Multilateral Development Banks Sign Cross-Debarment Agreement

In April, five multilateral development banks (MDB's) - the World Bank, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank Group - signed an agreement to "cross-debar firms and individuals found to have engaged in wrongdoing in MDB-financed development projects. (See here for more information).

World Bank Group President Robert Zoellick noted that with the "cross-debarment agreement among development banks, a clear message on anticorruption is being delivered: steal and cheat from one, get punished by all."

Under the agreement (here), each participating institution "will enforce debarment decisions made by another participating institution" to the extent the debarment exceeds one year. However, as is often the case, notwithstanding such a commitment, the agreement also states that a "participating institution may decide not to enforce a debarment by the sanctioning institution where such enforcement would be inconsistent with its legal or other institutional considerations ..."

It remains to been seen whether the cross-debarment agreement will have any deterrant effect by raising the "cost" of engaging in bribery and corruption.

For a World Bank list of debarred firms and individuals (see here).

In July 2009, the World Bank announced (here) "an agreement of up to a four-year debarment for Siemens’ Russian subsidiary, and a voluntary two-year shut-out from bidding on Bank business for Siemens AG and all of its consolidated subsidiaries and affiliates." In November 2009, the World Bank announced (here) that it "debarred [for four years] Limited Liability Company Siemens (OOO Siemens), a Russian subsidiary of Siemens AG, for having engaged in fraudulent and corrupt practices in relation to a World Bank-financed project - Moscow Urban Transport Project." For more information on what was and was not included in that debarment proceeding, see here.