The World Bank’s Wide Reach and Its Growing Anti-Corruption Program

“What is the World Bank and why do I care what it thinks?”  Tim Coleman, a partner at Freshfields Bruckhaus Deringer, told the Anti-Corruption Report that many clients have that question – often prompted by an unexpected notice from the World Bank.  Companies that have contracted with foreign governments on a World Bank-financed project, along with companies that have signed deferred prosecution agreements with the DOJ containing a World Bank cooperation clause, may have put themselves in the World Bank’s jurisdiction.  “Any company or individual who touches my money is subject to the jurisdiction of my office,” Stephen Zimmermann, Director of Operations of the Integrity Vice Presidency of the World Bank, said at a speech at the American Conference Institute’s FCPA conference in New York.  And, he said, “just about every developing country project has World Bank money.”  The World Bank, which made $35 billion in loans last year to tens of thousands of contractors, is increasingly using its economic and political leverage to enforce its rules against fraud, collusion, obstruction, corruption and coercion. Penalties include not only debarment from the World Bank and the other major global development banks, but because the World Bank cooperates with governments around the world, investigations and potential penalties under national anti-corruption regimes.  Recently, a panel of World Bank experts at the Practising Law Institute’s FCPA and International Anti-Corruption Developments program, including Zimmermann, addressed critical issues about the Bank and its investigations.  One of the panelists, Tim Coleman, a partner at Freshfields, along with associate Jonathan Ware, further spoke with the Anti-Corruption Report about the challenges companies may face when the Bank investigates them and whether it makes sense for companies to settle.  See also “Doing Business with the World Bank: Understanding and Avoiding Debarment” (May 15, 2013).

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