LUXEMBOURG - Taking a major step in the global fight against fraud and corruption, leading Multilateral Development Banks (MDBs) today signed an agreement to cross debar firms and individuals found to have engaged in wrongdoing in MDB-financed development projects.
The new accord, which applies to debarments that exceed one year, includes: the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group, and the World Bank Group. Sanctions by MDBs typically include reprimand, conditions on future contracting, or debarment -declaring a company or individual ineligible to participate in any future activities it finances, either for a period of time or permanently. Public debarment, which carries with it both financial and reputational risks, is considered a major deterrent to wrongdoing. Under the new agreement, entities debarred by one MDB may be sanctioned for the same misconduct by other participating development banks.