The European Bank for Reconstruction and Development (EBRD), a multilateral development investment bank, announced it has imposed a record six-year term of debarment on GE Power Sweden concerning a long-running corruption scheme.
“The six-year debarment is the longest to have been imposed in the history of the Bank and reflects the egregious nature of the misconduct involved,” the EBRD said. “The action also reflects close collaboration with the European Commission and the International Ignalina Decommissioning Support Fund, the donor fund that provided financing for the project.”
The debarment means GE Power Sweden (formerly Alstom Power Sweden) will not be eligible to be a Bank counterparty for six years, as of Nov. 27, 2019, to Nov. 26, 2025. The EBRD’s Office of the Chief Compliance Officer will also submit debarment of GE Power Sweden to the World Bank, the African Development Bank, the Asian Development Bank, and the Inter-American Development Bank.
“The EBRD’s decisive response in this case underscores how seriously the EBRD takes corruption, especially when it involves donor funds,” said EBRD Chief Compliance Officer Lisa Rosen.
The debarment follows an investigation in cooperation with the U.K. Serious Fraud Office and relates to a project to install flue gas desulphurisation (FGD) units at the Lithuanian Power Plant, a project financed by donor funds administered by the EBRD. “The investigation found that, from as early as 2002, representatives of Alstom Power Sweden … had conspired with another Alstom entity to manipulate the technical specifications for the FGD contract in their favor by making payments to Lithuanian government officials,” the EBRD said.
The Bank’s cooperation with the SFO also led to the successful prosecution in the United Kingdom of three individuals and one entity in relation to the misconduct.
GE Power issued the following statement following the announcement of the debarment:
“Long before GE acquired Alstom’s power businesses in 2015, the Serious Fraud Office in the United Kingdom started an investigation of an Alstom Steam project in Lithuania. GE cooperated fully with the investigation after the close of the Alstom transaction and has worked to close out legacy Alstom issues responsibly. Ethical behavior and compliance is foundational to GE’s ability to successfully operate in more than 180 markets around the world.”
Editor’s note: This story has been updated to include a statement in response from GE.