EBRD announces settlement with Mongolian companies Max Impex and Khan Altai

• The EBRD and two Max Group entities reach settlement related to corrupt practice in EBRD-financed project
• Sanction consists of a 4.5-year debarment, with certain conditions to be met for release
• Settlement reduces debarment period due to the companies’ cooperation

The European Bank for Reconstruction and Development (EBRD) has announced a 4.5-year debarment of two Max Group entities, Max Impex LLC (Max Impex) and Khan Altai Resource LLC (Khan Altai), and 22 affiliates in connection with a corrupt practice in an EBRD-financed project.

The project involves the provision of a senior loan by the EBRD to Khan Altai to finance the purchase of mining equipment in southwestern Mongolia.

An investigation by the EBRD’s Office of the Chief Compliance Officer (OCCO) found that in relation to the project and potential further financing by the EBRD, Max Impex and Khan Altai made improper payments to EBRD staff members aimed at influencing their actions. The EBRD staff members demonstrated integrity by promptly reporting the improper conduct to OCCO and returning the funds.

The debarment is part of a settlement agreement under which Max Impex and Khan Altai admitted responsibility. The debarment makes Max Impex, Khan Altai and 22 affiliates ineligible to participate in projects and operations financed by the EBRD for 4.5 years.

The settlement agreement provides for a reduced sanction in light of the Max Group entities’ cooperation during OCCO’s investigation, their admission of culpability for the prohibited practice, and voluntary restraint from participating in other EBRD-financed projects.

Under the terms of the settlement, the Max Group entities commit to improving and reporting through an independent consultant on their compliance programme and to conducting compliance audits to mitigate integrity risks across all their activities. If these companies fail to fulfil their obligations, they will remain debarred for four additional years.

The debarment qualifies for cross-debarment by other multilateral development banks under the Agreement for the Mutual Enforcement of Debarment Decisions that was signed on 9 April 2010.

About OCCO

OCCO plays a central role in the EBRD’s commitment to integrity through its mandate to investigate prohibited practices in EBRD-financed projects. More information on OCCO’s broader mandate and on the EBRD’s sanctions system are available on our website.