Investigations and Sanctions Regimes at Multilateral Development Banks: What You Need to Know


As a contractor or individual that receives funding from a multilateral development bank (“MDB”) or that participates in a project funded by an MDB, what do I need to know about fraud and anti-corruption compliance and enforcement by MDBs? And what steps can I take to minimize that risk?

In this article, we provide insight into and guidance on the investigations and sanctions regimes at the World Bank and Africa Development Bank and trends in enforcement actions by these MDBs.

MDBs have increased their level of financing and engagement in response to the COVID-19 pandemic. This dynamic also presents a likelihood of increased investigations and sanctions as some parties may have resorted to cutting corners in the rush to respond to RFPs for MDB financed projects and others may have actively sought to take advantage of the perceived easy funding opportunities. Accordingly, MDBs are on alert. Conversely, the challenges confronting compliance personnel and entities who receive MDB funding are greater than ever.

A lack of familiarity with MDB sanctions procedures may cause firms to misidentify their risk and commit inadequate resources or attention to MDB compliance, guidelines, and sanctions procedures, which can lead to devastating sanctions—including for entities who are not in contractual privity with the MDB—such as cross-debarment. Contractors and individuals should take steps to mitigate their risks and better position themselves for a favorable disposition when under scrutiny by an MDB.