Conflict of Interest

A conflict of interest is a situation in which one has a personal interest and its real impact on how the individual performs his or her duties. 

The impact of a personal interest on the proper, objective and impartial performance of official duties depends on the nature of the interest, such as political affiliation, professional connections, faith, family responsibility, personal property, investments, debts, etc., or their quantification, such as an interest in the family business, the opportunity to make a large profit, avoidance of losses, etc.

Personal interest is an opportunity to receive a financial benefit. And it can be received by the official himself, as well as by his relatives. As well as people and organizations with which he is connected by property, corporate or other close relations.

In this situation, the person filling the position does not take measures to prevent and resolve the conflict of interest, knowingly allows the situation to occur, as a result of which he/she receives the income sought.

A situation of possible conflict of interest is a situation in the light of which the personal interest of the person holding the position is not, at the time the issue is raised, sufficient to give rise to a conflict of interest, since there is as yet no connection between his official duties and his personal interests. But hypothetically (potentially) a personal interest may arise and affect the proper, objective and impartial performance of the duties of the position, especially in situations where they evolve or change. 

In all such cases, it is necessary to examine whether an official's personal interest may affect the performance of his or her duties in the new work environment or new job responsibilities in order to ensure that no real conflict of interest has arisen and remains only a potential conflict of interest.

Classification of Conflicts of Interest

In order for a conflict of interest to arise, there must be an opportunity for the employee, his or her relatives or close associates to receive a benefit in addition to a particular position. It can be in the form of money, property and free services, promotions, etc.

Self-dealing is one of the most widespread types of conflict of interest. To this type refer situations in which a manager of a company harms it in various ways in exchange for a transaction from a company-competitor.

Another type of conflict of interest is gift issuance. As a rule, companies forbid their employees to receive gifts from the customers, as this might lead to personal interest of the employee in the customer’s wealth.

Access to confidential information can also start a conflict of interest. The information itself can be sold to interested parties in order to get personal gain.

Nepotism is a form of conflict of interest as well. Favorability or any other kind of special treatment of relatives, spouse or acquaintances can have an outcome in the conflict of interest.