SNC73

The Statement of Charges and Evidence (the "Statement of Charges") prepared by the Office of Institutional Integrity ("OII") contained OII’s charge that the Principal Respondent, who was the sole shareholder and legal representative of a company that was awarded contracts in connection with the “Support for Haiti’s Transport Sector Program,” had participated in a fraudulent practice sanctionable under the IDB Group Sanctions Procedures. OII alleged that, when negotiating and entering into IDB-financed contracts, the Principal Respondent had knowingly misrepresented (i) a debarment imposed on him and the above-mentioned company by the World Bank and (ii) the company’s bankruptcy and the transfer of one of those contracts to a separate yet to be formed entity. OII further alleged that, by doing so, the Principal Respondent knowingly misled the executing agency and the IDB to obtain a financial benefit.

OII also submitted evidence demonstrating that the Respondent Affiliate was controlled by the Principal Respondent. OII argued that this connection provided a basis for the extension of sanctions to the Respondent 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 Respondent Affiliate. In its Response to the Notice, the Respondent 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 a fraudulent practice. The Sanctions Officer’s Determination provided also for the extension of sanctions to the Respondent Affiliate under Section 8.3 of the Sanctions Procedures.

The Sanctions Officer imposed a seven-year debarment on the Respondent Affiliate, making it ineligible to participate and/or be awarded contracts regarding projects or activities financed by the IDB Group. The Respondent Affiliate appealed the Sanction Officer’s Determination to the Committee. 

Following a review of the record, the Committee decided that it was more likely than not that the Principal Respondent had knowingly misrepresented (i) a debarment imposed by the World Bank and (ii) the company’s bankruptcy and the transfer of a contract in its entirety to a separate yet to be formed entity. 

The Committee also concluded that the Principal Respondent’s misrepresentations had been deliberate and made for the purpose of improperly securing a contract and obtaining the financial benefit derived from it. The evidence supported a finding that the Principal Respondent’s conduct had not been the result of  negligence but reflected an intentional pattern to circumvent contractual and ethical obligations.

The Committee imposed on the Principal Respondent the sanction of debarment for a period of seven (7) years. During that period, the Principal Respondent will be ineligible to participate in any activity or project financed by the IDB Group, to receive any amount from loans made by the IDB Group, and to participate in the preparation or execution of any project financed by the IDB Group. In determining the sanction, the Committee applied aggravating factors. The Committee considered no mitigating factors.

Pursuant to Section 8.3 of the Sanctions Procedures, the Committee also extended this sanction to the Respondent Affiliate, finding that the Respondent Affiliate was controlled by 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.