IDB Sanctions System
The Inter-American Development Bank Group strives to ensure its activities are free of fraud and corruption and subject to the strictest control mechanisms. The IDB’s anti-corruption framework was first approved in 2001, and has undergone continuous improvements. The latest changes occurred in 2011 and 2015, as part of the Agenda for the Better Bank, critical to the Ninth General Capital Increase and to the development effectiveness of IDB Group Operations. It is within this framework that the Office of Institutional Integrity (OII), the Sanctions Officer and the Sanctions Committee fulfill a fiduciary role that is essential to help the IDB Group achieve its objective of improving lives in Latin America and the Caribbean.
The Sanctions System consists of two different phases:
- the investigative phase, conducted by OII and
- the adjudication phase, conducted by the Sanctions Officer and the Sanctions Committee.
The Office of Institutional Integrity is an independent advisory office within the Bank Group that investigates allegations of Prohibited Practices. It aims to help ensure that resources intended to support the region’s social and economic development are not lost to fraud and corruption. The OII also engages in outreach on integrity-related issues.
The adjudication phase encompasses two instances. In the first instance, the Sanctions Officer issues a determination that can be appealed before the Sanctions Committee, which is the second and final instance. The standard of review of the Sanctions Officer and the Sanctions Committee is the preponderance of the evidence.
The Sanctions Officer is the first instance of the Sanction System’s adjudication phase. The Sanctions Officer determines whether OII’s investigative findings are sufficiently supported by evidence under the standard of preponderance of the evidence.
If after reviewing OII’s Statement of Charges, the Sanctions Officer determines that the investigated party (Respondent) engaged in a Prohibited Practice, the Sanctions Officer notifies the Respondent that sanctions proceedings have been initiated. The Respondent has the opportunity to submit a Response. After receiving the Response, the Sanctions Officer may request additional information or materials from OII or the Respondent.
The Sanctions Officer evaluates the sufficiency of the evidence presented by OII and the Respondent, and issues a Determination. If the Sanctions Officer finds that a Prohibited Practice is supported by a preponderance of the evidence, the Sanctions Officer determines a sanction on the Respondent. If the determination is that the Prohibited Practice is not supported by the preponderance of evidence, the allegations are dismissed and proceedings terminated.
The Sanctions Committee is the second and final instance of the Sanction System’s adjudication phase. It is composed of three IDB staff members, four external members, and an alternate member of the Inter-American Investment Corporation, the IDB Group’s private sector lending arm. After reviewing OII’s and the Respondent’s arguments, the Sanctions Committee decides whether it is more likely than not that the Respondent engaged in a Prohibited Practice, in which case it imposes a sanction. The Sanctions Committee is not bound by the sanction imposed by the Sanctions Officer. It may impose a different sanction or determine that no sanction should be imposed.