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How Cross-Debarment Works
What is Cross-Debarment?
Cross-debarment is the recognition of debarment decisions by signatories to the Agreement for Mutual Enforcement of Debarment Decisions on the same terms as the initial decision. Consequently, a decision of one of the signatories to debar a firm or individual found to have engaged in misconduct, termed “Sanctionable Practices”, will be enforced by others. The signatories are termed “Participating Institutions”. The Participating Institution that makes an initial debarment decision is the “Sanctioning Institution”.
What are Sanctionable Practices?
Sanctionable Practices are corruption, fraud, coercion, and collusion as defined in the Bank’s procurement guidelines. They flow from the standardized definitions adopted by Participating Institutions under the Uniform Framework. The Bank also recognizes obstructive practice as a Sanctionable Practice although this alone is not applicable under the cross-debarment process. The definition of each term is available on the Bank’s website.
Who are the Participating Institutions?
These are 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.
Does the Agreement for Mutual Enforcement of Debarment Decisions apply to all sanctions, e.g. fines?
No. The Bank will only recognize debarment decisions under the Agreement for Mutual Enforcement of Debarment Decisions.
How does the Bank apply cross-debarment?
The Bank will recognize sanction decisions made by Sanctioning Institutions where: (i) the decision was based in whole or in part on a Sanctionable Practice (ii) the initial debarment decision exceeds one year, (iii) the Sanctioning Institution makes the decision public and (iv) the decision was made within ten years of the date of commission of the Sanctionable Practice.
Further, the Bank may choose not to recognize a decision where there are institutional or legal reasons restricting the Bank from doing so.
What is the Effective Date?
The Effective Date is the date the Bank recognizes a Sanctioning Institution’s debarment decision on the same terms as the initial sanction was made. In some cases, the Effective Date may slightly differ from the initial date of sanction. This may be due to administrative reasons, including the delay in the receipt of notice of sanction decision and internal consideration of legal and institutional reasons. In any case, the Bank will make the decision publicly available on its website on the Effective Date.
Is a contract invalid where the contract was awarded after the initial sanction but before the Effective Date?
No. A contract will not be deemed invalid because it was granted in between the decision by Sanctioning Institution and the Effective Date.
Can a sanctioned entity bid for a contract as long as the estimated date of award will be after the sanction has been lifted?
No. The recognition of a cross-debarment decision restricts a sanctioned entity from bidding and from being awarded a Bank-financed contract.
Will cross-debarment affect existing contracts with sanctioned entities?
No. Cross-debarment only applies after the Effective Date and existing contracts will not be affected. However, the Bank will not typically authorize amendments that increase the value of existing contracts with sanctioned entities.
What about employees, affiliates or parent companies of the sanctioned entities? Will they be eligible to receive Bank-financed contracts?
Except where such employees, affiliates or parent companies are also specifically sanctioned, they will be deemed eligible by the Bank.
Some countries have their own blacklist of sanctioned entities for reasons of fraud and corruption or for poor performance. Would this apply to this Agreement?
The Agreement for Mutual Enforcement of Debarment Decisions does not apply to decisions made in a national or other international forum. Notwithstanding the foregoing, please note that the Bank’s procurement rules restrict it from requiring that an entity sanctioned by a national body be declared eligible for the purposes of a Bank-financed contract.