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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Practice note: How does the World Bank impose sanctions? (Part One)

Image courtesy of the World Bank GroupSince 2001, the World Bank has sanctioned more than 400 firms and individuals. Let’s look at how that happens.

When there’s a complaint against a firm or individual involved in a World Bank-funded project, the Bank’s Integrity Vice Presidency (INT) investigates the allegations.

After the investigation, the Bank’s Suspension and Debarment Officer (SDO) reviews the evidence and determines if it’s sufficient to support a finding that an alleged sanctionable practice happened.

If so, the SDO issues a Notice of Sanctions Proceedings to the firm or individual alleged to have engaged in the sanctionable practice (the respondent). The notice includes the allegations, the evidence submitted by the INT, and a recommended sanction.

After a Notice is issued, the SDO temporarily suspends the respondent from eligibility for new World Bank-financed contracts, pending the final outcome of the sanctions process.

The respondent can choose not to contest the allegations or the sanction recommended by the SDO, in which case the recommended sanction is imposed.

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If the respondent (a firm or an individual) contests the allegations or the recommended sanction, the case is referred to the World Bank Group’s Sanctions Board.
 
The seven-member Sanctions Board carries out a full de novo review in each contested case. It isn’t bound by the SDO’s recommendation.

The Sanctions Board can hold an administrative hearing either upon a party’s request or at the discretion of the Sanctions Board chair.

In its deliberations, the Sanctions Board considers:

  • the allegations and evidence that were attached to the Notice of Sanctions Proceedings
  • the respondent’s arguments and evidence it submitted to the Integrity Vice Presidency in response to the allegations and evidence
  • the Integrity Vice Presidency’s reply brief
  • the parties’ presentations at a hearing, if applicable, and
  • any other materials contained in the record.

 After completing its review, the Sanctions Board determines whether it is “more likely than not” that the respondent engaged in a sanctionable practice. If so, the Sanctions Board imposes one or more of five possible sanctions. 

The possible sanctions are (i) reprimand, (ii) conditional non-debarment, (iii) debarment, (iv) debarment with conditinnal release, and (v) restitution or remedy.

The Sanctions Board can extend the sanctions to a respondent’s affiliates, successors, and assigns.

Decisions of the Sanctions Board are final and non-appealable.

In the next post, we’ll look at the types of evidence and mitigating factors the World Bank Sanctions Board considered in a recent case.

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The World Bank’s Sanctions Systems homepage is here.

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Resource Alert: There’s a Sanctions Board event in DC on September 30 at 4:00 pm. It’s called Promoting the Rule of Law in the Fights Against Corruption and Poverty. More info and registration here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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