, no universal policy of enforcement exists if a supplier does not meet these expectations, as it is dependent on stipulations within individual contracts. The agency, in this case the MoD or NZDF, may determine the consequences, which in the extreme may result in a company being blacklisted from procurement opportunities as per Rule 44 of the Government Procurement Rules (though it is unclear whether this is limited to Defence contracts or Government-wide tenders). If serious wrongdoing is proved, through evidence, then the agency should report the case to the Serious Fraud Office [3,4].

The Ministry of Defence’s template contracts, which are provided at the time of request for tender, contain anti-corruption and anti-bribery clauses which contains obligations to comply with all laws relating to anti-bribery and anti-corruption and not engage in any activity, practice or conduct that would constitute an offence under the Anti-Bribery Laws. However companies are not required to show that they have a formal and publicly declared anti-corruption programme in place.
Due diligence activities involve looking closely at company policies as they relate to ethics and anti-corruption. Due diligence is also done on major sub-contractors and key equipment suppliers. [5].

In conducting its annual reviews and audits for the years 2015-19, the OAG has raised no serious concerns around contractor compliance in its briefings to the FADTC [1, 2, 3, 4, 5, 6, 7, 8, 9, 10].

The Nigerien government has adopted legislation detailing how it selects suppliers and sub-contractors. The legislation also includes anti-corruption standards for the main contracts or subcontracts throughout the supply chain. Chapter III (Art. 6-12) of the 2013 Decree provides for specific requirements for companies to work for the Ministry of Defence. In particular, Art. 6 identifies different cases when companies are not allowed to work for the Ministry (paragraphs “a” to “i”) (1). These are standard conditions that are also mentioned in Art. 22 of the 2016 Decree (2). When engaging in the procurement process, companies are required to sign a “letter of engagement” (3) which is based on the code of ethics regarding public procurement (4). The letter mentioned above prohibits the following: “Corruptive activities regarding public agents engaged in the procurement; fraudulent manoeuvre [sic] in order to obtain the contract; illegal agreement; unjustified cancellation of the contract execution on the acceptance of the bid; failure to respect the subscribed commitments” (3). Without prejudice to penal sanctions, the “engagement letter” provides for administrative sanctions. Bidding for a contract with Niger’s Ministry of Defence requires compliance with Articles 6–13 of the decree.

Given the confidentiality of the content of the procedures (1), it is difficult to determine whether contractors and sub-contractors of the Ministry of Defence are screened to comply with the standards listed in Articles 6–13 of Decree No. 2013/570/PRN/PM. However, according to indirect evidence (such as the State Inspectorate General control in 2016) (2), it appears these policies are implemented.

Given that the process is shrouded in secrecy and that the PPA 2007 does not apply, there are no laws or procedures disclosed to the public, which detail the selection criteria and requirements for anti-corruption clauses in defence contracts with the government (1). The selection of contractors does not follow any transparent process and in many cases are determined by key individuals in the agencies concerned without any public oversight or quality assurance processes (2). In discussions with a source, it was confirmed that the requirements of the PPA are applied to bidding companies (3).

Because there are no policies for compliance of contracts, this indicator is marked Not Applicable.

Details of expenditures of the Nigerian Defence Budgets are not disclosed. As such, all the “Security Votes” accrued to the various state governments are never accounted for because the executive governments are not compelled by law to do so. How and what they do with the “Security Votes” is their business, and no one should ask questions (1). It follows that there is no consistent implementation of any policies that exist.

The procedures and standards that the companies are required to have in order to work for the Ministry of Defence and the Army of the North Macedonia, are prescribed in the Law on Public Procurement [1]. The required standards, in particular the financial and technical capabilities of the companies, are determined in accordance with the extent and the value of the bid [2].
In general, to prove its legal and financial integrity, a bidding company has to present:
– a statement proving no involvement in corruption activities over the last 5 years (Article 146)
– a statement proving that the contracting subject has not been prosecuted or sentenced for corruption activities,
a certificate of paid taxes and any other public benefits,
a certificate from the Penalty Registry of any criminal offences,
a certificate from the Penalty Registry proving that no penalty has been imposed to the bidder for participation in public call procedures, awarding public procurement contracts or public-private partnership contracts,
a confirmation that the bidding party has no history of bankruptcy or liquidation,
a confirmation that the bidding party is neither convicted nor has a restricting ban for performing any professional activity (Article 147).

In addition, to prove its professionalism, the bidder needs to present a document showing registered activity and an appropriate license as a condition for performing the activity according to the law.
To prove its economic and financial standing, the bidder needs to present a report on its company’s financial balance and its portfolio (Article 148).
Compliance and quality standards are regulated in accordance with European and international standards (Article 155).
If one of the above criteria is not met, the Law stipulates the contracting party need be excluded (Article 169).
All these integrity standards contain demonstrate a strong support of anti-corruption. Indeed, although it is not legally required for the bidding company to have any publicly declared anti-corruption programmes, the anti-corruption standards of the Law are permeate the integrity standards.

The procedures for bidding and awarding public procurement are strict and announced using the Electronic System for Public Procurement (EPPS). The use of the electronic system is mandatory for all published listings. Tenders are submitted for approval to the Public Procurement Council as a control mechanism in order to ensure open and fair competition but also to ensure anti-corruption standards are maintained [1]. Thus, avoiding these required anti-corruption certificates is practically impossible. In addition, contracting authorities, including the Ministry of Defence, have the option of publishing a prior indicative notice to the bidders on the website of the Bureau of Public Procurement [2]. At the top of the website, the 2012 amendments of the Law on Public Procurement outline the requirement to publish a contract notice for contracts below €5,000; a technical dialogue sheet for contracts above €130,000; and a 6-month suspension application to re-launch annulled tenders. Moreover, any black-listed economic operators are to be excluded from participation in future tenders for 1 to 5 years [3]. In sum, the anti-corruption measures are incorporated in the Law on Public Procurement and highlight proactive measures that minimise and mitigate this risk of corruption.

Vendors wishing to sell to the Norwegian defence sector must meet certain standards. These standards apply to vendors’ corporate social responsibility, environmental responsibility and financial responsibility, as well as their anti-corruption efforts and overall corporate governance [1]. Information on what procedures and standards are required for suppliers and sub-contractors to the defence sector is included in the Acquisition Regulations for the Defence Sector Defence (ARF) [2]. According to §3-2 of the ARF, all companies bidding for contracts to the defence sector worth 1.1 million NOK excl. VAT (approximately 100 000 US dollars) or more are obliged to have compliance programmes or have implemented procedures to prevent corruption and trading in influence, for instance internal control procedures, ethical guidelines or a whistleblower channel at the least [3]. §4-1 of the ARF states also that the Ethical Statement for Suppliers to the Royal Norwegian Ministry of Defence with Underlying Agencies is a mandatory attachment to all contracts to the defence sector worth 1.1 million NOK excl. VAT (approximately 100 000 US dollars) or more [4]. The Ethical Statement imposes anti-corruption due diligence on suppliers to the Norwegian Ministry of Defence. The suppliers are obliged to exercise good business practice and respect the Ethical Guidelines for Contact with Business and Industry in the Defence Sector [5]. They have also to provide information on manpower, who has been employed in the MOD or underlying agencies in the last 2 years (starting from the offer due date); if the business is bankrupt or the subject of proceedings for a declaration of bankruptcy; if the business (or its employees) has been convicted of any offence concerning its professional conduct or offence against criminal acts; and if the business (or its employees) has been guilty of grave professional misconduct (for example breach of obligations regarding security of information). Breach of provisions included in the Ethical Statement may lead to rejection from delivering offers to the Ministry of Defence and underlying agencies. The ARF does not specify if the Ethical Statement is also applicable to sub-contractors. The only explicit reference to subcontractors in the regulation concerns their obligation to respect fundamental requirements of ethical trade and social responsibility, including national legislation, UN conventions and ILO conventions [2].

The Norwegian Ministry of Defence and its subordinated agencies are obliged to implement this regulation and consider measures to prevent corruption and trading in influence as an essential requirement for contracts above a certain value. If a supplier wishes to make reservations to the contract requirements, the ministry will consider each case separately to decide if the reservations are of such a character that they provide a reason for rejection. The regulation applies also to acquisitions under EEA Article 123 [1].

There are internal guidelines that put forward procedures setting out who and how suppliers and sub-contractors are selected for work contracts for the Ministry of Defence or armed forces (1), (2). However, these guidelines are old, vague and do not have any anti-corruption measures. They are not laws and can be bypassed by senior commanders or senior officers decisions in many cases (1). General anti-corruption legislation such as RD 112/2011, ‘The Law for the Protection of Royal Funds and Avoidance of Conflicts of Interests’, prohibits preferential treatment and the misuse of public funds or public office (3). However, this legislation focuses upon those employed in the public sector, there is no equivalent legislation for private companies (3). No policy details specific to the Defence Tender Board were found on institutional websites (4), (5).

This indicator has been marked Not Applicable because there are no laws or procedures outlining the standards for companies (See Q62A).

As the formal procedures concerning the minimum requirements for companies bidding for defence contracts are part of formal guidelines (not law), they can be bypassed by senior personnel, and therefore, they are not always implemented completely. Additionally, they have no anti-corruption measures (1), (2).

According to the website of the MoF, for companies that want to compete for bids, the only requirement from contractors or suppliers is to be registered with the Ministry of Economy and Finance and provide financial guarantees (1), (2). There is no evidence that contractors or suppliers sign anti-corruption clauses (1), (2).

This indicator has been marked Not Applicable because there is no evidence of policies that require contractors,and suppliers to sign an anti-corruption class. According to the website of the Ministry of Economy, the registration entails security clearance, taxation file, and bank account with a specific amount of money (1), (2).

In accordance with Section 47 of the IRR of RA 9184, all bidding documents must be accompanied by a sworn affidavit stating that the bidder does not have a conflict of interest with the procuring entity and BAC member. The bidder must then submit financial statements, ensure that it does not bribe any representative of the procuring entity, and provide a statement of all its ongoing government and private contracts [1, 2, 3].

Policies and laws have a mixed record of implementation, as evidenced by media reports on some procurement issues [1, 2, 3, 4].

The defence chapter of the Public Procurement Law defines general criteria required of companies to participate in public procurement tenders. The law also defines the conditions which preclude an enterprise from taking part in a tender bid (Article 131e). Contractors who have been lawfully sentenced for organised crime, corruption or money laundering offences are banned from entering the bidding process [1]. No self-cleaning procedure is provided.

For procurements excluded from the PPL, the MoND’s Decision No.367/MON may apply. Participation in a criminal organisation, corruption and money laundering, as well as breaking the law on preventing revolving door phenomenon are offences that lead to exclusion. No self-cleaning procedure is provided.
Contracts based on MoND’s Decision No.367/MON should include an anti-corruption clause with an obligation for the company to inform the government about convictions concerning corruption as they relate to the contract. In such a situation, the contractor is obliged to pay a penalty of 5% of the contract value [2].

These weak regulations seem to be implemented, however, the implementation is based on the declarations of contractors mainly. The contracting entities, as the Armament Inspectorate, have very limited resources and capabilities submitted declarations [1].

The Public Procurement Code specifies all qualification requirements for bidders [1] but does not require bidders to show proof of anti-corruption commitment, nor does it provide for tender specifications with anti-corruption clauses. The defence procurement regulation does not mention qualification and points to the Public Procurement Code [2]. Existing regulations are stricter concerning arms circulation, but licensing does not encompass proof of anti-corruption commitment [3, 4].

This indicator is marked ‘Not Applicable’ because there are no policies which require anti-corruption standards in defence procurement contracts. The Public Procurement Code specifies all qualification requirements for bidders [1], but does not require them to show proof of anti-corruption commitment nor does it provide for tender specifications with anti-corruption clauses. The defence procurement regulation does not mention qualification and points to the Code [2].

There is no evidence of laws or procedures detailing how the Government discriminates in its selection of suppliers. Suppliers or sub-contractors are not required to sign anti-corruption clauses in contracts with the Government. [1] In addition to this, there are clauses within procurement law which state that if goods are considered confidential in nature, procurement processes may be restricted to preferred bidders, and that the procurement process may be managed directly with a single supplier [2]. This exception makes almost all defence procurement exempt from standard procurement regulations and practices. In addition to that, defence institutions are exempt from state tender laws [3]. This indicates that it is very unlikely that Qatar has clear procedures and standards that companies must follow for them to be able to bid for defence contracts. It is safe to assume this, as there is no evidence of the existence of procurement regulations that apply to defence institutions, which constitutes a high corruption risk in defence procurement.

This indicator has been marked Not Applicable because there is no evidence of laws or procedures detailing how the Government discriminates in its selection of suppliers (see Q62A).

According to senior officers and officials within the MoD and the armed forces, such policies are not always implemented, and the mechanisms can be avoided in some cases. This gives commanders or chiefs the power to bypass the law and the implementation of policies.

No Russian law, including Federal Laws No. 44 and No. 275, stipulates any selection criteria for suppliers [1,2]. Federal Law No. 44 requires ordering parties to create and update a registry of ‘unconscientious’ suppliers, but this provision relates mainly to suppliers’ inability or unwillingness to fulfill the contract’s obligations, as detailed in Article 104 [1]. There are no anti-corruption requirements imposed on potential contractors.

This indicator is not applicable because the federal laws on state procurement and defence orders do not impose any legal anti-corruption requirements on the sub-contractors.

According to our sources, there are no laws, but internal regulations that detail how the government discriminates in its selection of suppliers and contractors. According to our sources, suppliers must be registered in a few agencies, provide documents, and sign many papers concerning third parties, quality of goods, deliverables and so on, but no mention to corruption. In some contracts, there are indications about violating the anti-bribery laws of 1993. In strategic purchases (things more than 500 million), contracts are motivated politically and therefore, its agreements and contracts are more political (1), (2), (3).

As there are no laws, this sub-indicator is marked Not Applicable. According to our sources, laws and regulations on government contractor selection criteria in the defence sector appear to be moderately implemented. However, there are still widespread violations of the contracts when it comes to third parties, receiving or giving bribes, and deliverables (1), (2), (3).

The Public Procurement Law (PPL) allows contracting authorities to define additional conditions for bidders to participate in the public procurement procedure [čl. 76]. However, the MoD’s internal regulation (Rulebook regulating public procurement procedure in the MoD and SAF and Internal Plan for Corruption Prevention) does not prescribe any specific requirements for bidders [2, 3]. In its annual integrity building action plans published since 2016, the MoD has envisaged several ways of formally requiring contractors to have anti-corruption programmes [4, 5, 6]. However, this activity was not implemented by the end of 2017 [7]. The report on the implementation of integrity building plan for 2017 states that a draft ethical code for companies doing business with the MoD will be adopted in the forthcoming period [7]. In practice, the MoD does not require that bidders/suppliers have adopted anti-corruption standards and/or compliance programmes when implementing procurement in the field of defence and security, justifying this with the fact that these do not belong to the required elements of a bid proscribed in the PPL [8].

The MoD does not require bidders to have ethical codes of conduct or compliance programmes [1]. As such, this indicator is scored Not Applicable.

Singapore government procurement processes include safeguards in the form of contractual compliance with relevant anti-corruption and procurement legislation and regulations which include strict anti-corruption clauses for companies participating in all types of state procurement activities, whether civil or defence-related [1, 2, 3]. To be eligible for a government tender, a company is required to go through a licensing and registration process that is centrally controlled and under civilian oversight. In case of companies engaging in illicit activities, including corruption, the government can cancel its registration as a government supplier and delete it from the government’s register, in effect barring it from future bidding [4]. However, there is no evidence that suppliers are required to demonstrate that a formal and publicly declared anti-corruption programme is in place.

There is no evidence to suggest that the Singapore government waives its anti-corruption policies for strategically important suppliers. Independent analysts have noted that there have been no exceptions in the government’s approach [1]. However, there appear to be exceptions to the rule for some state-owned companies, with one example being ST Engineering, which has continued to win lucrative defence contracts despite past cases of corruption by its staff [2, 3].

All bidders are required to sign the General Conditions of Contract (for all tenders in South Africa)[1]. For South African National Defence Force (SANDF) procurement, bidders are also required to sign three special bid documents, detailing their conflicts of interest [2], a declaration that no collusion has taken place [3], and a disclosure of whether the company or any of its directors were convicted of fraud, or listed as either a tender defaulter or restricted supplier by National Treasury [4].

They do not however require suppliers and sub-contractors to have a formal and declared anti-corruption programme in place.
In addition, suppliers are required to conform to the empowerment-related requirements of the Preferential Procurement Policy Framework Act [5].

There is not enough information to score this indicator. It is unclear how consistently bidders/companies are held to account in terms of compliance and business conduct [1].

Article 6 of the Defence Acquisition Programme Act states that suppliers and sub-contractors are required to submit a pledge of integrity. The pledge should include anti-corruption standards, which prohibit improper solicitations, unfair practices that obstruct open competition in bidding and unjust subcontracting. If contractors fail to comply with the pledge of integrity or engage in corrupt acts, the government can terminate the contract based on Article 48 of the Act and exclude the contractor from the list of eligible defence contractors (form of debarment) [1] In addition, those found to be corrupt are not allowed to participate in bidding for up to 2 years, according to Article 27 of the Act on Contracts to which the State is a Party. [2]

While laws and procedures discriminate against potential suppliers involved in corrupt actions, it is questionable whether the measures are implemented effectively. Although suppliers are required to submit a pledge of integrity which contains anti-corruption standards, the implementation of compliance programmes or business conduction programmes is at the suppliers’ discretion. [1] Another reason can be found in the nature of the defence industry, which is less competitive than other industries, according to an interview with a defence academic. Since there is a limited number of suppliers producing defence arms in South Korea, certain defence equipment is only available to purchase through a specific supplier. For this reason, it is difficult to ban a supplier from participating in bidding in case the supplier is the exclusive producer of a particular munition. [2]

The Procurement and Disposals Act obliges companies to meet a number of requirements, including declaring if their directors or people with decision-making authority have not been involved in “fraudulent or corrupt practices.” Furthermore, the criteria of eligibility to be a supplier or contractor include the following:
-Must have technical and environmental qualifications
-Must meet ethical standards in South Sudan
-Must have the legal capacity to enter into a contract
-Must be tax compliant [1]

As can be seen from the above, there is no obligation in the Procurement Act for suppliers and contractors to abide by a set of minimum standards on anti-corruption. In short, the Act does not oblige companies to honor anti-corruption clauses in contracts.

This indicator is marked ‘Not Applicable’. The Procurement Act 2018 only came into effect on April 26, 2019. Since then, there have been no reports of fraudulent contracting practices regarding the military or the Defence Ministry that have been made public. A review of media outlets for coverage of contracting with the military and Defence Ministry reveals nothing. [1] Sources contacted have also not heard of incidences of companies being contracted by the Defence Ministry and not abiding by compliance programs or business standards. [2]

Article 12 of Law 24/2011 prohibits contracts with people who have been formally convicted of crimes of terrorism (or activities linked to terrorism), those who are not trustworthy to rule out security or defence-related risks, and who have been formally sanctioned as a consequence of a major infraction of professional duties. It also bans people in situations described in the general law of contracts in the public sector (then Law 30/2007, now Law 9/2017) [1]. Article 71 of Law 9/2017 includes people formally and firmly condemned as a consequence of crimes of “terrorism, constitution or integration of a criminal organisation or group, illicit association, illegal financing of political parties, human trafficking, corruption in business, influence peddling, bribery, fraud, crimes against the Public Treasury and Social Security, crimes against workers’ rights, prevarication, embezzlement, prohibited negotiations for officials, money laundering, crimes related to spatial planning and urban planning, the protection of historical heritage and the environment, or to the penalty of special disqualification for the exercise of profession, trade, industry or commerce” [2]. The prohibition also applies to companies having been declared insolvent in any procedure, being subject to judicial intervention or having been disqualified; to companies that have been sanctioned for a serious infraction in terms of market discipline, in professional matters or matters of labour integration, and equal opportunities and non-discrimination against people with disabilities, or for a very serious infraction in social matters, or in environmental matters; to companies that are not up-to-date in compliance with the tax or Social Security obligations or that have incurred in falsehood related to their capacity and solvency; cases of conflict of interest with members of the Government and high ranks of the General Administration of the State, of any other incompatibility [2]. However, a significant number of contracts may be excluded from Law 24/2011 as stated in Art. 7 (see previous sections) [1].

Moreover, investigation and prosecution are not motives for exclusion. The legislation clearly specifies, in both laws and all cases, that these prohibitions apply in case of conviction by final judicial decisions (“condenadas mediante sentencia firme”). This means that between the onset of the trial to the sentence and from the appeal to the final decision over two to three years may pass, meaning that during that time companies may still get contracts, even those whose application exceeds this period [3]. All in all, there is no knowledge of any relevant military company being convicted and excluded from bidding [3].

According to an expert interviewed [3] no specific conduct requirement (apart from the exception stated below) seems to be demanded to companies bidding for contracts with the Ministry of Defence. All companies who want to bid for contracts with the Ministry of Defence need to be in the Registry of Defence Companies, but the aim is generally to gather information on the industrial, technological, and economic capacity of companies [4], and not their behaviour regarding corruption. On the other hand, a Certificate of Quality Assurance (PECAL) is often required [4]. However, no references to corruption or anti-bribing have been found in this certification [5], which appears to be related to the quality of products and services [6]. Whilst management system ISO 37001 (on anti-bribery management systems, published in 2016 [7]) is not required by law or regulation, certain companies, such as Navantia, have gotten this certification as well (in December 2019) [8].

The specifications of particular administrative clauses governing the contracts did not include any mention in any Annex or section regarding anti-corruption or anti-bribery measures or commitment until June 2020. They did not even include anti-corruption or anti-bribery as a “Tiebreaker criteria”, as it is the case, for instance, of the number of disabled people employed, a potential nonprofit character of the bidder, or proposals of social and labour measures favouring gender equity [9] (Annexe 1). The only exception today to what is mentioned is the June 2020 requested incorporation to the specifications of administrative clauses of this clause: “Code of Ethics and Conduct: By submitting its offer, the bidder undertakes during the processing of the procedure to comply with the Code of Ethics and Conduct of the personnel related to the procurement function in the Ministry of Defence, approved in Instruction 23/2020, and to his adhesion in case of being awarded. The contracting authority will require the bidder who has submitted the most economically advantageous offer to adhere to the code of ethics and conduct, by submitting the declaration of appendix III of the Code of Ethics, in accordance with the model that appears as Annex “X” (number annex according to specifications)” [10, 11].

No cases have been found of an important defence company excluded, privileged, or discriminated in bidding as per the existence of anticorruption programmes or codes of conduct. According to an expert on administrative law and on the defence sector this is not likely to happen [1].

Section 4 of Article 61 of the Public Sector Contracts Law states that the effectiveness of the prohibitions to contract that by virtue of the provisions of Article 328 of said law must be registered in the Official Registry of Bidders and Classified State Companies (ROLECE). The prohibitions on contracting a natural or legal person that is registered in the ROLECE can be consulted with a digital certificate [2]. When asked 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 ROLECE, in section “companies in a situation to contract”, with no further explanation [3]. However, on the ROLECE’s site, such information was not available [2, 4].

When interviewed, the responsible person from ROLECE confirmed that the only information that one could get was for contracting bodies. Even if it is possible to check whether a specific firm’s name is on the list of companies that can be contracted, there is no access to any other information, including whether that company was not on the list because it was not registered or because it faced prohibitions to contracting. Additionally, no information will ever be provided on the reasons why a company is prohibited from being contracted [5].

There is no evidence to suggest that Sudan’s defence organisations require the businesses they own or the businesses to which they award contracts to implement any special compliance programmes, business conduct programmes or other anti-corruption or ethics programmes. The Public Procurement, Contracting and Disposal of Assets Act of the Republic of Sudan makes no mention of such requirements [1]. GAN Integrity’s Sudan report, published on its Risk and Compliance Portal, summarises as follows: ‘Public procurement in Sudan presents companies with a very high risk of corruption. A system of patronage, cronyism and nepotism distorts the market competition’ [2].

This indicator is scored ‘Not Applicable’ because there are no policies that require anti-corruption standards in defence procurement contracts. In fact, it is likely that at least some of Sudan’s defence suppliers engage in deliberately corrupt and illicit behaviour, as evidenced by the fact that Sudan continues to acquire arms that the international community has decreed to be illegal for it to acquire. In 2020, SIPRI verified that Sudan is among the five largest arms importers in sub-Saharan Africa; only Angola and Nigeria import more [1]. Conflict Armament Research (CAR) found that, since 2015, Sudanese security agencies have illegally obtained EU-origin military items, despite an EU embargo, and that the government has increased its attempts to conceal the origin of weapons and ammunition used by its forces. CAR further verifies that Sudan ‘consistently’ works through civilian front companies to procure much of its military wares and that ‘the Sudanese government has continued and extended its efforts to conceal the origin of weapons and ammunition it uses on the battlefield, possibly to conceal violations of end-user agreements with supplier governments’ [2].

The Public Procurement Law [1] as well as the on the Law on Procurement in the Defence and Security Area [2] encompass the government and MoD’s procurement mechanisms. Both address, in a very similar fashion, the issue of provider exclusions from bids on the grounds of bribery and organised crime. Both laws also provide for contracting authorities to request judicial records from bidders to prove that they should not be excluded based on past criminal behaviour. However, this does not mean that companies must have a formal and publicly declared anti-corruption programme in place, nor is there any clear evidence that anti-corruption standards must be included in the main contract or subcontracts throughout the supply chain.

These policies and laws tend to be consistently implemented, but not always for strategically important suppliers. As noted in Q63 and Q73, the largest Swedish arms producer and exporter, Saab, has been subject to special treatment over the years e.g. by being involved in bribery cases (both recently [1] and in previous years [2]) without suffering any legal repercussions.

The current law and accompanying ordonnance on public procurement do not mention corruption risk or history, specifically as a criterion to discriminate against a supplier [1, 2]. However, Article 8 of the Bundesgesetz über das öffentliche Beschaffungswesen (BöB) states that criteria for qualification can be defined for suppliers. These criteria refer to “proof of financial, economic and technical ability to perform [“Leistungsfähigkeit”].” These criteria have to be part of the initial tender. Anti-corruption measures or standards could at least, in theory, be part of such criteria. The revised BöB from June 2019 and the revised ordinance from February 2020 came into force 1 January 2021 [3]. Article 2d states corruption prevention is one of the goals of the law. Article 11b requests measures against corruption for public procurement: The procuring agency “shall take measure to prevent conflict of interests, collusion and corruption”. Article 44e lists the violation of anti-corruption prescription as an exclusion or cancellation criteria. Article 45 defines sanctions for violations and singles out corruption as the one case when a supplier will be excluded from all federal contractors [1]. Annexe 3 of the revised Ordinance on Public Procurement (VöB) lists facts that can be required for qualification of a supplier. It lists these under 1d “Rules to prevent corruption” [2].

A search on simap.ch on tenders from Armasuisse only revealed work conditions and salary equality for women and men as criteria. Corruption was not mentioned [1]. The website of the Beschaffungskonferenz des Bundes (BKB) has a section on corruption prevention and emphasizes its importance [2]. It highlights the creation of the Interdepartementale Arbeitsgruppe Korruptionsbekämpfung (IDAG), the IDAGs report 2014-2017 [3], and the continued work on this issue. In view of the prominence, the issue has in the revised law, that came into force 1 January 2021 [4, 5] and increasingly consistent implementation can be expected. However, there is not enough evidence to score this indicator given the short timeline since the revised procedures came into force.

The defence industry in Taiwan is expected to carry out several tasks, ranging from the creation of job opportunities to building domestic deterrence capacity [1]. The defence industry is governed by the newly established “National Defence Industry Development Act”, even though several controversies still need to be sorted out [2, 3, 4]. Defence suppliers and sub-contractors are required to comply with ethical measures set out in Article 6 of the “National Defence Industry Development Act” [3]. Integrity measures for doing business with the government are regulated by the “Anti-corruption Act” and within the clauses set out in the “National Defence Industry Development Act” which include measures for confidentiality and anti-corruption [4, 5]. These ethical and juridical measures are also regulated by 1) the “Classified National Security Information Protection Act”, 2) “Criminal Code of the ROC”, 3) “Anti-corruption Act”, 4) “National Security Act”, and 5) the “Criminal Code of the Armed Forces” [3].

The implementation of integrity measures within bids for working for the Ministry of National Defence is strictly regulated by the “National Defence Industry Development Act” and “Anti-corruption Act” [1, 2]. However, there are still exceptions for strategically important suppliers [3, 4]; for example, experts have cast speculation on the on-going programme of “Indigenous Defence Submarines (IDS)” [5, 6, 7].

Under the Public Procurement Act Section 62 [2]a companies blacklisted by other countries or international institutions are automatically blacklisted in Tanzania. [1] In Section 83 (6) tenderers must “include an undertaking .. to observe the country’s laws against fraud and corruption in competing for and executing a contract.” Under the Public Procurement Act Regulations of 2013, Third Schedule, companies are required to have anti-corruption policies in place. [2] However, it is not specified whether this must occur for sub-contracts as well.

There is not enough information to score this indicator. Performance Evaluation Reports of the Public Procurement Regulatory would be the place to find such information. [1] However, these reports never cover the Ministry of Defence or national defence organs.

According to the Public Procurement and Supplies Administration Act 2017, Section 18, all suppliers and sub-contractors shall agree to refrain from corruption in procurement and, according to Section 19, all suppliers and sub-contractors must put in place an anti-corruption policy and have appropriate anti-corruption directions in relation to procurement, as prescribed in the announcement of the Anti-Corruption Co-operation Committee published in the Government Gazette [1].

According to the announcement of the Anti-Corruption Co-operation Committee on the minimum standards of anti-corruption policy for business operators in the public procurement process, business operators shall implement a formal anti-corruption policy as well as activities that prevent and suppress corruption within the organisation [2]. However, Section 7 of the Public Procurement Act states that this Act shall not apply to the procurement of armories and services related to national security by a government-to-government method or by procurement from a foreign country, for which the law provides otherwise. Apparently, there is no anti-corruption legislation for those instances of procurement that are exempted in the Public Procurement 2017 Act. This loophole in the act ensures that defence procurement could be undertaken outside the law and without relevant contractor due diligence.

According to the Public Procurement and Supplies Administration Act 2017, Section 18, an Integrity Pact must always be made in the form of a written mutual agreement between the state agency initiating the project and all business operators intending to tender proposals in order to prevent corruption in the procurement process [1]. However, some evidence shows that the policy is not consistently enforced. For instance, in June 2020, the Anti-Corruption Committee for Public Procurement allowed the military to exempt several projects from the Integrity Pact that is generally required by law (Articles 17, 18 and 19), claiming that the contracts with the vendors were in conflict with the law. This led to the decision of the Committee to exempt these projects, which was considered suspicious by the general public [2].

As argued by Wirot Poonsuwan (2017), the Public Procurement Act details how construction and supply contracts are made and administered. A form of contract, in Thai or English (with a Thai synopsis), prescribed by the policy committee plays an important role in the law, since failure to use a standard form or to comply could render the contract void and unenforceable, leading to a loss of profits for the suppliers or sub-contractors themselves [3].

However, the laws and procedures do not apply to the procurement of armories and services related to national security by a government-to-government method or by procurement from a foreign country, for which the law provides otherwise, as stated in Section 7 [1]. This loophole essentially makes this lawfully lawless.

According to our sources, some laws and regulations define clearly the procedures and the process of discrimination against companies that are engaged in corruption practices. There are standardised lists and requirements that must be met to discriminate against a company, such as the previous failure in deliverables for quality and quantity and time, if the head of the company is on trial of corruption, or if the company is accused of corrupt activities(1,2,3). Articles 177, 178, 179 of Decree n°1039-2014, dated 13 March 2014, provide that companies can be excluded from the tender in case of corruption (4). Government Decree No. 2016-498, of 8 April 2016, sets up the conditions and procedures for excluding participation in public procurement (5).

According to our sources, these laws and regulations are applied strictly in all cases (1,2,3). The Ministry of Defence declared that the rules of Decree n°1039-2014 are also applied and respected (4).

As explained before, all public procurements in the field of defence/security are conducted in line with Law No. 4734 on Public Procurement [1] and in accordance with Article 58 of this law, which emphasises that ‘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 (which regulates anti-corruption and integrity-related issues during the bidding process), for at least one year and up to two years depending on the nature of the acts or 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’ [1].

The procurements of the SSB are conducted in accordance with a regulation issued by the SSB that defines all stages of the bidding and contracting processes [2]. This regulation touches upon Articles 17 and 58 of the Public Procurement Law to address corruption integrity-related issues during the bidding process of defence procurement and authorises the Ministry of Defence and the SSB to exclude firms with integrity problems from procurements. This clearly shows that there is no specific legislation regulating defence procurement and that all those procurements are governed by civilian legislation.

Interviewees 3 and 4 suggested that there are no laws or procedures detailing how the government discriminates in its selection of suppliers and sub-contractors, but they emphasised that anybody found to have violated Articles 326, 327 and 328 of the Turkish Criminal Code, which mostly regulate espionage, disclosure of information, fraud and serious state-security-related crimes [3], is excluded from defence/security bids/tenders [4,5].

This indicator is marked ‘Not Applicable’ because there are no policies which require anti-corruption standards in defence procurement contracts. Interviewee 6 suggested that, for the urgent procurements conducted by the Ministry of Defence and some procurements conducted by the SSB that were small in terms of cost, there has been consistent implementation in terms of applying the procedures regulated in Law No. 4734 on Public Procurement and the SSB’s regulation on bidding [1,2,3]. However, he emphasised that, when it comes to those ‘politicised multi-million-dollar procurements, such as the Altay main battle tank, the TFX aircraft programme and the programme for developing domestic turbojets and diesel engines, it is not possible for the tender commission to apply all of the strict procedures that are written in the laws’ [1]. There are no reliable publicly available sources that can further support this assertion.

Section 70 of the Public Procurement and Disposal of Public Assets Act (PPDA) [1] talks about the basic qualifications of bidders. It states that a procuring and disposing entity shall require all bidders
participating in public procurement or disposal to meet the qualification criteria set out in the bidding documents, which in all cases shall include the following basic qualifications:
“(a) that the bidder has the legal capacity to enter into the contract; (b) that the bidder is not— (i) insolvent; (ii) in receivership; (iii) bankrupt; or (iv) being wound up;
(c) that the bidder’s business activities have not been suspended; (d) that the bidder is not the subject of legal proceedings for any of the circumstances mentioned in paragraph (b); and (e) that the bidder has fulfilled his or her obligations to pay taxes and social security contributions” [1]. It is not evident that suppliers and/ or sub-contractors are required to sign anti-corruption clauses in contracts with the government.

This indicator is scored Not Applicable., as It is not evident that suppliers and/ or sub-contractors are required to sign anti-corruption clauses in contracts with the government. According to the Honourable Ssemujju Nganda, defence and security institutions in Uganda are at liberty to do what they want because they are accountable to only Museveni and potentially to some of their supervisors [1].

Classified Procurement: No provisions detail how the government discriminates suppliers based on their integrity during the selection process. Business entities can become State Defence Order contractors if they are included in the register of manufacturers of products, works and services with defence purposes, procurement of which constitute state secrets [1]. The procedure on how business entities are included in the register is provided by a separate CMU Resolution and provides a list of documents to be submitted to the Ministry of Economy to be included in the register [2]. This list does not have any requirements connected to anti-corruption or integrity. State customers are entitled to de-facto discretionary select contractors (amongst those who are in the register) [1].
Non-classified procurement: The Law on Public Procurement provides in Article 17 how state customers may discriminate among suppliers [3]. In particular, suppliers can be denied if the customer has undeniable evidence that the supplier offered bribes, if supplier is included to the Uniform State Register of individuals who committed corruption or corruption-related offences, or if supplier`s official was brought to justice for a violation in the field of procurement, etc. [3]. The requirement to have an anti-corruption program applies only to those private enterprises who are bidding for contracts of 20 mln. UAH (714,000 USD) or more [subsection 10 of section 1 of Article 17].
Since the Russian aggression in 2014, Ukraine declared partial mobilization [4]. The period which starts after the start of mobilization is called the “special period” [5]. Ukrainian legislation provides additional regulations for defence procurement for this period (as well as for the period of ATO) [6]. These provisions include the possibility to place suppliers into “blacklists”, but do not provide any additional requirements related to anti-corruption and integrity.

Classified procurement: No provisions state that the government can discriminate among suppliers based on their integrity [1, 2]. Information on the particular business entity being included or excluded from the register of manufacturers of products, works and services for defence purposes, procurements of which constitute state secrets is classified in itself [3]. This means that decisions on strategically important suppliers are not publicly available.
Non-classified procurement: There is evidence that these policies and laws are consistently implemented. There is a general pattern for Ukrainian public institutions not to discriminate among suppliers based on their integrity. Prozorro indicates only a few cases of discrimination, and the majority of them are cases of suppliers not having an anti-corruption programme or a commissioner for the implementation of this programme as it is stipulated by law [4] for procurement equalling or exceeding 20 million UAH. The e-procurement system Prozzoro provides information that the MoD does not discriminate among suppliers based on their integrity [4] as of May 2, 2018. As Prozorro indicates, 145 bidders won MoD public tenders exceeding 20 million UAH.

There are no laws and regulations that describe the procurement mechanisms of the defence sector in relation to the selection of suppliers. It has been established throughout this assessment that Federal Law No. 43 of 2016 for the procurement process does not apply to defence procurement. Concerning defence contracting, Tawazun is considered the only national third party for private military companies and defence development and procurement. According to its mandates, defence contractors, awarded contracts in value of more than $10 million, must invest 60 per cent of the value of their contracts in local businesses or with domestic partners (1), (2), (3), (4). However, beyond this condition, there appear to be very few formal policies available around the minimum requirements for companies about compliance and business conduct. Even though there are no formal policies around the minimum standards for companies bidding for defence contracts, there is evidence of a UAE and US contract agreement that included a clause on corruption (5), (6), (7). As reported in the New York Times, the contract was signed between the Armed Forces GHQ (General Headquarters in Abu Dhabi) and a US-based private military contractor (Reflex Responses Management LLC) (8). The New York Times stated that, “the two parties hereto understand that no commission, remuneration or fees have been or shall be paid by way of tips, gifts, or personal payments granted directly or indirectly or otherwise by [the firm/contractor] to any officer, individual, civilian or UAE Armed Forces member, or any of the UAE governmental employees working within or outside the UAE representing a bribe or commission to ensure the signature of this contract”.

This sub-indicator is marked Not Applicalbe, as there is no evidence to suggest that there are procedures and standards companies are required to have, such as compliance programmes and business conduct programmes, to be able to bid for contracts for the Ministry of Defence or armed forces. Although evidence suggests that some contracts explicitly include anti-corruption clauses, these do not amount to procedures or standards (1), (2), (3).

There are some procedures in terms of selecting suppliers and sub-contractors on the basis of their integrity. The Pre-Qualification Questionnaire required to be completed by all those who bid to work for the MoD includes a series of questions on whether the bidder had been previously convicted of offences such as bribery, corruption and fraud [1]. Additionally, the MOD’s ‘Statement of Good Standing’ policy requires suppliers to declare previous convictions [2]. However, there is no requirement that companies have a formal compliance or anti-corruption programme [3].

Transparency International’s Defence Companies Anti-Corruption Index assesses major defence suppliers according to their commitment to anti-corruption and transparency and the standards and compliance programmes they have in place. Ten British companies are ranked in the index: three are classified as having a ‘high’ commitment to anti-corruption (BAE Systems, RollsRoyce & Serco Group), four as having a “moderate” commitment (Babcock, Cobham, Meggit & QinetiQ), two as having a “limited” commitment (Chemring Group & Ultra Electronics) and one as having a “very limited” commitment (GKN Aerospace) [4]. Both Chemring and GKN Aerospace have recently signed significant contracts with the Ministry of Defence to supply, respectively, air and naval countermeasures, and additional RAF Protectors [5, 6]. This is in spite of their limited commitments to anti-corruption and transparency.

Evidence suggests that, despite numerous allegations of corruption and bribery being made, the MoD has not excluded any companies from bidding for contracts, as reported in 2016 [1, 2]. Several media reports have highlighted concerns that ‘serious allegations of bribery and corruption have not been properly looked into, and that sufficient action has not been taken to ensure that the UK’s defence sales are held to the highest standards’ [1, 2].

The FAR prescribes that the clause ‘Contractor Code of Business Ethics and Conduct’ should be inserted in solicitations and contracts if the value of the contract is expected to exceed $6 million and the performance period is 120 days or longer [1]. The clause stipulates that the government contractors should have a written code of business ethics and conduct and that a copy of the code should be made available to each employee engaged in the performance of the contract. It also stipulates that the contract shall promote an organisational culture that encourages ethical conduct and commitment to compliance with the law. The contractor is obliged to inform the Office of Inspector General of the relevant agency if an employee, agent or subcontractor of the contractor has violated federal law through actions involving fraud, conflict of interest or bribery. The contractor is required to have a business ethics awareness and compliance programme, which provides training to employees and promotes awareness on relevant issues. The contractor must also have an internal control system which is responsible for: finding cases of improper conduct; ensuring the effectiveness of the business ethics awareness programme; managing a hotline or reporting mechanism for confidential reporting; disclosing to the relevant government agency credible evidence of activity involving fraud, bribery, conflicts of interest; and reviewing the contractor’s businesses compliance with the Code of Business Ethics and Conduct [2]. The only amendment on this in the DFARS policy is a reference to the DoD Office of Inspector General [3] and with regard to the display of hotline posters. For contracts exceeding $150,000, the ‘Anti-Kickback Procedures’ clause must be inserted in the contract [4]. There is no specific mention of anti-corruption beyond business ethics.

It is hard to assess the implementation of these policies, however, the Defence Companies Index on Anti-Corruption and Corporate Transparency (DCI), produced by TI Defence & Security, assesses companies’ commitment to anti-corruption and transparency. The largest defence industry companies in the US, Raytheon, Lockheed Martin, Boeing, BAE Systems and Nortrop Grumman, all rank highly in terms of both their commitment in general and also their ‘Support to Employees’, which includes anti-bribery training, the promotion of ethical behaviour and policies of non-retaliation against whistleblowers [1,2]. Although this does not prove that the policies outlined in 62A are consistently implemented, it does suggest that the most significant contractors do implement some standard of compliance and anti-corruption programmes.

The Public Procurement Law (LCP) details the procedures followed by public entities for contracting suppliers of goods and services [1]. In the case of the Ministry of the People’s Power for Defence, as per Article 15 of the LCP, the Defence Sector Procurement Committee (CCSD) is responsible for ensuring compliance with the requirements and processes for the selection of suppliers and contractors. There are specific legal procedures for procurement and controls and requirements with which contracted companies must comply; however, there are no specific requirements for anti-corruption commitments or the maintenance of good practices. Even the basic requirements of the LCP are not being met [2].

In accordance with the principles of transparency and competence established by the LCP, there are various forms of competition, and in order to contract with the state it is a requirement to join the National Contractors Register (RNC) and obtain the qualification granted by this register in legal, financial and technical fields. This could be seen as an effort to promote transparency of information, fair competition, and fiscal control. However, upon requiring businesses to include audits and other legal status information [3, 4], the classification criteria do not include variables that demonstrate avoidance of the misappropriation of funds, conflicts of interests, acceptance of bribes, and other malpractices.

In addition, in recent years there has been criticism of a lack of compliance with procedures and the use of exceptions whereby minimum requirements required of contractors have been waived [5]. Moreover, social organisations and press reports have documented the failure of the RNC to make information on state suppliers public; since 2017, this system has reduced the amount of information available to the public [6]. It is currently not possible to access basic company information or information detailing the purposes of contracts established with the state.

According to academic analysis, the shortcomings of administrative procedures in mitigating corruption risks have only been accentuated with the introduction of the state of economic emergency and the “Constitutional Law against the economic war, for rationality and uniformity in the acquisition of goods, services, and other public works”. Meanwhile, analysts argue that modification of the LCP allows “the elimination of any transparent process for the selection of contractors in public procurement” [7].

This indicator is marked ‘Not Applicable’. There are no required standards for anti-corruption compliance in defence procurement. There is no evidence with which to determine whether statutory requirements apply to defence procurement. At present, there have been no public calls for tenders to offer services to entities of the Ministry of the People’s Power for Defence (MPPD) [1]. Especially in recent years, there has been evidence of the creation of new military businesses seeking to provide food services, uniforms, drinks, and other goods to the National Bolivarian Armed Forces (FANB) [2]. The procedures and modalities for contracting with these new companies are unknown.

This situation does not seem to be unique to the defence sector. According to Transparencia Venezuela, 71% of companies by the state in 2016 hired with the state were not part of the RNC, indicating that established procedures were not complied with in a large majority of cases [3].

The Public Procurement and Disposal of Public Assets Act obliges suppliers to comply with the provisions of Section 28, which requires suppliers to follow a standard ethical qualification: they should not have a record of conviction in any country, they should have paid all their taxes, they should not be insolvent, and they should not be under judicial management. The suppliers should not have a history of misrepresentation, nor should they have legal proceedings pending against them [1, 2]. However, defence suppliers contracts are not publicly available or accessible; it is difficult to establish whether they have anti-corruption clauses.

There is not enough evidence to score this indicator, as it is difficult to ascertain whether the policies outlined in 62A are consistently implemented. This is partly because defence suppliers contracts are not publicly available. However, there is a perception, both in media reports and amongst some military insiders, that there is no respect for rules, let alone the capacity to consistently apply rules and regulations for procurement in the army. Furthermore, politics dominate how decisions about suppliers are handled, including their proximity to the military command, capacity to negotiate kickbacks and the ability to create unethical relations by shortlisting officers in the procurement directorate of the army and sometimes the civilian procurement personnel from the Ministry of Defence [1, 2].

This indicator is marked “Not Enough Information.”