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« Microsoft and Wal-Mart seek ISO 37001 Anti-Bribery Certification | Main | Is corporate bribery more like a car accident or an airplane crash? »
Thursday
May112017

World Bank debars China construction companies, Romania medical equipment supplier

The World Bank announced the debarment of two China construction companies and a medical equipment supplier in Romania.

Zhengtai Group Co. Ltd. and 20 affiliates were debarred for 15 months.

An investigation revealed the company's fraudulent misconduct in connection with the Anhui Xuancheng Infrastructure for Industry Relocation Project in China.

Zhengtai Group's bid included a falsified document. The World Bank disqualified the bid at the evaluation stage.

Zhengtai, known in Chinese as 正太集团有限公司, entered into a Negotiated Resolution Agreement with the World Bank.

Also debarred for 15 months was Hunan Shaping Construction Co., Ltd. (湖南省沙坪建设有限公司), sometimes known as Sunpeak Construction.

The World Bank said it submitted "a falsified bid guarantee letter" in its bid for the Integrated Economic Development of Small Towns Project in China. The company was awarded the contract but withdrew before contract signing. 

The World Bank also announced the debarment of Romania-based Tehnoplus Medical S.R.L for two years.

A World Bank investigation found evidence that Tehnoplus paid €68,860 (about $74,000) in bribes in exchange for an equipment supply contract under the Romania Health Sector Reform 2 Project.

Tehnoplus Medical also entered into a Negotiated Resolution Agreement.

Under the terms of the Negotiated Resolution Agreement, Tehnoplus agreed to cooperate with the World Bank Group Integrity Vice Presidency and meet the Bank's Integrity Compliance Guidelines (pdf).

The debarments, all announced on May 5, qualify for cross-debarment by other Multilateral Develpment Banks under the 2010 Agreement of Mutual Recognition of Debarments.

The parties to that agreement are the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group.

A list of all firms currently debarred by the World Bank is here.

Sanctioned firms aren't eligible for World Bank-financed contracts, according to the Bank's fraud and corruption policy in the Procurement Guidelines (pdf) or the Consultant Guidelines (pdf).

The suspension and debarment process is conducted under the Bank's Sanctions Procedures (pdf).

_____

Richard L. Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (1)

While the Bank's news posting reports that Tehnoplus received a 2-year debarment, the public debarment list reflects that it is debarred for a minimum period of 2 years, after which it may seek reinstatement on certain conditions- in effect debarment with conditional reinstatement:

"The minimum period of ineligibility is the 24 months indicated in the posting above; provided, however, that after this minimum two-year period, (Tehnoplus) may be released from ineligibility only if it has demonstrated to the World Bank Group’s Integrity Compliance Office (ICO) that it has: (a) met the corporate compliance conditions to the satisfaction of the ICO; (b) fully cooperated with the Bank; and (c) otherwise fully complied with the terms and conditions of the NRA."

Additionally, the sanction "extends to any legal entity that (Tehnoplus) directly or indirectly controls."

See Note *366 at http://pubdocs.worldbank.org/en/387181466627871302/World-Bank-Notes-on-Debarred-Firms-and-Individuals.pdf

The specifics of sanctions noted in the public debarment list are typically lifted straight out of the governing Negotiated Resolution Agreements. Consequently, the reference in the news posting to "the 24 months indicated in the posting above..." suggests that the (incorrect) characterization of the debarment contained in the Bank's news posting was intentional, and contemplated in the settlement agreement.
May 11, 2017 | Unregistered CommenterTom McCarthy
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