EIB Stakeholder and Engagement Revision of NCJ Meeting Policy 2 - PowerPoint PPT Presentation

Tax Approach EIB Stakeholder and Engagement Revision of NCJ Meeting Policy 2 October, 2018 Brussels Office of the Group Chief Compliance Officer EIB – Stakeholder Engagement Meeting 02/10/2018 02/10/2018

AGENDA EIB Stakeholder Engagement Meeting Revision of the EIB Group Policy towards Weakly Regulated, non- transparent and uncooperative jurisdictions (“NCJ Policy”) EIB Brussels office: Rond-point Robert Schuman 6, 1040 Brussels 2 October 2018 ‣ 9:30 Registration and welcome coffee 10:00 Welcome word and introduction of speakers ‣ ‣ Hakan Lucius , Head of Corporate Responsibility and Civil Society Division, EIB Speakers: Gerhard Hütz , Director General and Group Chief Compliance Officer, EIB ‣ ‣ Branimir Berkovic , Head of Tax Compliance Unit, EIB Vaitiare Constantin, Compliance Officer, EIB ‣ 10.15 Presentation by the Office of the Chief Compliance Officer ‣ Setting the stage: ‣ Role of the EIB Office of the Chief Compliance Officer ‣ ‣ Recent regulatory developments in the area of taxation and the designation of non-cooperative jurisdictions for tax purposes Interim approach to the EIB NCJ Policy ‣ 10:45 Questions and answers session ‣ ‣ 11:00 Revision of the EIB Group NCJ Policy & on-going challenges Key features ‣ ‣ Practical examples 11:30 Questions and answers session ‣ 12:00 Lunch and networking ‣ 2 EIB – Stakeholder Engagement Meeting 02/10/2018

Part I Setting the stage 3 EIB – Stakeholder Engagement Meeting 02/10/2018

Introduction, EIB at a glance « The EU Bank » ‣ Finance and expertise for sound and sustainable projects ‣ Since 1958 ‣ Circa 90% of lending within the EU ‣ Shareholders: 28 Member States ‣ +/- 450 projects/year in >160 countries ‣ Largest multilateral lender and borrower (78 billion EUR total financing/raised 58 billion EUR on capital markets in 2017) ‣ Headquartered in Luxembourg - 40 local offices ‣ +/- 3 000 staff (finance professionals but also engineers, sector economists and socio-environmental experts) One subsidiary : the EIF - Risk financing targeting innovative SMEs via equity and debt financial ‣ instruments EIB – Stakeholder Engagement Meeting 4 02/10/2018

Our priorities Environment Infrastructure Innovation SMEs EIB – Stakeholder Engagement Meeting 5 02/10/2018

EIB products We help catalyse investment LENDING BLENDING ADVISING Loans Combining EIB finance Prepare, evaluate and But also: with EU budget support the (Project Bond Initiative) implementation of Guarantees projects (JASPERS) (trade financing) Higher risk projects for innovation (InnovFin) Support for public/private Equity participation partnerships (EPEC) Attracting FUNDING for long-term growth EIB – Stakeholder Engagement Meeting 6 02/10/2018

EIB Group financing in 2017: EUR 78.16bn Signatures EFTA & Eastern Enlargement Neighbours Countries EUR EUR 1 .62 bn 0 .88 bn Africa, European Caribbean, Union Pacific, South Africa Outside EU EUR 70 .24 bn EUR 1 .47 bn EUR 7 .91 bn Asia, Central and Latin America EUR 1 .99 bn Total EUR 78 .16 bn Mediterranean EUR 1 .96 bn EIB – Stakeholder Engagement Meeting 7 02/10/2018

Compliance at the EIB In line with the Basel Committee for Banking Supervision principles and EBA ‣ Guidelines on Internal Governance Independent function – reporting directly to the EIB President ‣ Under the guidance and responsibility of the EIB's Group Chief Compliance ‣ Officer (GCCO) Compliance/ reputational risk managed at the EIB Group level (EIB and EIF) by the ‣ GCCO OCCO Areas of Activity Integrity Integrity of checks on staff and Regulatory projects and governing compliance counterparties bodies EIB – Stakeholder Engagement Meeting 8 02/10/2018

Compliance framework AML-CFT NCJ Policy Framework and and Addendum procedures Internal tax Tax Good Sanctions screening Governance tool Compli- Ethics and ance risk Regulatory Codes of methodo- Conduct logy Data Procurement Protection compliance EIB – Stakeholder Engagement Meeting 9 02/10/2018

Compliance and Business Ethics  EIB Compliance Culture Change Programme  Revision of Codes of Conduct (CoCs) and Whistleblowing Policy – ongoing  Awareness Raising events, inter alia:  Seminar with René Brülhart, Vatican (September 2018),  Workshop with OECD (October 2018),  Meetings with World Bank (October 2018).  Ethics Network: EIB recently admitted as member to the UN driven Ethics Network of Multilateral Organisations (ENMO). GCCO participation at the 10th conference, in July 2018.  OCCO has an advisory role on Ethics issues EIB – Stakeholder Engagement Meeting 10 02/10/2018

OCCO’s roles in EIB project cycle Step 1 Proposal Step 7 Step 2 On a risk-based approach, strict due diligence checks Repayment Appraisal carried out by EIB Compliance EIB project Approval documentation to Management cycle Step 6 Step 3 Committee and the Board of Directors Monitoring Approval includes independent and reporting Compliance opinion (if required on a risk- based approach) Compliance monitoring at post approval Finance contract is signed (including Step 5 Step 4 stage safeguards against fraud, tax fraud, Disbursement Signature money laundering and financing of terrorism ) EIB – Stakeholder Engagement Meeting 11 02/10/2018

Before taking a decision to invest… INTEGRITY CHECKS ON OPERATIONS AND COUNTERPARTIES • Strict due diligence criteria and process • Anti-Money Laundering/ Countering Financing of Terrorism Framework and procedures • Screening for sanctions • Enhanced due diligence on NCJ operations • Tax due diligence • Compliance risk methodology • Compliance opinions on all operations outside EU • Approval process • Compliance monitoring INDEPENDENT COMPLIANCE OPINIONS EIB – Stakeholder Engagement Meeting 12 02/10/2018 02/10/2018

Dialogue and engagement with IFIs, NGOs and Lead Organisations • On- going dialogue with NGOs on EIB’s NCJ Policy Ongoing dialogue • Joint submission of CSOs on NCJ policy • MDB Private Sector Integrity Conferences with IFIs and CSOs • Benchmarking exercise with IFIs - taxes and BBP • DFI Tax symposium with IFIs and DFIs Ongoing dialogue • OECD • Global Forum with Lead • EU Organisations • FATF Engagement with EU • Follow-up on relevant EU legislative packages • Bilateral contacts with EU Commission institutions • Liaison with EP and the Council EIB – Stakeholder Engagement Meeting 02/10/2018 13

Recent regulatory developments in the area of taxation and the designation of non-cooperative jurisdictions for tax purposes 14 EIB – Stakeholder Engagement Meeting 02/10/2018

Key Developments since last stakeholder engagement seminar (November 2017) Council conclusions on EU list of non-cooperative jurisdictions for tax purposes (5 December 2017), changes January, March and May 2018 Updates of Reference Lists published by Lead Organisations Legal provisions on tax avoidance in EFSI Regulation, EFSD Regulation, ELM Decision, Financial Regulation EC Communication on new requirements against tax avoidance in EU Legislation governing in particular financing and investment operations (March 2018) 15 EIB – Stakeholder Engagement Meeting 02/10/2018