AFD - 2019 Universal registration document

STATEMENT OF NON-FINANCIAL PERFORMANCE

Fair practices

2.7.2 Checks made during a project’s life b cycle In accordance with banking regulations, prior to beginning a project, the counterparty and any appropriate shareholders are researched in depth in order to identify the beneficial owner. Persons subject to political exposure are also identified. As part of the monitoring of project execution, the methods for reimbursing and receiving amounts of any kind, in particular dividends, and for settlement of equity investments (transfer of equity investments) are closely monitored, because they can reveal fraudulent practices. In addition, at the time of the examination, and then throughout the life of the projects, the Group provides its employees with a filtering tool which consolidates information such as the financial and commercial sanctions adopted by France, the European Union, the United States, the United Kingdom and the UN. Such screening is also included in the processing chain for payments issued by AFD’s Financial Department. The objective is to ensure that no counterparts, person concerned by checks, supplier and successful tenderer to a tender financed by AFD, is the subject of financial sanctions or is involved in sectors subject to an embargo, which the Group is required to implement. 2.7.3 Checks carried out as part of the foreign public procurement b process Foreign public procurement for contracts financed by AFD Group undergo specific checks ensuring that the various stages of the procurement process unfold under the required conditions of integrity, transparency, fairness and efficiency. These checks are published through the issuance of a notice of no objection (NNO) and are carried out ex-ante at specific stages of the public procurement process. Over and above these checks, the AFD Group imposes exclusion criteria (1) on the Project Owner, in addition to those covered by local legislation, in connection with processing and awarding contracts that AFD is likely to finance. 2.7.4 Counterparty commitments AFD Group’s financing agreements include a certain number of provisions that impose commitments on counterparties in terms of combating corruption, fraud, cartels, money laundering and terrorist financing. These provisions make it possible for the Group to suspend payments, cancel the portion of its financing in relation to which improper or non-compliant practices have been detected and demand early repayment of all or part of a loan or repayment of all or part of a grant paid.

2.7.5 Information reporting systems There are several information reporting systems within the AFD Group. Firstly, Group employees have an operating incident declaration system which collects and centralises all shortcomings identified by employees (including AML/CFT/ corruption and fraud issues). Group employees must also report, through a reporting mechanism following management reporting lines, any suspicion of irregular practices within and outside projects. The handling of these suspicions is managed by the Compliance Department in order to secure an exhaustive overview of instances encountered, and to make sure that there is a consistent response or action plan. The AFD Group’s employees also have the right to consult the Director of this department and his/her deputy directly if they believe they have identified a situation where there is a compliance risk. Alongside these pre-existing channels, the AFD Group has set up a whistle-blowing system in accordance with the requirements of the “Sapin Ǿ II” Act of 9 Ǿ December Ǿ 2016. This system came into force on 31 Ǿ January Ǿ 2019 and constitutes an ancillary, voluntary and optional warning system when an employee believes that current alert channels have not operated properly, or that there is a serious obstacle preventing their use. 2.7.6 Training of Group employees In accordance with applicable French regulations, the AFD Group ensures that all of its employees, including those of its office network, receive regular training and notifications on the risks and procedures to implement in terms of the fight against money laundering, terrorist financing, fraud and corruption. (i) these training courses are given in both e - learning and face- to-face formats. Training provided in the e-learning format on AML/CTF/corruption: in 2019 all the AFD Group employees were obliged to take the training course, i.e. 2,874 Ǿ people. The number of modules assigned to each employee depends on their exposure to the AML/CTF/corruption risk, a criterion that is assessed according to the duties performed by the employee. The annual results are as follows: 80% of employees enrolled for module M1 (2,293 Ǿ people of the 2,874 Ǿ people who enrolled) and 75% of employees enrolled for module M2 (1,628 Ǿ people of the 2,163 Ǿ people who enrolled) validated their training; (ii)face-to-face training provided on the subjects of fraud, corruption, AML/CTF: they supplement the e-learning programme and aim to offer employees access to all the regulatory and legislative knowledge required to perform their duties within the AFD Group. In 2019, 249 Ǿ employees received training by means of 25 face-to-face training courses (22 courses at the head office, and 3 regional courses in local

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(1) See Directives on procurement financed by AFD in foreign countries – April 2015: https://www.afd.fr/sites/afd/files/2017-07/Directives- Passation- Marches-Etats-Etrangers.pdf

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UNIVERSAL REGISTRATION DOCUMENT 2019