World Bank Sanctions Russian Company “OOO Armada Center” and “OAO Armada” for Fraudulent Practices Impacting an Environmental Project in Russia
May 6, 2014
WASHINGTON, May 6, 2014—The World Bank Group announced the debarment of OOO Armada Center (formerly known as OOO RBC Center) for a period of two years. Additionally, OOO Armada Center’s parent company OAO Armada received a letter of reprimand for failure to supervise its subsidiary. Both companies were sanctioned for fraudulent practices for the failure to disclose a conflict of interest in a proposal submitted by OOO Armada Center.
The World Bank investigation revealed evidence that a director on the Board of OAO Armada was also engaged as an Executive Director by the implementing unit for the project at the time OOO Armada Center submitted its proposal. Meanwhile, measures were taken to remedy issues in the project, which was subsequently completed successfully. Some of the project outcomes included increasing the lead time for national and regional weather forecasts, reaching higher resolution of operational forecasts, increasing the percentage of stations reporting to global telecommunications networks on time, and reducing the average response time to users of the national archive, among others. Currently, the World Bank is supporting a follow up operation to further enhance the information systems for weather, climate and meteorological forecasting.
“This case is a clear demonstration of how conflict of interest can compromise the integrity of development decisions and what preventive and remedial action can do to reverse that. Such misconduct is a major challenge to delivering project results and will not escape our radar screen,” said Leonard McCarthy, World Bank Integrity Vice President.
The debarment of OOO Armada Center qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.