DECEMBER • 2022 We are pleased to share with you several changes to the membership of the Sanctions Board and the management of the Sanctions Board Secretariat. Ms. Maria Vicien Milburn (Argentina, Spain) was officially appointed as Sanctions Board Chair on May 20, 2022. Ms. Milburn is the first woman to Chair the Sanctions Board since it was fully constituted in 2007. After a rigorous recruitment process, the Board of Directors approved the appointment of Mr. Philip Daltrop (United Kingdom, Germany), who will serve on the Sanctions Board as an IDA/IBRD appointee for a five-year term. Mr. Daltrop brings 35 years of experience as an international lawyer, mostly spent in a variety of legal, procurement, and integrity functions at several multilateral development banks. He worked at the Asian Development Bank for 20 years, heading its procurement, integrity, and internal audit offices, and retiring as Deputy General Counsel in 2011. Since then, he has worked as a legal consultant based in London and Jakarta, undertaking assignments for the World Bank, the Asian Infrastructure Investment Bank, and other organizations. Earlier in his career, he worked for a decade in the London, Brussels, and Tokyo offices of Allen & Overy, the legal department of the UK Foreign and Commonwealth Office, as a finance lawyer for Inter-American Development Bank, and as a project lawyer for the World Bank. He holds an undergraduate degree in Philosophy, Politics and Economics (First Class), and a master’s in International Human Rights Law (with Distinction), both from Oxford University. He also completed postgraduate legal examinations and training as an English solicitor in London. Mr. Daltrop’s appointment follows the end of Mr. John Raymond Murphy’s (South Africa) term. Mr. Murphy served as Sanctions Board Chair from November 2019 to January 2022, and ended his term as a Member in October 2022. We are immensely grateful for Mr. Murphy’s invaluable contributions to WBG sanctions system and for his leadership of the Sanctions Board. We are pleased to welcome Ms. Jodi Glasow as the new Executive Secretary to the Sanctions Board. The Secretariat is grateful for Ms. Giuliana Dunham Irving's leadership, dedication, and excellent service to the Sanctions Board since 2016. SANCTIONS BOARD DECISION In this decision, the Sanctions Board imposed a sanction of debarment for a period of two years on NO. 136 a respondent individual. The respondent was the managing director of a company that won a Bank- financed contract under the relevant project. Country and Projects: : Romania, Avian Influenza Control and Human Pandemic Allegations, evidence, and findings: INT alleged that the respondent made a corrupt payment to a Preparedness and Response Project—to Bank consultant through an intermediary in order to influence the award of the relevant contract. reduce the threat of, prepare for, control INT also alleged that the respondent failed to disclose agent commissions in the bid. With respect to and respond to influenza pandemics and the first accusation, the respondent admitted to paying a percentage of the contract to an other infectious disease emergencies. intermediary but denied being aware that any amounts would be transferred to the Bank consultant. However, the respondent himself had stated during INT’s investigation that the purpose of the Panel Members: Rabab Yasseen (Chair), payment was to ensure that the Bank consultant would not cause undue delays in the procurement Adedoyin Rhodes-Vivour, and Eduardo process. In addition, the Sanctions Board concluded that the circumstances of the payment, Zuleta including its close time proximity to the signature of the contract, further demonstrated the respondent’s corrupt intent. With respect to the second accusation, the respondent conceded that his company had paid a commission to a third party and that he signed the company’s bid without disclosing this information. Nevertheless, the respondent argued that this payment was not subject to disclosure because the third party did not act as his company’s agent. The Sanctions Board rejected this defense, noting that the respondent’s reading of the term “agent” was too narrow and that, in any case, the applicable disclosure requirements comprised payments to any firms or individuals. With respect to both accusations, the respondent raised that he, his company, and others had been exonerated in national legal proceedings relating to the same facts. The Sanctions Board was unpersuaded, noting that national law standards and judgments are not binding on the Bank. The Sanctions Board found the respondent liable for corrupt and fraudulent practices. Sanctioning analysis: In its sanctioning analysis, the Sanctions Board applied aggravation based on the respondent’s sophisticated means of misconduct, and mitigation for the significant passage of time since the relevant events. The Sanctions Board declined to apply aggravation for repetition, management’s role, involvement of a public official, and lack of candor. SANCTIONS BOARD DECISION In this decision, the Sanctions Board imposed sanctions of debarment with conditional release on a NO. 137 company and its managing director, with minimum periods of ineligibility of three years for the respondent firm and one year and six months for the respondent individual. The respondent firm was part of a joint venture that submitted six bids and won two contracts under the relevant project. Country and Projects: Republic of Kenya, the Electricity Modernization Project—to Allegations, evidence, and findings: INT alleged that the respondents failed to disclose commissions increase access to electricity, improve paid to a consultant and submitted forged documents relating to the respondent firm’s finances and reliability of electricity service, and experience. The respondents admitted to these misrepresentations but claimed no intent to mislead. strengthen the financial situation of Kenya Instead, the respondents asserted that the consultant and a former employee had prepared the bids Power & Lightning Company Ltd. and engaged in the misrepresentations in violation of clear instructions and company policy. The respondents further argued that the respondent individual had relied on the work of the consultant Panel Members: John R. Murphy (Chair), and former employee, and signed the documents without any supervision or verification. However, Cavinder Bull, and Eduardo Zuleta the totality of the evidence, considering in particular the circumstances and nature of the misrepresentations, indicated that the respondents intended to mislead the relevant authorities. For example, the respondents signed the consultancy agreement and made the undisclosed payment in close time proximity to the submission of the bids—indicating knowledge of the fraudulent omission. Alternatively, documents showed that the respondent firm had previously identified the risk that the consultant might make misrepresentations on the respondent firm’s behalf, yet the respondents admittedly failed to implement any controls to mitigate this risk—indicating at least recklessness. The respondents also argued that the respondent firm was not responsible for the acts of the consultant, who was an independent contractor, or the former staff, who purportedly acted as a rogue employee. The Sanctions Board found the respondent firm responsible for the acts of its employees and explicitly rejected the rogue employee defense, observing that the respondent firm failed to show that it had effectively implemented controls existing at the time of the misconduct. In light of these findings, the Sanctions Board declined to consider arguments based on the acts of the consultant. The Sanctions Board found the respondent firm liable for all misrepresentations, and the respondent individual liable for the failure to disclose the payment to the consultant. Sanctioning analysis: In its sanctioning analysis, the Sanctions Board applied aggravation for the severity of the respondent firm’s conduct (repetition, management’s role). The Sanctions Board applied varying levels of mitigation for the respondent’s corrective measures (internal action against responsible individuals, effective compliance program), cooperation (assistance and/or ongoing cooperation, internal investigation, voluntary restraint), and the passage of time since the misconduct. The Sanctions Board declined to grant any mitigating credit for asserted factors that were not supported by the record (minor role), were redundant with other mitigating factors (cessation of misconduct, voluntary disclosure), or were not related to the respondents’ culpability or responsibility for the sanctionable practices at issue (project completion). SANCTIONS BOARD DECISION In this decision, the Sanctions Board imposed a sanction of conditional non-debarment on a NO. 138 respondent firm. The respondent must comply with the conditions of non-debarment within two Country and Project: Republic of Liberia, years from the date of the decision. In case of non-compliance within this prescribed period, the the Integrated Public Financial respondent shall be automatically placed under debarment with conditional release for a minimum Management Reform Project (to improve period of two (2) years and nine (9) months. budget coverage, fiscal policy management, financial control, and Allegations, evidence, and findings: INT alleged that the respondent made two corrupt payments oversight of government finances) and the to a public official in order to influence the procurement or execution of five Bank-financed Integrated Public Financial Management contracts. The respondent acknowledged that the payments were made but claimed no corrupt Reform Project II (to improve public intent and denied responsibility for this conduct. According to the respondent, the payments resources management and accountability). constituted legitimate personal loans from one of its employees to the public official. The respondent also argued that its senior management did not authorize, condone, or know of the Panel Members: Maria Vicien Milburn payments prior to INT’s investigation, and that the employee’s conduct violated its corporate (Chair), Michael Ostrove, Adedoyin policies (i.e., he was a “rogue employee”). The Sanctions Board found that the totality of the Rhodes-Vivour evidence sufficiently demonstrated corrupt intent. For example, the respondent’s own financial records provided direct evidence of a connection between the payments and the respondent’s business interests. Moreover, the record showed that the public official played a key role in the procurement processes under the projects and was directly involved in the negotiations of at least two of the relevant contracts—indicating a course of dealing between the public official and the respondent. The Sanctions Board also found that the respondent was liable for the conduct of the employee in question. Notably, the respondent failed to prove that it had implemented internal controls reasonably sufficient to prevent or detect the sanctionable practice at issue. In addition, the record showed that the employee was acting within the course and scope of his employment and that he was serving the respondent’s interests when he made the corrupt payments. Sanctioning analysis: In its sanctioning analysis, the Sanctions Board applied aggravation for the respondent’s repeated pattern of conduct and some mitigation for the respondent’s cooperation with INT’s investigation. The Sanctions Board declined to apply aggravation for management’s role. SANCTIONS BOARD DECISION In this decision, the Sanctions Board imposed a sanction of debarment with conditional release for NO. 139 a minimum period of two years and ten months on a respondent individual. The respondent was a Country and Project: Republic of public official acting under the projects pursuant to several Bank-financed consultant agreements. Liberia, the Integrated Public Financial Management Reform Project (to improve Allegations, evidence, and findings: INT alleged that the respondent engaged in corrupt and budget coverage, fiscal policy collusive practices relating to two different companies. According to INT, the respondent received management, financial control, and two corrupt payments from the first company in order to influence the procurement or execution of oversight of government finances) and the five Bank-financed contracts. INT also argued that the respondent entered into an arrangement Integrated Public Financial Management with the second company in order to stifle open competition and influence the procurement and Reform Project II (to improve public award of a Bank-financed contract. With respect to the alleged corrupt practice, the respondent resources management and accountability). challenged INT’s evidence that the payments were made. The respondent also argued that the first company had no reason to bribe him and that he was not in a position to exercise the alleged Panel Members: Maria Vicien Milburn influence. The respondent admitted to the alleged collusive practice. The Sanctions Board held the (Chair), Michael Ostrove, Adedoyin respondent liable on both counts. First, the record sufficiently demonstrated that the respondent Rhodes-Vivour received the payments from the first company with corrupt intent. For example, the first company’s own financial records provided direct evidence of a connection between the payments to the respondent and the first company’s business interests. Moreover, the record showed that the respondent played a key role in the procurement processes under the projects and was directly involved in the negotiations of at least two of the relevant contracts—indicating a course of dealing between the respondent and the first company. Second, the totality of the evidence—including correspondence, draft and final bidding documents, statements from the second company’s staff, and the respondent’s own admissions—supported a finding that the respondent engaged in a collusive arrangement in order to favor the second company improperly in the procurement of a relevant contract. Sanctioning analysis: The Sanctions Board applied aggravation for the respondent’s repeated pattern of corrupt payments. The Sanctions Board granted mitigation for the respondent’s cooperation with INT’s investigation and for the respondent’s minor role in, and admission to, the collusive practice. The Sanctions Board declined to grant mitigation based on the respondent’s professional certifications. (*) The full text of final published decisions is the primary authority on the Sanctions Board’s analysis and determinations in a sanctions case. Summaries of Sanctions Board decisions provided in this newsletter are the work product of the Sanctions Board Secretariat and do not supersede or complement the text of final published decisions, which is publicly accessible as referenced above.  Sanctions System Annual Report In October 2022, the WBG issued the FY22 Sanctions System Annual Report highlighting contributions from the Integrity Vice Presidency, the Bank’s Office of Suspension and Debarment, the Sanctions Board, and the Integrity Compliance Officer (ICO). Engagement with Multilateral Development Banks (MDB) In July 2022, the Secretariat and the ICO hosted a workshop on integrity compliance issues. This virtual session was attended by compliance staff, first-tier officers and appellate body secretariats of the Asian Development Bank, African Development Bank Group, European Bank for Reconstruction and Development, and Inter-American Development Bank. The Secretariat and the ICO led the group in discussing conditions for release from sanction, integrity compliance challenges for small and medium enterprises, and an overview of integrity compliance in the sanctions systems of MDBs. Hybrid operations Beginning July 5th, the World Bank Group headquarters shifted to its hybrid work pilot, with staff working in the office between two to four days per week. The Sanctions Board and the Secretariat have also adopted a hybrid model, including in its hearings. Last June 2022, the Sanctions Board convened a hybrid hearing with some parties participating in person and others remotely. The Sanctions Board and the Secretariat are witnessing a variety of changes during the first half of the fiscal year. As we welcome new faces and say goodbye to familiar ones, we thank the people who devote their service to the sanctions system and to the larger fight against fraud and corruption. As we finally see colleagues and counterparts in person after a long period of virtual interaction, we renew our commitment to forging collaborations and building knowledge within and outside the World Bank Group. And as we near the end of 2022 and prepare for the new year to come, we look back at all the challenges we overcame during the height of the pandemic and look forward to all the work that lies ahead with renewed optimism and dedication. As always, we welcome any questions, reactions, or suggestions for future editions. Please reach out to us via sanctionsboard@worldbank.org. With warm regards, Maria & Giuliana Unsubscribe from this list