SNC 84

The Statement of Charges and Evidence prepared by the Office of Institutional Integrity ("OII") contained OII’s charges alleging that a company that was awarded contracts in connection with the Program had participated, through its chief executive officer and legal representative (the “CEO”), in the following prohibited practices:

• Corrupt practices, by (i) engaging in a retainer type of relationship with a public official during the award and execution of contracts related to the Program and (ii) agreeing to pay and pay success fees to a local agent to curry favor for the Principal Respondent with such agent’s contacts in Barbados and obtain favorable treatment in connection with contracts related to the Program;
• Fraudulent practices, by failing to disclose (i) a conflict of interest resulting from the Principal Respondent’s business dealings with such public official during the procurement and award of a contract related to the Program and (ii) success fees paid, or to be paid, to said local agent in an attempt to conceal the corrupt scheme established with such local agent in Barbados.

OII also submitted evidence demonstrating that the Affiliate is under common control with the Principal Respondent. OII argued that this connection provided a basis for the extension of sanctions to the Affiliate under Section 8.3 of the Sanctions Procedures.

Consequently, and in accordance with the Sanctions Procedures, the Sanctions Officer issued a Notice of Administrative Action (the “Notice”) to the Affiliate. In its Response to the Notice, the Affiliate contested the charges brought by OII. Following the issuance of the Notice and reviewing the respondents’ response, the Sanctions Officer issued a Determination finding that it was more likely than not that the Principal Respondent had participated in corrupt and fraudulent practices and imposed a seven-year debarment on the Principal Respondent. The Sanctions Officer’s Determination provided also for the extension of sanctions to the Affiliate under Section 8.3 of the Sanctions Procedures.

The Affiliate appealed the Sanction Officer’s Determination to the Sanctions Committee (the “Committee”).

Following a de novo review of the record, the Committee concluded that it was more likely than not that the Principal Respondent, acting through its CEO, engaged in corrupt and fraudulent practices. Consequently, the Committee imposed on the Principal Respondent the sanction of debarment for a period of seven years, during which time the Principal Respondent will be ineligible to participate in any activity or project financed by the IDB Group, receive any amount from loans made by the IDB Group, and participate in the preparation or execution of any project financed by the IDB Group. In determining the sanction, the Committee considered the following aggravating factors: repeated pattern of conduct; management role in the misconduct; use of sophisticated means; damage caused to IDB Group operations (including reputational damage to the integrity of the procurement process); and the fraudulent practices charges. Additionally, the Committee considered the passage of time as a mitigating factor.

Pursuant to Section 8.3 of the Sanctions Procedures, the Committee also extended this sanction to the Affiliate, finding that the Affiliate is under common control with the Principal Respondent.

This sanction is subject to cross-debarment by the Multilateral Development Banks signatories to the Agreement for Mutual Enforcement of Debarment Decisions.