AFD // 2021 Universal Registration Document

STATEMENT OF NON-FINANCIAL PERFORMANCE 2 Fair practices

2.7 Fair practices

2.7.1 Initiatives to prevent corruption, fraud, money laundering, terrorist fi nancing and ɸ tax evasion Corruption, fraud and any form of misappropriation of public and private aid will cause long-term damage to the AFD group’s mission of acting to protect the most vulnerable populations. The same applies to any funding which, unknown to AFD and Proparco, would lead to money laundering or to the financing of terrorism. To avoid unwittingly participating in any of these violations, the AFD Group has a general policy on prohibited practices, available on its institutional website (1) , which was revised in 2020, in the form of operational procedures describing in particular the commitmentsmade by theGroup, the verification actions carried out, as well as the remedial measures likely to be taken in cases of detection of such practices. The AFD group also has guidelines for the examination of such practices. Since September ɸ 2021, AFD’s institutional website has offered any third party the opportunity to report any allegations of fraud and corruption relating to its activities. The AFDGroup implements a programme to prevent and combat corruption and influence peddling within its organisation, in conformity with the “Sapin ɸ II” Act, which became applicable in December ɸ 2016. The Group adopted an anti-corruption code (1) of conduct, clarifying the expected and prohibited behaviour of Group employees regarding the prevention and fight against corruption and influence peddling in performing their duties. The Group adopted a professional whistle-blowing system open to internal employees and external or temporary service providers working for the Group. It also mapped the risks of corruption and influence peddling, integrated into the mapping of operational risks. With regard to service providers and suppliers, in 2020 the Group developed a risk classification matrix to assess the risks of supplier corruption. The objective of this matrix is to determine the gross risk (low, medium, high) presented by these suppliers, resulting from a rating based on two axes: the financial impact of the supplier and the corruption risk index of the country where the supplier is registered. In 2021, the Group developed a procedure to enable it to identify and assess the risk of corruption associated with suppliers, from the start and throughout the business relationship with them. This procedure will come into force in 2022. In 2022, the Group will also adopt a charter as part of its relations with its suppliers, aimed at specifying the commitments expected from them or any potential subcontractors, notably in terms of ethics and the fight against corruption.

In 2022, the beneficiaries of philanthropic and sponsorship actions will also be subject to an assessment process of their situation with regard to corruption risk factors. Controls on the merits of transactions (such as the absence of accounting entries likely to conceal acts of corruption or influence peddling) were implemented in 2020. They will be completed and reinforced in 2022. Mandatory e-learning training modules, dedicated to the prevention of corruption and influence peddling, as well as an AFD group anti-corruption code of conduct, were rolled out in 2021 among employees of the AFD group and will be monitored annually by the latter. This anti-corruption and influence peddling compliance programme applies not only to AFD as an industrial and commercial State public undertaking but also to its subsidiaries Proparco, Sogefom (2) and Fisea. 2.7.2 Checks made during a ɸ projects ɸ life ɸ 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. Individuals 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 the settlement of equity investments (transfer of equity investments) are closely monitored, because they can reveal fraudulent practices. 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. This filter is also integrated into the settlement processing chain issued by AFD’s Finance Department. The objective is to ensure that no counterparty, person concerned by the controls, supplier or beneficiary of a call for tenders financed by AFD, is facing financial sanctions, or intervenes in sectors under embargo. It should be noted that when reports of prohibited practices are reported in connection with the implementation of projects, they are processed, since the end of 2018, by a dedicated function within the Compliance Department. The “Investigation” function’s main task is to investigate, in a professional and objective manner, the reports made to it by AFD group employees (called “suspicions”) or by third parties (called “allegations”) concerning prohibited practices, namely acts of corruption, fraud, anti competitive practices, money laundering and terrorist financing.

(1) https://www.afd.fr/en/combating-corruption (2) Sogefom (Société de Gestion de Fonds de Garantie d’Outre-Mer) is a guarantee fund that, at the request of banks, provides partial guarantees for loans that banks grant to VSEs and SMEs (defined according to European standards).

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2021 UNIVERSAL REGISTRATION DOCUMENT