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Cross debarment

Voluntary Disclosure Programmes

By | Bribery, Corruption, Cross debarment, Multilateral Development Banks, News, Voluntary Disclosure Programme | No Comments

If you are a company that is seeking to escape the downward spiral of paying bribes or engaging in fraud on projects financed by the multilateral development banks (“MDBs” or “IFIs”), such as the World Bank or the Asian Development Bank, then entry into a voluntary disclosure programme (“VDP”) might well be the answer.

VDPs are often used by enforcement agencies around the world in order to gather intelligence to aid in the global fight against corruption and fraud.  Companies, individuals and other entities who are or who have been paying bribes with the intention of inter alia influencing the award of contracts are encourage by the terms and conditions of the programme to come forward and self-report their respective wrongdoings.  The incentive for self-reporting under an established VDP is that the organisation that operates the programme will not normally sanction the participant for disclosed misconduct and will keep the identity of the participant confidential.  The benefit to the organisation is self-evident, for it will discover information about corruption and fraud on projects that it is connected with from the participant that it might otherwise have been unaware of.  Although the participant will not face sanction for its disclosures, the information that it provides will assist the organisation in pursuing cases against other bribe payers, bribe recipients and fraudsters.

Of the five major MDBs (i.e., the Asian Development Bank (“ADB”), the African Development Bank (“AfDB”), the European Bank for Reconstruction and Development (“EBRD”), the Inter American Development Bank (“IADB”) and the World Bank Group), only the World Bank Group operates a fully functioning, transparent and well established VDP; although the other MDBs, and most notably the ADB, have systems in place that encourage and reward self-reporting.  The World Bank Group launched its VDP in 2006 and its  accompanying Guidelines for Participants.

In order to enter the World Bank’s VDP, a participant must not be under active investigation by the Bank’s Integrity Vice Presidency (“INT”) and it must agree to:

  •  co-operate fully with the World Bank;
  • desist from any further engagement in sanctionable practices on World Bank financed projects, such as corruption, fraud, collusion or coercion;
  • investigate at its expense all World Bank funded contracts in which it has participated in the past five years and to disclose the results of those investigations to INT; and
  • implement at its expense a robust internal compliance programme that meets the requirements of the Bank’s Integrity Compliance Guidelines and to subject that programme to monitoring for a period of three years by a Bank-approved Compliance Monitor.

In exchange for its full co-operation, the VDP participant enjoys:

  • immunity from sanction on disclosed misconduct;
  • anonymity
  • the ability to continue to bid on World Bank financed projects.

A participant that continues to engage in misconduct after entering the VDP or otherwise materially violates the programme’s terms and conditions will be debarred by the World Bank for a ten year period, which means that during the currency of the debarment the participant will be (a) prevented from bidding on World Bank financed projects; and (b) cross-debarred by those Multilateral Development Banks that have signed and implemented the April 2010 Agreement for Mutual Enforcement of Debarment Decisions (“the Cross-Debarment Accord”.

How Bretton Woods Law Can Assist You

Bretton Woods Law lawyers have established expertise in the VDP operated by the World Bank Group and understand fully the modalities of self-reporting to other Multilateral Development Banks, such as the ADB, which welcome self-reporting, but which do not as yet have a functioning and transparent programme. Bretton Woods Law handles for its clients all aspects of entry into and participation in the VDP or other forms of self-reporting.  From first contact with the banks through to the fulfilment of all VDP obligations, Bretton Woods Law lawyers have established and verifiable experience.  In particular, Bretton Woods Law lawyers:

  • will conduct all the necessary internal investigations to a standard that meets and exceeds the bar set by the World Bank; and
  • will design and, if necessary, implement an integrity compliance program that has previously been described as “gold-standard” by the World Bank’s Integrity Compliance Officer (“ICO”).

For further information about how Bretton Woods Law can assist you in moving away from corruption in a protected manner, please contact your nearest office or email us at enquiries@brettonwoodslaw.com.

fraudulent practice

Multilateral Development Banks (MDB) – Dos and Do Nots

By | Bribery, Corruption, Cross debarment, Debarment, Development Banks, Fraud, Multilateral Development Banks, News, Sanctions, Sanctions Board | No Comments

The MDB community is comprised in the main of the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB) and the World Bank Group.  Each MDB is an international organisation created by treaty and each is mandated by its Member States to ensure that the funds that the organisations lend reach their intended destination.  As such, each MDB has created an investigative office whose function it is to ‘police’ MDB funded projects in order to prevent or stop incidences of fraud, corruption, collusion and coercion (“the Sanctionable Practices”).  The MDBs have all developed an internal ‘administrative’ apparatus for prosecuting companies and individuals accused of having engaged in Sanctionable Practices on MDB financed projects.  Entities found guilty by the MDBs risk debarment (i.e., they will be prohibited from bidding on MDB funded projects for a period of time) and face referral to national prosecutorial authorities.

The following list of ‘Dos and Do Nots’ is intended to assist companies and individuals in their dealings with the MDBs:

The Dos

Do remember that companies and individuals can be debarred either indefinitely or for a set period of time by the MDBs for engaging in Sanctionable Practices on projects that they finance.

Do recall that the default sanction for a company with no prior convictions by the MDBs is a three-year debarment with conditional release, which means that the company will not be released to bid again until it can demonstrate that it has improved its corporate compliance and governance position.

Do appreciate that most MDBs publish the names of those that they have debarred for fraud and corruption, which can have dire and long-lasting consequences for the reputations of those companies and will seriously harm its chances of winning work funded by non-MDB sources as well.

Do realise that the presumption of innocence does not apply and that the World Bank can impose a six-month ‘temporary suspension’ before even formally accusing a company of having engaged in a Sanctionable Practice.

Do be cognisant of the fact that the MDBs do not have any jurisdiction over public officials; just companies and individuals who have bid upon and who have been awarded MDB funded projects.

Do be aware that the jurisdiction of the investigative offices of the MDBs stems from the ‘triangular’ contractual arrangements between lender (MDB), borrower (usually a government) and the contractor (the successful bidder).

Do ensure that bids submitted on MDB financed projects are entirely accurate and defensible.

Do ensure that you are aware of the risks of doing business in certain countries and, to this end, do consult at a minimum Transparency International’s Corruption Perception Index.

Do avoid using agents in countries in which you operate and do undertake credible due diligence checks on the consultants and contractors that you engage.

Do train your staff routinely and regularly on how to identify and avoid being drawn in to a Sanctionable Practice, as well as the potential repercussions for doing so.

Do appreciate that some MDBs, most notably the World Bank, will enter into plea arrangements known as Negotiated Resolution Agreements, whereby any likely sanction will be reduced for a guilty plea and an undertaking to assist the MDB.

Do be aware of the 9th April 2010 Agreement for Mutual Enforcement of Debarment Decisions under which a company debarred for longer than one year by one MDB will be debarred by them all, which can and most likely will deter organisations, national aid agencies and government departments from dealing with you.

Do act swiftly and instruct a lawyer who has established expertise in MDB debarment work the very moment you appreciate that you are at risk of sanction.  The earlier that a lawyer is engaged the better.

Do realise that a company’s corporate compliance structure should meet with the minimum requirements set by the World Bank’s Integrity Compliance Guidelines.

Do provide a copy of this document to your Compliance Officer.

 

The Do Nots

Do not be tempted to engage in any form of Sanctionable Practices on MDB financed projects, for it is likely that your act or omission will be discovered.

Do not pay success fees, other similar commissions or facilitation payments, for the MDBs will treat such payments as bribes.

Do not inflate or otherwise alter CVs in bids submitted on MDB financed contracts, for this can and most likely will amount to a fraudulent practice.

Do not engage with investigative offices of the MDBs, such as the World Bank’s Integrity Vice Presidency (INT) unless you have first spoken with a lawyer qualified to advise on MDB debarment matters.  The first approach from the MDB might be the issuance of an Audit Letter under which it requests sight of the company’s books and records pursuant to contractual obligations owed by the company to the borrower.

Do not allow yourself to be interviewed by MDB officers as a ‘suspect’ or ‘subject of an investigation’ in the absence of a suitably qualified lawyer instructed by you and do not disclose any documents.

Do not admit liability for a Sanctionable Practice until your lawyer has advised you on the merits and consequences of doing so.

Do not forget that the investigative offices of the MDBs regularly share information between themselves.

Do not ignore any notices received from the MDBs, such as a Notice of Temporary Suspension or a Notice of Sanctions Proceedings issued by the Evaluation and Suspensions Officer of the World Bank.

Do not forget that only the World Bank operates a quasi-judicial system for handling accusations of Sanctionable Practices, the other MDBs, such as the ADB, operate a ‘star-chamber.’

Do not consider entering into an MDB voluntary disclosure programme in the absence of first consulting a suitably qualified lawyer.

Do not forget that some MDBs, such as the World Bank, can sanction a company for a failure to co-operate with its investigators (known as an Obstructive Practice) such as where a company refuses to honour an audit clause in its contract with the borrower that permits MDB investigators to review its books and records.

All of the lawyers practising at Bretton Woods Law are experts in international organisations law, including the sanctions regimes operated by the various MDBs.  They regularly accept instructions to defend companies and individuals accused by the MDBs of having engaged in Sanctionable Practices.

If you think you could benefit from some truly international legal expertise, please click here to contact your nearest office

 

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What it takes to be truly international set of chambers

By | Administrative Law, Civil Servants, Cross debarment, Development Banks, International, Multilateral Development Banks, News | No Comments

Describing yourself as international is easy, demonstrating it takes a bit more hard work.

Bretton Woods Law deals with international clients on a daily basis, they could be talking to a multinational company accused of sanctionable practices by a multilateral development one moment and then an international civil servant with employment issues the next. So how do they ensure they offer the best possible legal advice to people from different cultures and countries?

 Language

It is easy to get your website and brochures translated, but what happens when you get someone contacting you and you can’t actually speak their language, even though the website infers you can? Bretton Woods Law has taken the trouble to employ legal professionals who are fluent in French and Spanish, as with so many international organisations being located in countries that speak these languages, it seemed only sensible and more importantly… polite.

 Cultural sensitivity

They say there is no substitute for real experience, and Bretton Woods Law would attest to this. Lee Marler, a lead counsel at Bretton Woods Law previously worked internationally as a lawyer across the globe, including America, Australia, Bosnia, East Timor, Kosovo and Palestine. He also worked as a lawyer for the United Nations, the European Bank for Reconstruction and Development and the World Bank Group. Lee’s international exposure is matched, by fellow lead counsel Neil Macaulay, who has worked as a lawyer in such diverse places as Germany, Cyprus, Bosnia, US, Philippines and the Turks and Caicos Islands.

This vast cross cross-cultural experience reinforced Lee and Neil’s belief that for any set of chambers to be truly international, they must understand that each culture has their own particular value and beliefs, and as such need to be respected and understood if you are going to succeed.

It is this cultural empathy that runs throughout Bretton Woods Law that could account for their success rate. Whether they are representing an international civil servant with employment issues or an international company facing debarment by a multilateral development bank – each individual at Bretton Woods Law has the ability to put themselves in their clients’ shoes, professionally, emotionally and of course culturally.

If you think you could benefit from some truly international legal expertise, please click here to contact your nearest office