The World Bank—together with other international financial institutions (IFIs), such as the European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank (IDB)—has increased its commitment to combating fraud and corruption in recent years. The World Bank’s Integrity Vice Presidency is responsible for investigating allegations of misconduct, including fraud, corruption, and collusive and coercive practices, in connection with World Bank-financed projects. Discovery of such misconduct may result in public sanctions against a company and even debarment from eligibility to bid on World Bank-financed projects.
The World Bank’s Voluntary Disclosure Program (VDP) allows companies that uncover misconduct to investigate and confidentially disclose that conduct to the World Bank. Participation in the VDP allows a company to avoid debarment and keep misconduct confidential in exchange for a commitment to strengthen and enhance its compliance program. VDP participants must also engage an independent compliance monitor, who assesses the compliance program and makes reports directly to the World Bank.
World Bank sanctions and debarment can bring significant financial penalties and also result in cross-debarment with other IFIs under certain circumstances. As a result of a 2010 agreement among the African Development Bank, the Asian Development Bank, the EBRD and the IDB, misconduct associated with World Bank-financed projects may result in debarment from projects financed by one or more of these other IFIs.
Importantly, conduct involving violations of World Bank guidelines may indicate violations of other criminal laws, both in the United States and elsewhere, such as the Foreign Corrupt Practices Act and the U.K. Bribery Act. The World Bank and other IFIs involved in development projects have formed closer working relationships with law enforcement, including the Federal Bureau of Investigation. In addition to forming closer ties to law enforcement, the World Bank and other IFIs have increased their expectations that compliance best practices be implemented by companies working on projects involving funds from the World Bank.
Thus, designing a corporate compliance program that effectively identifies, prevents and remediates misconduct is essential for companies that work on World Bank-financed projects. In the event that a company identifies misconduct, it is equally important to investigate the misconduct quickly and, where appropriate, disclose it to the World Bank to prevent the imposition of costly sanctions.
Akin Gump Strauss Hauer & Feld LLP has wide-ranging experience in representing companies before the World Bank and other IFIs. Akin Gump’s experience with regard to compliance programs, investigations and monitorships includes:
- providing advice and counsel related to development and implementation of global anticorruption compliance programs
- benchmarking existing compliance programs against applicable guidelines to proactively identify and remediate gaps
- assisting companies in automated compliance solutions to implement enhanced compliance capabilities and improve efficiencies
- conducting internal investigations of corruption allegations and defending investigations by the World Bank or other IFIs
- counseling on and preparing disclosures for relevant IFIs and other government and nongovernmental international regulators
- defending companies and employees involved in allegations of criminal misconduct relating to projects involving World Bank or other IFI funds
- being engaged, as part of the World Bank’s VDP, as the independent compliance monitor responsible for evaluating a company’s compliance programs and submitting recommendations to the company and the World Bank regarding the adequacy of those programs.