Debarred Firms and Individuals

An investigation into fraud and corruption in Bank-financed projects can have several outcomes, all of which are meant to hold accountable those found to have engaged in wrongdoing.  When firms or individuals are found through an INT investigation to have engaged in fraudulent, corrupt, collusive, or coercive practices(as defined in the International Financial Institutions Anti-Corruption Task Force's September 2006 document "Uniform Framework for Preventing and Combating Fraud and Corruption"), these entities may be subject to an administrative sanction such as debarment.  In addition, entities found to have obstructed an investigation may also be sanctionable.

Debarred entities are declared ineligible to be awarded a World Bank-financed contract. Debarment may be permanent or temporary, and is meant to prevent and deter fraud and corruption in the projects that the Bank finances or supports. 

Sanctions such as debarment are decided through an administrative process in which the Integrity Department plays the role of fact finder. The World Bank’s Sanctions Committee issues notices of debarment to firms and individuals alleged to be involved in the corrupt practices, and the firms and the individuals are granted the opportunity to dispute the charges.

The World Bank debarred a firm for the first time on March 16, 1999, and was the first Multilateral Development Bank (MDB) to publish its list of debarred firms. 

Ongoing reform of the World Bank’s sanctions process has strengthened the World Bank’s ability to debar firms and individuals.  In September of 2006, several International Financial Institutions agreed on a Common Framework against Corruption, including strengthened sharing of information, standardized definitions of fraudulent and corrupt practices, and harmonized investigative procedures, all of which will give the institutions’ respective investigative units greater leverage in rooting out fraud and corruption.

Because the World Bank’s investigations are administrative, rather than criminal in nature, another outcome of an INT investigation is that the World Bank may submit a “referral,” based on its own investigation, to relevant national authorities for follow-up action subject to laws and procedures of the sovereign state. The findings in these referrals are based on the Bank’s own rules and procedures, and cannot be used by the Government as the basis for initiating any administrative, criminal, or civil proceeding.  However, the referrals are made so that the Government may undertake its own actions, including criminal investigation into the referred matter to determine whether any of its own laws have been violated.