17.09.2019

The Armenian Lawyers’ Association NGO in the scope of the “Armenia: Promoting Anti-Corruption Conduct and Reforms” Project implemented by the “Center for International Private Enterprise” (CIPE), has undertaken a commitment to introduce ACCP (Anti-Corruption Compliance Programs) in Armenian Businesses, which will promote the cultivation of corporate governance and ethics values in Armenia.

Continuing the awareness series, we present some regulations of different countries where authorities encourage the existence of legal regulations and mechanisms by which companies, who have invested ACCP with its all components, shall receive certain benefits in public procurement process.

First of all, it should be mentioned that the main document on fight against corruption, “UN” Convention on fight against corruption, provides that “Each State Party shall take measures, in accordance with the fundamental principles of its domestic law, to prevent corruption involving the private sector, enhance accounting and auditing standards in the private sector and, where appropriate, provide effective, proportionate and dissuasive civil, administrative or criminal penalties for failure to comply with such measures” /Article 12/.  In addition to this, for the execution and in compliance with states’ anti-corruption obligations in the private sector, Article 9 of the Convention sets out public procurement and public finance management.              

It is obvious that the state has a positive responsibility to reduce the number of economic crimes, and public procurement is a sector with high corruption risks. Therefore, it is mandatory for the states to set regulatory norms that will control the process of public procurement in the framework of business companies, including the possible advantages and disadvantages given to organizations during that process.International experience shows that organizations that have implemented anti-corruption policies or codes of ethics receive benefits in several ways during procurement process, both on the basis of mandatory certificates issued by private companies and on successful completion of procedures established by state agencies.For example, the General Confederation of Moroccan Enterprises issues certificates to companies that comply with nine key principles of corporate social responsibility and sustainability, including the maintenance and transparency of anti-corruption values in corporate governance. Companies can then take advantage of tax transactions further. Another example is that in the Philippines companies with ACCP gain advantages, including reduced tax audits, faster issuance of important certificates or custom transactions. Moreover, in Argentina, integrity program is a mandatory component for legal entities to be in contractual relations with state bodies. Legal entities shall implement integrity programs consisting of all the actions, mechanisms and internal procedures for promoting integrity, supervision and control, aimed at preventing, detecting and correcting irregularities and illegal acts included in this law. The Integrity Program required must be related to the risks of the activity that the legal entity carries out, its size

To put in another way, if for legal entities exists the criminal liability, and ACCP implementation can be basis for excluding a business company from criminal liability, therefore, it should be regulations that the companies with ACCP will not be subject to the same complicated procedures for participating in the procurement process as companies that do not have implemented anti-corruption compliance policies.