Hiding in Plain Sight: Anti-Corruption Enforcement Risks from Multilateral Development Banks
The World Bank’s Office of Suspension and Debarment (OSD) recently published a report regarding the past ten years of enforcement activity that provides insight into the Bank’s expanding efforts to combat fraud, corruption, and other sanctionable practices. It also illustrates the growing trend of multilateral development banks (MDBs) exercising their broad authority to investigate and sanction. Companies involved with projects funded by MDBs must understand the breadth of their enforcement authority and respective sanctions processes. MDBs not only can issue sanctions like debarment, thereby precluding participation in future bank-financed projects, but also can refer cases to national enforcement authorities. As recent cases demonstrate, an MDB investigation can quickly become a larger and more complex enforcement matter in one or more countries, resulting in a myriad of negative collateral consequences.