Conflict of interest
What is it?
Conflict can arise when an administrative body leader's decision-making abilities are influenced by personal interests, including family ties, potentially compromising the objectivity of their decisions. The presence of a conflict of interest often leads to the obligation to refrain from decision-making or even renders a particular role incompatible.
This definition, a translation from the Diccionario del español jurídico de la RAE, illustrates the elements of a conflict of interest. The situation is addressed in various areas, including financial and stock market regulations, commercial regulations, and regulations governing the functioning of the public administration or public procurement.
However, in the context of conflict of interest within the RRF field, the two fundamental rules are stated in Article 61 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council, of 18 July 2018 on the financial regulations that apply to the Union's general budget, and Article 23 of Law 40/2015, of 1 October, on the Legal Order for the Public Sector.
Both regulations require that individuals affected by conflicts of interest must abstain from participating, and that their superiors intervene in such cases.
Article 64 of Law 9/2017 of 8 November on Public Procurement and Article 11 of Law 3/2015 of 30 March on the General Administration of the Highest Officials supplement the relevant national provisions.
How EU Financial Regulation 2018 Regulates Conflict of Interest
Conflict of interest is regulated by Article 61:
1. Financial actors as defined in Chapter 4 of this Title, along with any other parties, including national authorities at any level, involved in budget implementation through direct, indirect, or shared management, as well as activities leading up to this, or audit and control, must avoid any actions that may lead to a conflict of interest with the Union. They must also take suitable actions to prevent conflicts of interest in the functions that fall under their responsibility and handle situations that could be seen as conflicts of interest.
2. If a member of staff at a national authority is at risk of a conflict of interest, they should refer the matter to their line manager. For employees covered by the Statute, the individual must refer the issue to the appropriate authorising officer by delegation. If a conflict of interest is present, the respective line manager or authorised officer, by delegation, must provide written confirmation. Where a conflict of interest is identified, the Appointing Authority or the relevant national authority must ensure the individual in question stops all involvement in that issue. The delegated authorising officer or appropriate national authority must ensure that any supplementary measures comply with relevant legislation.
3. For paragraph 1, a conflict of interest arises when the unbiased and dispassionate performance of duties by financial actors and others mentioned in paragraph 1 is impeded due to reasons like family ties, emotional attachment, political or national preference, economic gain or any other direct or indirect interest.
Article 61 of the FR 2018 applies directly to Member States to the extent that they participate in the implementation of the EU budget. Their duty to prevent and solve conflicts of interest, as stated in this article, is not reliant on the implementation of national transposition measures.
However, Article 61 of the FR 2018 is not a comprehensive regulation on conflicts of interest and their management, as it only suggests adopting relevant measures to prevent and resolve these situations. Moreover, national authorities retain the power to implement supplementary and potentially more comprehensive or rigid national regulations, as evidenced by the mention of "any additional measures in accordance with applicable law" in Article 61(2) of FR 2018. However, Commission Communication 221/C121/01 provides instructions on how to prevent and handle conflict of interest incidents in accordance with the Financial Regulation.
The definition of conflict of interest in Article 61(3) is broad, encompassing "any other direct or indirect motive of personal interest". This means that a conflict of interest can arise even if the person does not benefit from the situation. It is enough that the circumstances compromise the impartial and objective exercise of their functions.
The three key components of a conflict-of-interest scenario should be emphasised: The intervention of the hierarchical superior of the person concerned.
- That the situation may impact the impartial and objective execution of functions and subsequently, the budget's management.
- The intervention of the hierarchical superior of the person concerned.
- Once the conflict situation has been verified, the person involved must cease their activity.
Regulations pertaining to national conflict of interest Article 23, Law 40/2015, of 1 October, on the Legal Order for the Public Sector (LRJSP in Spanish).
Law 40/2015 of 1 October, on the Legal Order for the Public Sector outlines when public sector authorities and personnel should refrain from intervening in procedures and communicate the matter to their superior. The superior will then determine an appropriate course of action.
This regulation impacts all administrative processes, including those related to budget management, like awarding contracts and granting public subsidies, which are crucial legal tools in the implementation and management of the Recovery, Transformation and Resilience Plan (RTRP).
The scenarios outlined in Article 23.2 of the Legal Order for the Public Sector Law (LGJSP) are like those enumerated in the EU Financial Regulation 2018. There is no requirement for adjustment since the provisions of the Financial Regulation automatically apply if EU funds are handled.
The LRJSP standard shares fundamental components with the European standard:
- That the situation may impact the impartial and objective execution of functions and subsequently, the budget's management.
- The intervention of the hierarchical superior of the person concerned.
- Once the conflict situation has been verified, the person involved must cease their activity.
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In public procurement, Article 64 of the Public Sector Contracts Law 9/2017 of 8 November mandates contracting entities to adopt measures for forestalling and eliminating fraud, partiality, and corruption risks, as well as identifying and resolving conflicts of interest that may arise during procurement proceedings. Although the definitions are general in nature, they are like those found in other regulations currently in effect.
Article 71.1 highlights the various contractual prohibitions, including conflicts of interest in its subsections g) and h). Similarly, Article 336.1.i) requires reports on contracts subject to harmonised regulations to address any conflicts of interest that may have arisen, and the corresponding measures taken.
Article 11.2 of Law 3/2015 of 30 March, which governs the exercise of senior positions within the General State Administration, outlines situations that may lead to a conflict of interest like those mentioned for all public employees in Article 23.2 of the LRJSP.
The Basic Statute of the Public Employee (RDL 5/2015) pertains to the obligation of public employees to abstain in cases where they have a personal interest. This is to prevent conflicts of interest and to ensure that the general interest is being served in compliance with standards of objectivity, impartiality, and neutrality, among others. (Articles 52 to 54).
Conflict of Interest in RRF
What obligations do states have regarding conflict of interest?
When implementing the Recovery and Resilience Facility, Member States, as beneficiaries or borrowers of funds under the Facility, must take all suitable action to safeguard the financial interests of the Union and to ensure that funds are used for measures financed by the Facility follows relevant Union and national law, particularly regarding the prevention, identification and rectification of fraud, corruption, and conflicts of interest.
Article 22 of Regulation (EU) 2021/241 of the European Parliament and of the Council, of 12 February 2021, introduces the measures that RRF-funded countries must adopt. Furthermore, it emphasises the need for the establishment of sound internal controls to detect and recover any wrongly paid or misused amounts.
Similarly, when referring to the obligations for Member States that enter agreements to receive loans or financial contributions under the RRF, it is essential to take appropriate measures to prevent, detect, and correct fraud, corruption, and conflicts of interest in accordance with Article 61(2) and (3) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council, which outlines the financial rules applicable to the general budget of the Union.
The initial response to the demand for Regulation 2021/410, which sets out the RRF, is outlined in Order 1030/2021, of 29 September. This order establishes the Recovery, Transformation and Resilience Plan (RTRP) management system.
Article 6 of this Order addresses strengthening the prevention, detection, and correction of fraud, corruption, and conflicts of interest. It introduces two compulsory measures.
The Anti-Fraud Action Plan requires approval from all decision-makers and implementers involved in the RTRP. This obligation applies to organisations that implement the RTRP on an operational basis.
The plan to prevent fraud should detail procedures for avoiding and addressing conflict of interest scenarios as required by Article 61(1) and (2) of the EU Financial Regulation. It should be mandatory for individuals involved in RTRP implementation to sign a SACI form, informing their line manager of any potential conflicts of interest. The line manager should then make an appropriate decision in each instance.
Management bodies must conduct a risk assessment, fill out Statements of Absence of Conflict of Interest (SACI) and establish a process to deal with conflicts of interest.
What regulations develop the prevention and detection of conflict of interest in Spain?
Article 6 of Order 1030/2021 of 29 September, which establishes the management system for the Recovery, Transformation and Resilience Plan, reinforces mechanisms for preventing, detecting, and correcting fraud, corruption, and conflicts of interest. This order establishes a standard regulation for cases involving conflicts of interest, drawing from Article 61 of the EU Financial Regulation 2018 and Article 23 of Law 40/2015, on the Legal Order for the Public Sector.
The Additional Provision 112 of Law 9/2022, of the General State Budget for 2023, sets out a distinct protocol for preventing and identifying conflicts of interest, as well as guidelines on how to perform systematic and automated analysis of the risk of such conflicts in procedures that implement the Recovery, Transformation and Resilience Plan.
Order 55/2023 of 24 January outlines the systematic and automated evaluation of the risk of conflict of interest in the procedures that implement the Recovery, Transformation and Resilience Plan. This order details the Minerva IT tool, which will be used for the aforementioned analysis, its scope, and application criteria.
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Order 1030/2021 establishes general measures for the prevention, detection, and correction of conflicts of interest, which must be specified and developed in the anti-fraud action plans to be approved by all RTRP decision-making and management bodies (including instrumental ones), as well as a general SACI form.
Order 55/2023 establishes a specific procedure for analysing conflicts of interest in a systematic and automated manner. This Order, in accordance with the provisions laid down in Additional Provision 112 of Law 31/2022, defines the legal instruments, the phases of their management and the persons who, intervening in these phases, will be subject to this specific analysis. A SACI form, established by Order 55/2022 establishing the motives for this procedure, must also be signed by the persons subject to this analysis.
It is established in the Additional Provision 112 of the State General Budgets for 2023 about the Conflict of Interests
A procedure for preventing and detecting conflicts of interest. This standard outlines the procedures for systematic and automated conflict of interest risk analysis when implementing the Recovery, Transformation and Resilience Plan.
Highlights include:
The use of this SACI is compulsory for procurement and grant award procedures where the call for proposals was published on or after 26 January 2023, as previously specified.
A SACI that is not sanctioned by the Tax Customs Office Order HFP/55/2023 may be employed for the methodical and automated study of CI irrigation.
No, in principle the approved (SACI) should be used for the procedures and persons covered by the systematic and automated conflict of interest risk analysis developed in this standard.
However, the Order states that the SACI model's content is minimal. Therefore, it would be feasible to incorporate certain references outlined in the SACI model as authorised by Order 1030/2021.
What cases is the SACI approved by Order 1030/2021?
In cases where the approved model specified in Order 55/2023 is not mandatory.
The SACI, which analyses the risk of conflict of interest in a systematic and automated manner, is tailored to this task. It is noteworthy that those bound to the SACI must identify the participants involved in the procurement or grant award procedures prior to its signing.
The SACI model, as approved in Order 1030/2021, is versatile and applicable to various stages of procurement and subsidy procedures beyond the ones specified in Order 55/2023. For example, individuals involved in preparing contracts or subsidy procedures (including developing specifications, regulatory frameworks, or subsidy requests), individuals responsible for creating or signing agreements, or those managing contracts during execution, as determined by the Anti-Fraud Committees.
The SACI model's generality lies in its versatility for various aspects of RTRP implementation and the fact that, often, the SACI obligor lacks knowledge of the procedures' participants in which it is involved..
Other conflict of interest statements.
Order 1030/2021, of 29 September, outlines the management system for the Recovery, Transformation and Resilience Plan and incorporates a model commitment to compliance with cross-cutting principles in Annex IV. This model is elaborated on in section C of the Annex.
This template is intended for individuals involved in the implementation of the RTRP, including third parties such as contractors, subcontractors, recipients of orders, or grant beneficiaries.
All individuals must adhere to "upholding legal, ethical and moral standards, implementing measures to prevent and detect instances of fraud, corruption, and conflicts of interest, and reporting any violations to the relevant authorities" as outlined in the standard declaration.
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With regard to the statement of contractors and subcontractors, the Advisory Council for Public Contracts, in its directive of 23 December 2021, states that it is essential for the contractor to submit the statement, which in their case must be submitted at the same time as the creation of the contract or immediately thereafter. The same shall apply to any subcontractors. It also makes clear that these statements must be included in the procurement file once received.
On the other hand, the JCCE makes no reference to the statement of commitment to be made by the entities receiving the contracts governed by Articles 32 and 33 of Law 9/2017 on Public Contracts.
Minerva System: CI risk verification
Minerva is a data mining software tool located at the Spanish State Agency for Tax Administration. It is used to analyse the risk of conflict of interest systematically and automatically in procedures implementing the Recovery, Transformation and Resilience Plan. This tool is accessible to all decision-makers, operational entities, and instrumental entities involved in the RTRP scheme, as well as all public entities' service agents participating in RTRP implementation. Additionally, competent control bodies of the RRF can also make use of this tool.
Order 55/2023, of 24 January outlines the systematic analysis of the risk of conflict of interest in the procedures of executing the Recovery, Transformation, and Resilience Plan. The order details the guidelines on how Minerva is to be used during the analysis of the risk of conflict of interest.
The risk analysis of conflicts of interest involves using Minerva to compare the tax identification numbers, first and last names of
decision-makers in the transaction with those of natural or legal persons participating in each procedure. The natural person's first and last names, and the legal person's company name, are taken into consideration.
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The risks analysed can be grouped into three types of potential relationships that could give rise to a conflict of interest. They are marked with a red flag:
a) Corporate or managerial relations risks.
- • The decision-maker is a potential beneficiary
- • The decision-maker is a title holder of the potential beneficiary
- • The decision-maker is a trustee of the potential beneficiary
- • The decision-maker is a manager or sits on the potential beneficiary's board.
b) Risk of first- or second-degree relationship (blood/affinity) of the potential beneficiary.
- • The decision-maker is a relative of the potential beneficiary in the first or second degree.
- • The decision-maker is a relative of a title holder of the potential beneficiary in the first or second degree.
c) Commercial relations
- • Between the decision maker and the potential beneficiary there are commercial transactions.
- • There are commercial transactions between the decision maker and a title holder of the potential beneficiary.
What is CoFFEE? Relationship with preventing conflicts of interest.
It is the information system for European Funds from 2021 to 2027. CoFFEE-MMR is the application module designed to support the information system of the Recovery, Transformation and Resilience Plan.
In addition to monitoring RTRP milestones and objectives, it also supports the projects, sub-projects, and actions involved in the development of the RTRP.
In CoFFEE, we register the operations (contracts and subsidies) that aid in developing the actions outlined in the RTRP's projects and sub-projects.
Likewise, the individuals responsible for operations and assigned to analyse conflict of interest risk in the Minerva tool are registered. Minerva automatically checks if the transaction manager making the enquiry is registered in CoFFEE for the relevant transaction.
In CoFFEE, we register
(SACIs) that have been signed by operations decision-makers, as well as the documentation related to the results of risk analyses in Minerva, in accordance with
Order 55/2023.
For which cases is the risk analysis for conflicts of interest performed?
According to paragraph 2 of additional provision 112 of Law 31/2022 of 23 December, the automated and systematic analysis of conflict-of-interest risk applies to the procedures associated with implementing the Recovery, Transformation and Resilience Plan:
The operation that refers to one of these legal instruments must be registered in CoFFEE, associating it with one of the measures designed for the implementation of the projects and sub-projects that make up the RTRP.
Once registered, a reference code
(CRO) is automatically assigned to identify the transaction for subsequent processing in
Minerva. This code is only relevant for the purposes of conflict-of-interest risk analysis.
Who initiates the CI risk analysis procedure at Minerva?
Operational managers are responsible for initiating the ex-ante conflict of interest risk analysis procedure prior to the evaluation of tenders or applications in each procurement or grant award procedure and as soon as the participants in these procedures are known.
Who is responsible for operation?
The person responsible for the operation is the contracting authority or the body responsible for awarding the grant.
The Operations Manager is the only person who is authorised to carry out the analysis of the risk of conflict of interest in
Minerva.
In the case of collegiate bodies, the person responsible for the operation will be their president, as this is the representative of the collegiate body, as stipulated in Article 19 of the Law on the Legal Order for the Public Sector (LRJSP in Spanish).
In the centralised public procurement system, where the contracting authority for contracts based on a framework agreement or for specific contracts in a dynamic purchasing system is the Central Purchasing Board, the operations manager is responsible for submitting the award proposal of the entity to which the contract is addressed.
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For contracts based on or specific to the operation, the person responsible for the operation is the person responsible for the organisation proposing to award the contract, who must be registered in CoFFEE together with the operation concerned, which are essential steps to carry out the systematic risk analysis of conflicts of interest in
Minerva.
The analysis must be made at the level of the decision-makers involved in the operation at the level of the body submitting the award proposal to the Central Contracting Authority, which must sign the relevant SACI, as provided for in Order 55/2023.
How to identify who is responsible for the operation?
In the
CoFFEE app, the responsible persons for each activity are identified by the managing bodies and instrumental managers of the RTRP. A code generated by the CoFFEE application identifies each operation manager.
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Normally, it is a node (project or sub-project) Editor who requests the registration of the person in charge of the operation in CoFFEE, providing all the identification data required by the application.
Registration in CoFFEE is approved by the Node Manager.
What is the transaction reference code (CRO)?
The Transaction Reference Code (CRO) is a way to identify inCoFFEE the transactions (legal instruments) included in the different actions that make up the projects, sub-projects and instrumental projects (nodes) developed under the RTRP.
Each action may be linked to one or more operations (contracts or grants).
The CRO is referenced as a transaction code in both CoFFEE and
Minerva, once generated.
The CRO is referenced as a transaction code in both CoFFEE and Minerva once generated.
Where to get the CRO
The
CRO is obtained in the
CoFFEE app.
The first step is to register a legal instrument (a contract or a grant) in
CoFFEE for the action in question. CoFFEE will automatically assign a unique transaction code to this legal instrument, if it is marked in the application as "Requires conflict of interest check".
When the operations manager initiates an enquiry in Minerva, the system automatically verifies in CoFFEE that the manager is authorised to make the enquiry on the CRO stated in their report request. If the check is positive, the consultation process will begin in Minerva.
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The flag "requires conflict of interest check" is only used for contracts and grants, which are the only legal instruments for which Minerva performs a systematic conflict of interest risk analysis.
In the case of agreements, transfers of own resources or other legal instruments that may be used for the implementation of the RTRP, this field shall not be marked.
What is the role of the project/sub-project Managing Body in the conflict-of-interest risk analysis procedure?
This entity collaborates in the identification of the person responsible for the transaction in the
CoFFEE app, as well as in the generation of the transaction reference code
(CRO). These are necessary steps to perform the conflict-of-interest risk analysis in Minerva.
The project/sub-project management body shall be informed of the results of the conflict-of-interest risk analysis carried out.
Who are the decision-makers?
In
Order 55/2023, of 24 January, the persons involved in the procedures for awarding contracts or grants at the various stages referred to in the aforementioned Order are referred to as the decision-makers of the operation.
A systematic and automated analysis of the risk of conflict of interest is carried out for these persons, who are required to sign the declaration of absence of conflict of interest
(SACI) regarding the procedure in which they participate.
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In the case of contracting procedures, the decision-makers are the single-member contracting authority and the members of the contracting authority panel and the members of the panel supporting the contracting authority.
In grant awarding procedures, the body responsible for awarding grants and the members of the collegiate bodies assessing applications.
What is the role of line managers?
The line manager is the head of the body or unit in which the decision-maker is integrated, with powers to direct and coordinate.
If the result of the conflict-of-interest risk analysis is positive (red flag), the operations manager will inform the line manager. It must decide, justifying its reasoning, whether the
Decision-Maker concerned by the red flag should proceed or abstain from proceeding.
The line manager may ask the
anti-fraud committee, via the operations manager, for its report on the decision-maker concerned before deciding on the matter.
Finally, it is the responsibility of the line manager to make a reasoned decision on the conflict that has arisen, with regards to the case and any advice that may have been given. The role of the hierarchical superior is regulated in this sense both in the EU Financial Regulation 2018 and in Law 40/2015 on the Legal Order for the Public Sector, as well as in
Order 55/2023.
What do the Anti-Fraud Committees do?
The anti-fraud committees are set up with the anti-fraud action plan, which must be approved by all entities, decision-makers or executors and facilitators, in order to ensure and declare that the RTRP funds have been used in accordance with the applicable rules in their area of operation, in particular with regard to the prevention, detection and correction of fraud, corruption and conflicts of interest. (Article 6, Order 1030/2021 of 29 September).
Their responsibilities include the management and maintenance of the plan, the approval of criteria and guidelines for action, the monitoring of approved measures, the development of the plan and its review conducted periodically.
In the framework of the procedure for resolving any red flags that may arise in the conflict-of-interest risk analysis, they must issue a report on their resolution, at the request of the person responsible for the operation, and may, where appropriate, request the advice of the IGAE's Specialised CI Advisory Unit (SCIAU), for the preparation of the aforementioned report.
What is the purpose of the Specialised CI Advisory Unit (SCIAU)?
This unit was established by
Additional Provision 112 of Law 31/2022 of 23 December, of the General State Budget for the year 2023, which, in its section 9, provides for the creation, within the General Intervention of the State Administration, of a specialised unit to advise on the analysis of the risk of conflict of interest.
The advisory role of this unit is limited to informing the
anti-fraud committees, which are consulted in the development of the procedure to be followed in the event of a risk of conflict of interest (red flag) being identified by the Minerva IT tool (article 6.3 of Decree HFP 55/2023).
The consultation is carried out on the website of the “Intervención General de la Administración del Estado” assigned to the SCIAU, using the
form provided to the Anti-Fraud Committees.
Other SCIAU functions include:
- Promoting best practice in avoiding and preventing conflicts of interest
- Developing practical manuals to help anti-fraud committees and managers identify and manage conflicts of interest.
- Reporting in advance on policies or procedures to avoid conflicts of interest.
Ex-ante CI risk analysis procedure.
To which administrative procedures does the systematic risk analysis of the CI apply?
El procedimiento de análisis sistemático y automatizado del riesgo del conflicto de interés en los procedimientos que ejecutan el Plan de Recuperación, Transformación y Resiliencia (PRTR) se llevará a cabo en los procedimientos de adjudicación de contratos y de concesión de subvenciones vinculados a la ejecución del citado PRTR, a fin de verificar la ausencia de conflicto de interés entre los miembros de los órganos de contratación y de concesión de subvenciones, y los participantes en los citados procedimientos en las diferentes fases del mismo, en los términos establecidos en la disposición adicional centésima décima segunda de la Ley 31/2022, de 23 de diciembre, de Presupuestos Generales del Estado para 2023.
How is CI risk analysis performed?
It is carried out by using the
Minerva, data mining software tool, based at the Spanish State Tax Administration Agency, which is made available to all decision-makers, executing, and facilitating entities participating in the RTRP, as well as to all those working for public entities participating in the implementation of the RTRP and the competent control bodies of the RRF.
The analysis consists of comparing the personal data (NIF) of the persons
(decision-makers) involved in the award of contracts and grants with the personal data (NIF) of the participants in these calls for tenders or calls for grants to check that there are no family or business links between the members of the two groups.
When is the CI risk analysis procedure initiated?
Before evaluating the tenders or applications in each procedure, the persons responsible for the operation shall initiate the procedure for the ex-ante analysis of the risk of conflict of interest, in accordance with
Order No 55/2023, of 24 January, and shall have access to the Minerva app, in which they shall enter the data necessary for carrying out this analysis.
What information is needed to start the analysis procedure in Minerva?
The transaction manager accesses
Minerva and identifies himself with his NIF, by means of an electronic certificate or through the key system, and then identifies the transaction to be analysed by means of the transaction reference code
(CRO).
The information to be entered to perform the CI risk analysis is:
- The tax identification numbers of the persons subject to the analysis (decision-makers of the operation), together with their names and surnames (list of decision-makers).
- The tax identification numbers of the natural or legal persons involved in each procedure, together with their first names and surnames in the case of the former and their company name in the case of the latter (list of potential beneficiaries).
Who is subject to CI risk analysis?
A systematic and automated analysis of the risk of conflict of interest shall be carried out in each procedure for persons performing the following or similar functions:
With contracts, the single member contracting authority, members of the collegiate contracting authority, and members of the collegiate body assisting the contracting authority.
For subsidies, the entity responsible for granting subsidies and the members of the committees evaluating applications.
The conflict-of-interest analysis shall be carried out on such employees, whether they are part of a RTRP executing entity or RTRP facilitator. For the purposes of these procedures, they are
decision-makers in all cases.
At what stages of the administrative process is systematic CI risk analysis required?
For procurement procedures, the conflict-of-interest analysis shall be carried out at the evaluation stage of tenders, proposal for contract awarding and award of contract.
For subsidies, it will be carried out at the application evaluation and award decision stages.
Who is obliged to carry out a SACI?
Individuals (decision-makers) involved in contract and grant award procedures are required to electronically sign Statements of Absence of Conflict of Interest
(SACI) for participants in procurement or subsidy procedures. This will be done once those involved are known.
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In the case of contracting procedures, both the collegiate body and the sole contracting authority shall make this declaration only once for each bidding process, at the beginning of the first meeting. It shall be recorded in the minutes. In its Instruction of 23 December 2021, the JCCE was pronounced
What possible relationships are subject to analysis?
The
Minerva IT tool is used to analyse possible family relationships or direct or indirect business relationships between the above persons and the participants in each procedure, in which there may be a personal or economic interest that could lead to a conflict of interest.
A corporate relationship is likely to give rise to a conflict of interest if it involves actual ownership or your involvement as a director, executive officer or member of the board of directors of the company in question.
Who is responsible for initiating the CI risk analysis?
The contracting authority or the body responsible for awarding the grant shall initiate the procedure for ex ante analysis of the risk of conflict of interest. For these purposes, they are
responsible for an integrated action in a project or sub-project (including instrumental ones) of the RTRP.
In the case of collegial bodies performing the above, the analysis shall be carried out by their chairperson in their capacity as representative of the collegial body, as provided for in Article 19 of the LRJSP.
In the centralised public procurement system, where the contracting authority for contracts based on a framework agreement or for specific contracts in a dynamic purchasing system is the Central Purchasing Board, the operations manager is responsible for submitting the award proposal of the entity to which the contract is addressed.
Before starting the conflict-of-interest risk analysis, the project manager must ensure that they have received the transaction reference code(CRO) generated by the
CoFFEE app, which is necessary to start the consultation in the Minerva application.
How CI systematic risk analysis is performed.
Those in charge of operations will access Minerva by identifying themselves with their NIF using a qualified electronic certificate or the Cl@ve system. Minerva automatically checks in CoFFEE whether the transaction manager is authorised to make an enquiry for one or more transactions.
Those in charge of operations must enter the transaction reference code (CRO) into Minerva along with information about those involved in the procedures. This is necessary to conduct an ex-ante analysis of the risk of conflict of interest. The required information includes:
- The Tax Identification Number of the person(s) involved in the analysis (the person(s) making the decision(s) regarding the transaction), together with their first name and surname.
- The tax identification numbers of the natural or legal persons participating in each procedure, together with their first names and surnames in the case of the former and their company name in the case of the latter, who are participating in the same procedure as tenderers or applicants. In the case of grants with massive concurrence (more than one hundred applications), the analysis of the risk of conflict of interest is carried out in accordance with the provisions of Annex III of
Order 55/2023, of 24 January.
What results can CI risk analysis provide?
Once the data has been cross-checked, Minerva will provide the result of the conflict-of-interest risk analysis to the person responsible for the operation the day after the consultation.
The potential outcomes are:
- No red flags were found. The procedure can continue because no risk of conflict of interest has been identified.
- One or more red flags have been detected. Circumstances have been identified which appear to indicate a risk of conflict of interests. Until the red flag is removed, the procedure must be interrupted. Minerva’s output will display the tax identification number of the decision-maker in question and the tax identification number of their partner at risk of a conflict of interest (tenderer or applicant). The operations manager must bring the red flag to the attention of the decision-maker concerned and of their line manager, so that they can take appropriate action.
- One/several flag(s)/black flag(s) has/have been detected. This result indicates that the actual ownership of the applicant legal entity has not been found, which prevents the analysis of the conflict of interest. This does not mean that the ongoing proceedings will be automatically suspended. On the other hand, the black flag can occur simultaneously with either of the other two possible results, red flag or no red flag. To attempt to remedy the lack of information on the actual ownership of the applicant legal entity, the procedure provided for in Article 7 of
Order55/2023, of 24 January will be applied.
What actions should the operation manager take in response to the results of the CI risk consultation?
The entity
responsible for the operation is informed of the outcome of the conflict-of-interest analysis. In turn, it forwards it to the managing bodies of the projects and sub-projects (or their equivalent in the case of instrumental projects) in which the operation is integrated into the RTRP management information system.
Similarly, the outcome of the analysis must be communicated by the operations manager to those undergoing conflict of interest risk analysis. They should refrain from participation if a red flag has been raised regarding the existence of a conflict-of-interest risk situation for them. It shall also send this outcome to the
line manager of the relevant decision-maker.
In any event, it is crucial that the operations manager guarantees the outcomes of the analysis are documented in the
CoFFEE app to facilitate potential audits carried out by the competent RRF audit authorities.
What does "no red flags detected" mean?
It means that there are circumstances indicating a risk of conflict of interest, allowing the procedure to continue.
If one or more red flags are detected,
it reveals potential conflict of interest requiring the operation manager to inform decision-makers, and their line managers, of the red flag to halt the procedure if necessary.
The procedure must be stopped until the red flag is resolved.
If the decision-maker does not abstain, Article 6 of
Order 55/2023 of 24 January outlines the procedure to follow when a CI risk (red flag) is detected.
What procedure should be applied once a CI risk (red flag) has been detected?
The ones developed in Article 6 of
Order55/2023, of 24 January.
1) The decision-maker can abstain within two working days of identifying a conflict-of-interest risk, leading to a re-evaluation of the risk for the replacement of the abstaining person.
2) If an individual, identified as having a conflict-of-interest risk via a red flag, disputes the validity of this information with their line manager, they are required to confirm their absence of conflict of interest by promptly signing a statement of absence of conflict of interest (Annex II of Order 55/2023). The statement should accurately represent the situation and their lack of conflict. It must be completed within two working days.
In this scenario, the
operation manager must request additional information from Minerva regarding the detected risks, citing the need for this data because abstention has not occurred.
The supplementary information provided by Minerva will not reveal third-party information but will describe the risks involved. The operations manager will then convey this additional information to the decision-maker's line manager.
The line manager of the decision-maker, after considering the provided information from Minerva, the decision-maker's arguments, and possibly the
Anti-Fraud Committee’s, report, will make a reasoned decision:
- Approve the decision-maker’s participation in the procedure despite the red flag.
- Instruct the
decision-maker identified in the red flag to abstain from the procedure. In the latter case, the process will be repeated so that a risk analysis for the person replacing the abstained decision-maker complies with the established procedure.
3) If the operations manager, either voluntarily or upon request from their line manager, refers the matter to Anti-Fraud Committee, the committee must produce a report within two days, specifying whether the abstention is appropriate or not.
Additionally, the Anti-Fraud Committee has the option to request a report from the unit (SCIAU) of the General Intervention of the State Administration, as outlined in Article 8 of Order HFP 55/2023 of 24 January 2023. The opinion must be obtained within two working days, in addition to the previously mentioned timeframe.
Following this process, the operations manager is responsible for recording various documents in the
CoFFEE app. This includes the reasoned explanation of the absence of conflict of interest, any information provided by Minerva, the report from the Anti-Fraud Committee, and the decision made by the line manager. This documentation is essential for the potential audits conducted by the RRF audit authorities.
What happens if the decision maker affected by a red flag does not recognise the CI?
If the decision maker, who is flagged for a potential conflict of interest, disputes the accuracy of the identification
(red flag), they must notify their
line manager. To do so, the must reaffirm their Statement of Absence of Conflict of Interest
(SACI), form. This new form should accurately reflect the situation at hand and confirm thhe absence of a conflict of interest. It must be completed within two working days. To fulfil this requirement, one must adhere to the guidelines outlined in Annex II of
OrderHFP 55/2023, of 24 January.
What additional details does Minerva offer during a new consultation if there is no abstention?
In the event of a non-abstention during the new
Minerva consultation and the presence of a
red flag, the consultation will exclusively present a description of the identified risks, without disclosing the identities of third parties involved.
Who should resolve the situation in case of CI risk if the decision-maker does not abstain?
If there is a conflict of interest and the decision-maker chooses not to abstain, it becomes the responsibility of the decision-maker's line manager to assess the conflict-of-interest risk.
This is in accordance with Article 61(2) of Regulation (EU, Euratom) 2018/1046, commonly referred to as “FR 2018,” which stipulates that:
When a conflict-of-interest risk arises concerning a member of staff from a national authority, the staff member must report the matter to their line manager.
The line manager is required to provide written confirmation if a conflict of interest is indeed present. In such cases, the relevant authority must ensure that individual involved ceases all activity related to the matter.
Additionally, Article 6 of
Order 55/2023, mandates that the line manager of the decision-maker must make a reasoned decision, either to:
- Approve the decision-maker’s participation in the procedure despite the
red flag.
- Instruct the decision-maker identified in the red flag to abstain from the procedure.
What elements are considered for the resolution of the CI risk?
In general, the
line manager's evaluation encompasses several key elements, including the supplementary details furnished by
Minerva concerning the risk description, the
decision-maker’s areasoned objection to abstain from the procedure, and, where applicable, any report by the
Anti-Fraud Committee.
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The description of the risk identified by Minerva in the second consultation of this system may be decisive among the information produced in the development of the red flag resolution process provided for in Article 6 of Order 55/2023. The decision-maker may confirm their abstention, or the line manager may decide accordingly, in the light of this additional information.
In cases where, after exhausting the procedure provided for in Article 6 of Order 55/2023, doubts remain as to whether there is a real risk of a conflict of interest, the line manger may take into account aspects such as whether the decision-maker is a single person or a member of a collegiate body or a committee of experts, or check whether the situation to be assessed may have arisen during the handling of previous cases and, if so, how they were resolved.
When the Anti-Fraud Committee and, when deemed necessary, the specialised CI Advisory Unit become involved,
It does so when the
operations manager, either by their own initiative or at the request of the respective
line manager calls upon their expertise to report on the specific case under consideration. The
Anti-Fraud Committee has the authority to seek advice from the IGAE’s specialised unit in this regard. The preparation of the report is expected to be completed within a two-day timeframe, although this period may extend to a maximum of four days if the aforementioned advice is sought.
The Anti-Fraud Committee can submit its consultation through the designated form available on the website of the Intervención General de la Administración del Estado assigned to the
SCIAU.
What happens when the person affected by the CI risk decides not to continue with the procedure or the line manager decides to do so?
In cases where the individual affected by the conflict-of-interest risk decides not to proceed with he procedure or if the superior makes such a decision, in the event of the decision-maker abstaining, a reassessment of the conflict of interest risk must be conducted for the individual who assumes the decision-maker’s role in the procedure.
In cases where the
line manager decides, based on reasoned judgement, that the decision-maker should abstain, the responsibility for documenting this decision on the
CoFFEE app falls upon the operations manager. This documentation includes the reasoned allegation stating the absence of a conflict of interest, the details surrounding the abstention, the additional information sourced from
Minerva,
the Anti-Fraud Committee’s report, and the decision made by the line manager. This documentation is crucial for potential audits conducted by the relevant RRF audit authorities.
Furthermore, the
operations manager must initiate a process to reevaluate the conflict-of-interest risk concerning the individual replacing the decision-maker who, in compliance with this procedure, has been removed from the process.
How should the operations manager act once the CI risk situation has been resolved?
If there is a risk of a conflict of interest (red flag) and the decision-maker concerned does not abstain, the procedure can still proceed with the operations manager acting accordingly.
If the decision-maker abstains, either when the red flag is identified or at the end of the process outlined in Article 6 of
Order 55/2023, the operations manager must conduct a risk analysis of a potential replacement's conflict of interest.
The operations manager must submit the necessary documentation to
CoFFEE. This includes a logical explanation of the absence of any conflicts of interest, the details of any instances of abstention, additional information supplied by
Minerva, the
Anti-Fraud Committee's report, and the decision made by their
line manager. This submission is vital for any future audits conducted by the appropriate RRF audit authorities.
What does the presence of a black flag signify during the Minerva consultation?
It means there is no available information on the risk of conflict of interest among participants, as no data exists for this entity.
Based on the analysis conducted through
Minerva, we were unable to determine the true ownership of the legal person applying. This limits the ability to analyse any potential conflicts of interest.
This does not imply the automatic suspension of the current procedure.
What to do if a black flag is displayed during a Minerva consultation.
The presence of a
black flag in
Minerva's report does not impede the ongoing procedure.
When a foreign entity lacks information on the actual ownership of a company, the AEAT will implement the information acquisition protocol that it has established with relevant organisations, notably the General Council of Notaries [Consejo General del Notariado].
Once received by AEAT, the information will be retained to be used in ex-post audits carried out by IGAE, who act as the RRF Control Authority. Additionally, it will be used for subsequent conflict of interest risk analyses requested by Minerva in relation to the company.
On the other hand, the entities responsible for awarding contracts and subsidies have the authority to demand that participants in the procedures furnish details regarding their current ownership. This information should be submitted to the contracting or grant-awarding body within five business days of receiving the information request.
If the requested information is acquired, the operations manager should conduct a fresh ex-ante assessment of a possible conflict of interest, specifying the genuine owners identified by the contracting or grant-awarding organisations rather than the bidder/applicant.