Cross-Debarment

On April 9, 2010, in an unprecedented step in the global fight against fraud and corruption, the heads of leading multilateral development banks (MDBs) signed an agreement to cross-debar firms and individuals found to have engaged in wrongdoing in MDB-financed development projects. The new agreement includes the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and the World Bank Group.

Under the agreement, entities and individuals debarred by one MDB may be sanctioned for the same misconduct by the other participating development banks, in effect closing a loophole that had previously allowed a firm or and individual that had been debarred by one MDB to continue obtaining contracts financed by other MDBs.

The accord is intended to level the playing field for all firms competing for MDB-financed contracts and to act as a strong deterrent.

This collective enforcement action validates the institutions’ September 17, 2006 commitment as part of the joint IFI Anti-Corruption Task Force to explore further how compliance and enforcement actions taken by one institution can be supported by the others. Under the 2006 agreement, the institutions agreed to harmonize their definitions of sanctionable practices and to share greater investigative information among the banks.

MDBs participating in the agreement will continue to manage their independent strategies to deter and prevent fraud and corruption in projects. However, the new agreement offers an opportunity to deepen the cooperation between participating MDBs on fraud and corruption risk management and creates opportunities for joint investigations where relevant.