EBRD reaches settlement with Serbian company Lotex

• EBRD and Lotex reach settlement regarding corruption and fraud in EBRD-financed project
• Sanction comprises a debarment period of 3 years and 3 months
• Debarment period was reduced on account of Lotex’s cooperation and admission of culpability

The European Bank for Reconstruction and Development (EBRD) has debarred Serbian company LOTEX GROUP DOO Beograd-Čukarica (Lotex) and its two subsidiaries for 3 years and 3 months. The settlement was reached in connection with corrupt and fraudulent practices relating to the Serbian Solid Waste Programme, under which regional waste management systems are being constructed in Serbia.

An investigation by the EBRD’s Office of the Chief Compliance Officer (OCCO) found that, in one tender procedure under the programme, Lotex engaged in a corrupt practice by making an improper payment to a competitor to secure the contract award. The payment was concealed as purported consultancy fees and was not disclosed in Lotex’s tender, thereby violating the tender requirements.

The debarment period agreed in the settlement was reduced on account of several mitigating factors, including admission of wrongdoing for the underlying prohibited practices and cooperation with the investigation.

During the debarment period, Lotex and its two subsidiaries are ineligible to participate in projects financed by the EBRD.

The debarment qualifies 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.