EBRD announces settlement with Turkish companies Göl and Gökşin

• EBRD reaches settlement with Göl and Gökşin regarding corruption, collusion and fraud in EBRD-financed projects
• Göl and Gökşin debarred for 3 years, 9 months and 5 years, 6 months respectively, with certain conditions to be met for release
• Settlement reduces debarment period due to the companies’ cooperation, admission of culpability, voluntary disclosure and other significant mitigating factors

The European Bank for Reconstruction and Development (EBRD) has announced a 3 year, 9 month debarment and a 5 year, 6 month debarment for two Turkish companies, Göl Çevre Teknolojiler Mimarlık Mühendislik İnşaat Turizm Tekstil Temizlik Proje Müşavirlik Sanayi Ve Ticaret Limited Şirketi (Göl) and Gökşin İnşaat Gıda Turizm Bilişim Tüketim Malları Pazarlama Madencilik Ve Proje Müşavirlik Hizmetleri Sanayi Ve Ticaret Limited Şirketi (Gökşin), and three of their subsidiaries. The 3 year, 9 month debarment for Göl and the 5 year, 6 month debarment for Gökşin were imposed in connection with corrupt, collusive and fraudulent practices in several EBRD-financed projects, both subject to conditional release.

An investigation by the EBRD’s Office of the Chief Compliance Officer (OCCO) found that, while Gökşin was ineligible to participate in EBRD-financed projects due to a previous debarment imposed by the EBRD for fraud, the two companies colluded to circumvent the sanction by using Göl as a means for Gökşin to continue participating in Bank projects. During this period, Göl and Gökşin arranged for Göl to be used as a front to conceal Gökşin’s involvement in eight EBRD-financed solid waste infrastructure projects in Georgia, Kazakhstan, the Kyrgyz Republic, Serbia, Moldova, Ukraine and Belarus.

In one of these projects, OCCO’s investigation also established that Göl and Gökşin had offered an improper payment to another bidder in exchange for increasing its financial offer. In another tender procedure, Göl and Gökşin had helped the same bidder to participate in the procurement process to artificially enhance competition. These actions constitute corrupt and collusive practices under the EBRD’s Enforcement Policy and Procedures.

In addition, Göl committed a fraudulent practice by failing to disclose, as required, consultancy fees to be paid to third parties in connection with tenders under several of these projects.

The debarments make Göl and Gökşin ineligible to participate in projects and operations financed by the Bank for the respective specified periods. The debarments are part of a settlement agreement under which Göl and Gökşin admitted culpability for the underlying prohibited practices and agreed to meet specified conditions for release.

The settlement agreement provides for a significantly reduced sanction in light of several mitigating factors, including the companies’ admission of culpability, as well as their cooperation and proactive voluntary disclosure during settlement negotiations, which enabled the Bank to identify a prohibited practice that had previously been unknown to OCCO and highlighted systemic integrity risks in certain other EBRD-financed projects. Göl’s sanction was further reduced in light of a period of suspension previously imposed on Göl by the EBRD.

Under the terms of the settlement, the companies are committed to developing a compliance programme and reporting on its progress through an independent consultant. They will also conduct compliance audits to mitigate integrity risks across their activities and perform internal investigations for some EBRD-financed projects. In addition, Göl and Gökşin are committed to continuing to fully cooperate with OCCO, and if they fail to fulfil their obligations they will be debarred for an additional 7.5 years.

The debarments qualify for cross-debarment by other multilateral development banks under the Agreement for 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 the EBRD’s sanctions system is available on our website.