In finance, a sector still very strongly represented with 25% in Luxembourg’s national product, the issue of conflict of interest is regulated by European Directive 2014/65/EU of May 15, 2014.
By means of this directive, every financial institution is required to be able to identify potential conflicts of interest at any time, to document them meticulously and to avoid or sanction them by means of corresponding internal procedures. The following situations, for example, are considered conflicts of interest, reviewed, documented and, if necessary, sanctioned:
If the company can generate a profit (or reduce a loss) that could be charged to a customer.
If the company obtains advantages from the customer’s service, which are not in the customer’s interest.
If the company (or one of its employees) receives benefits, from the customer or from third parties, which could provide the company with advantages.
If the company offers the same services as the customer himself.
If the company receives premiums/commissions from third parties that could influence the behavior towards the customer.
In this context, at the end of the year in some financial institutions, for example, employees are required, among other things, to inform the compliance team if he/she have received gifts during the year whose cumulative value exceeds EUR 125, which could sometimes be the case with 2 high-quality bottles of wine or a fine bottle of champagne. Also, all private stock exchange transactions of employees must be reported to the compliance team, etc. The list of rules to which financial institutions and their employees are exposed is very long and may well be perceived as a painful intrusion into the private life and well-being of the individual employee, even or especially in the absence of any criminal energy.
This approach by the authorities in the financial sector seems to be unavoidable for the reason that potential bribery/corruption is difficult or impossible to prove, as it is hardly ever documented in writing. The boundaries between a simple thank you for services rendered and the associated satisfaction with the consultant on the one hand and bribery for the purpose of obtaining an advantage on the other hand therefore seem to be too blurred. Therefore, the “guilty until proven guilty” presumption has rather prevailed in this area.
Now it gets interesting…
In finance, as we all know, it’s “all” about money: a customer’s attempt to reduce account management or transaction fees by drinking a good bottle of wine does have an unpleasant aftertaste, even if it is a very good bottle… nevertheless, we should agree that in our society health is still considered the highest good. Especially in its absence or in times of fear of losing it, as is the case today (30.12.2020).
…the bitter pill of the pharmaceutical industry
In the pharmaceutical industry, this basic skepticism and the “presumption of guilt” of its main protagonists does not seem to apply, as a recent article in the British Journal of Medicine on the corruption of physicians by the pharmaceutical industry points out.
But also scandals like those around Tamiflu, Pandemrix or even still Thalidomide are some prime examples for the unhealthy mixture of money and politics on the one hand and our health on the other hand.
In addition, the pharmaceutical lobbyists ensure that they have a strong ally at the higher level, i.e. the governments and their health ministries:
It becomes particularly intriguing as soon as one takes a closer look at the figures of the WHO and its “contributors” (donors) and the further entanglements in the background. We invite you to click on the link below this graphic to access these details.
If you click on the page “specified voluntary contributors” you will get to the following page (on 30.12.2020):
We kindly invite you to click on this link and have a look at the whole list, Luxembourg is represented with about 10 million below. For countries to join together to fight disease – which may have been the initial intention of the WHO – is indeed a very noble goal.
However, these lists also include pharmaceutical companies (directly and indirectly), all of which pursue a profit motive. One term that pops to our minds spontaneously is the term: Follow the money.
With such complex financial entanglements, any compliance officer in the financial sector would surely frown.
First question: How neutral can the opinion of a person, an institution or a pharmaceutical company be if they make themselves dependent on someone who profits so disproportionately from the implementation of this opinion with the above-mentioned amounts? Here we are already talking about more than just 2 bottles of wine.
Second question: Is it permissible for the WHO to issue recommendations, even make decisions, that are in the interest of its funders?
Third question: Why don’t more people frown on such entanglements?
The original language of this article is German. The English and French versions are translations