Cross-debarment among multilateral development banks explained

Which debarments qualify

The Asian Development Bank, one of the signatories, summarises the tests a debarment must meet ². Paragraph 4 of the agreement sets them out ¹.

• The decision rests "in whole or in part" on a finding of a sanctionable practice defined in the Uniform Framework ¹. The ADB lists these as fraud, corruption, collusion or coercion ².
• "The decision is made public by the Sanctioning" institution ¹.
• "The initial period of debarment exceeds one year" ^1,2.
• The decision was made after the agreement entered into force for the sanctioning institution ².
• The ADB says the practice must fall within a 10-year limit counted from when it was committed ². The agreement refers to the "date of commission of the sanctionable practice" ¹.
• The decision is not based on a decision by a national or other international authority ².

Definitions used

The agreement uses the definitions in the Uniform Framework of September 2006 ¹. A fraudulent practice is any act that "knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation" ¹. A corrupt practice is offering or giving "anything of value to influence improperly the actions of another party" ¹. A collusive practice "is an arrangement between two or more parties designed to achieve an improper purpose" ¹. A coercive practice is harming a party or its property "to influence improperly the actions of a party" ¹.

Obstructive practice is a sanctionable practice under World Bank and AfDB rules ^3,4. It is not among the four practices the ADB lists for cross-debarment ².

How enforcement works

After a debarment, the sanctioning bank sends a Notice of Debarment Decision to the other signatories for which the agreement is in force ². Each recipient recognises the debarment, with an exception where legal or institutional considerations prevent it ². Paragraph 7 says a bank that decides not to enforce "will promptly notify the other Participating Institutions of such decision" ¹. The agreement enters into force for each bank on signature and on notice that it has met all implementation requirements ¹.

Each bank then applies the debarment through its own rules. The World Bank's 2023 procedure records the 19 March 2010 approval by its Executive Directors and treats prior adjudications by another bank, where its debarments may be enforced, as a sanctioning factor ³. The AfDB's 2023 Sanctions Procedures say debarments under the agreement "may be enforced by the Bank Group or any of the Participating Institutions" ⁴. An OSD fact sheet says World Bank sanctions "will trigger cross-debarment by other MDBs where applicable" ⁷.

Settlements and cross-debarment

A negotiated settlement can still lead to cross-debarment. The World Bank said its 2013 settlement with SNC-Lavalin, which debarred SNC-Lavalin Inc. and over 100 affiliates for 10 years, "qualifies for cross-debarment by other MDBs" ⁶. The AfDB said its 2021 negotiated settlement with Weihai Construction Group, a 35-month debarment, qualified for cross-debarment by the ADB, EBRD, IDB and World Bank Group ⁸.

A release saying a debarment "qualifies" for cross-debarment does not by itself show that each bank enforced it ⁶. To check, look at the debarment lists of each bank. The AfDB list marks each row in its Basis column, such as "CROSS DEBARMENT : WBG" or "CROSS-DEBARMENT: IDB" ⁵.

Where to read the agreement

The ADB publishes the agreement as an institutional document dated April 2010 ¹. The AfDB 2023 Sanctions Procedures refer to it in Section 15.1 ⁴. The World Bank Sanctions Board and the Office of Suspension and Debarment publish World Bank decisions and the listing of ineligible firms ^3,7.