The new Anti-Corruption Law 2018 expands to regulate anti-corruption practices in private sectors and includes a new mechanism on controlling conflict of interests. For private sectors, the provisions on controlling of conflict of interest under Anti-Corruption Law 2018 apply to, among other things, public joint stock companies, and credit institutions. It appears that other private companies are not subject to the provisions on controlling of conflict of interest under Anti-Corruption Law 2018.
Under the Anti-Corruption Law 2018, conflict of interest means a situation where the interest of a company official or his/her relative have or likely to have an influence on performance of such official’s duties. Company officials who may be subject to the rules on conflict of interest under the Anti-Corruption Law 2019 include:
· Chairman of the Board of Directors, members of the Board of Director, Director or General Director, members of Board of Controller and persons holding other managerial positions who are competent to enter into the Companies’ transactions on its behalf in accordance with the company charter; or
· Other persons assigned certain duties and authority to perform such duties.
Decree 59/2019 provides for several situations where a conflict of interest is deemed to exist in public sector. A public joint stock company, or a credit institution must base on these provisions to provide a list of examples of conflict of interests. These situations include:
· Receiving money, property or other benefits of the organizations, individuals involved in their work or under their management;
· Using information gained from his/her title, authority to exploit or to serve other organizations or individual;
· Signing contracts with enterprises owned by spouses, biological parents, children, siblings or allowing enterprises owned by spouses, biological parents, children, siblings to sign contracts with his/her Companies when he/she is assigned to trade, sell goods, services or sign contracts for the Companies;
· Having spouses, biological parents, children, siblings directly benefiting from his/her assignment; and
· Interfering or negatively impacting the operation of the Companies, for personal gain.
Under Decree 59/2019, a public joint stock company, or a credit institution will need to establish:
· A conflict of interest policy for all employees and members of the Companies; and
· Internal mechanism of receiving and processing information, reporting on conflict of interest.
The Anti-Corruption Law 2018 require officials of a public joint stock company, or a credit institution to report in case he/she knows or is supposed to know any conflict of interest to a competent person.
This post is written by Quach Mai Phuong and edited by Nguyen Quang Vu.