Research On The Determination Of Fraud And Corruption Under The World Bank Sanctions Regime

The World Bank has been working to combat fraud and corruption in its projects since its sanctions regime was established in 1996.The fraud and corruption criteria are the basis for the World Bank’s sanctions decisions.The analysis of fraud and corruption in the existing studies is relatively macro,lacking of empirical analysis of the World Bank sanction case,and mostly inclined to procedural research.This paper uses empirical research,case research and value analysis methods to analyze and summarize the determination standards of fraud and corruption,and puts forward more targeted and practical suggestions for Chinese enterprises to face the sanction.This paper mainly studies the World Bank fraud and corruption sanctions from four parts.The preface mainly introduces the research background,legal basis,research significance,the key problem to be solved,innovation and research methods of the World Bank fraud and corruption sanctions.The research status at home and abroad will introduce the current research results of fraud and corruption sanctions.The first part introduces the application of procedural law to the fraud and corruption determination.The subject of sanctions is "recipient of Loan funds" and its affiliated companies.Sovereign states are exempt from the sanctions.The World Bank sanctions not only wholly funded projects,but also partially funded projects,not only direct but also indirect actions.The Bank’s specific procedures for fraud and corruption determination include temporary suspensions,two-level quasi-judicial system,integrity compliance program,settlement,and voluntary disclosure programs.The World Bank uses a preponderance of evidence rule with a lower standard of proof to determine whether the perpetrator is "more likely than not" to commit the misconduct.The advantage of evidence is mainly reflected in the sufficiency of evidence quantity.The second part introduces the determination standard of fraud in the entity.The definition of fraud in the Bank’s normative documents continues to evolve.The current criteria of fraud determination of Sanctions Board mainly include four elements:behavior pattern,subjectivity,purpose and behavior effect.Behavior pattern refer to "acts and omissions",which mainly include forgery of bid guarantee,omission of information,distortion of relevant experience,and false representation of the role relationship between project parties.Subjective requirements refer to"knowingly or recklessly".The Advisory Opinion of the General Counsel of the World Bank,the anti-Corruption Guidelines and the jurisprudence of the Sanctions Board have different application standards for the principle of "duty of reasonable care" in determining recklessness.Objective requirement refers to "to obtain a financial or other benefit or to avoid an obligation".In practice,it mainly considers the actual meaning of bidding requirements and the subjective aspect of the doer.Behavioral effect elements refer to "mislead,or attempt to mislead".In practice,it is not required to prove that public officials have been actually misled,but focus on identifying that the doer has the subjective intention of "attempt".The third part introduces the determination standard of corruption in the entity.The definition of corruption in the Bank’s normative documents has gradually broadened.The current standards for determining corruption in the Sanctions Board mainly include three elements:behavior pattern,object and purpose.Mode of conduct is defined as "directly or indirectly offering,giving,receiving or soliciting",and indirect corruption is also covered by the sanctions.The act includes offering and giving all or part of the benefit,and also includes promising to provide the benefit."Silence" under certain conditions also constitutes "offering" and "giving".The determination of silent behavior should consider the relevant context comprehensively."soliciting" does not require the doer to seek benefits only for himself,but also includes the situation of asking for bribes for the third party.Object refers to"anything of value",including property interests and non-property interests.The objective requirement refers to "influence improperly the actions of another party".The determination of this requirement attaches importance to the doer’s subjective intention of "influencing" public officials.The "another party" is the person who has influence on the project,and the briber does not need to know its specific identity accurately.Duty behavior refers to the behavior of the briber handling official duties based on his status.Duty behavior in the determination of corruption includes not only improper behavior but also legitimate behavior.The fourth part introduces the countermeasures of Chinese enterprises under the World Bank’s fraud and corruption sanctions.China is the country with the largest number of companies sanctioned by the World Bank.The main reason can be analyzed from the procedure and entity standard of sanction.In terms of procedures,Chinese enterprises lack the enthusiasm to participate in procedures and take relief measures.In the entity,it is because the enterprise does not understand the normative documents and entity determination criteria clearly and the integrity consciousness is weak.From the perspective of procedure,Chinese enterprises should actively respond to the lawsuit and cooperate with the investigation,rationally use the relief measures,improve the construction of enterprise integrity and compliance,take the initiative to correct misbehavior,and make good use of the settlement and voluntary disclosure plan system.Chinese enterprises should also improve the awareness of integrity and put forward targeted and specific defense according to the entity determination standard.