The World Bank Group sanctions system

The World Bank Group (‘Bank Group’) is a multilateral development bank (MDB) that provides financial and technical assistance to developing countries. It works to achieve the goals of ending extreme poverty and promoting shared prosperity. Recognizing the detrimental effects of fraud and corruption on development efforts, the Bank Group became the first international financial institution to implement a formal sanctions system which suspends and debars actors found to have engaged in misconduct on Bank Group-financed projects. This chapter offers a brief overview of the Bank Group and the context in which the sanctions system operates. It also describes the objectives and historical development of the system; delves into its structure and current operating norms; contemplates the critical role of the World Bank’s Legal Vice Presidency; and provides an overview of the system’s major contributions vis-à-vis the development of legal norms in suspension and debarment, including its innovative two-tier adjudication process, the use of settlements, and the early temporary suspension approach. The innovative nature of the system has contributed to the development of legal norms; spread to multiple international financial institutions; influenced national legal systems and other international organizations; and fostered innovative harmonization efforts and effective cross-debarment agreements with other MDBs.