Originally published by The FCPA Blog.
The World Bank Group has done much work in recent years to improve its agility in operations to work smarter for greater results for our clients. The institution’s Sanctions System has been no exception. The Sanctions Board, in particular, has endeavored to be ever more agile and adaptive – including through holding hearings and resolving cases virtually during the Covid-19 pandemic.
Despite the efficient and expeditious manner in which the Sanctions Board reviews and resolves cases in its normal course, the increasingly rapid pace of the world makes it plausible to imagine circumstances where parties in a case seek a speedier decision by the Sanctions Board.
Consider a situation where a respondent has decided to contest a World Bank Group (WBG) sanctions case to the Sanctions Board while it is at the same time selling a subsidiary within its corporate group. Whether the respondent and its target subsidiary are ultimately sanctioned would no doubt be a material consideration for purposes of that corporate transaction. Consider another situation where a WBG sanctions case is proceeding in parallel with national litigation in which the same misconduct is being reviewed. In that scenario, the other decision-maker might wish to calibrate its own punishment or sanction based on the outcome of the WBG case.
In hypothetical scenarios, such as these, could the Sanctions Board offer expedited reviews or grant provisional relief beyond its current practice?
Dispute resolution systems commonly provide for temporary or provisional resolution of matters on an expedited basis. For instance, some national courts issue temporary restraining orders (TROs) during pending litigation where the requesting party has demonstrated likely success on the merits and a chance of damages without the TRO. In some conflict resolution systems, governing rules are flexible enough for the decision-maker to tailor and streamline processes as needed.
The WBG’s Sanctions System already includes an analog to a typical national litigation system TRO. That analog is an early temporary suspension, a special mechanism for suspending firms and individuals from eligibility to participate in Bank Group-financed projects. Such early temporary suspensions are imposed on the subject of a sanctions investigation before the commencement of formal sanctions proceedings if the relevant first-tier officer finds that there is already sufficient evidence that the subject has engaged in at least one sanctionable act.
Early temporary suspension is an exceptional remedy intended to protect the WBG’s funds from respondents deemed to pose serious integrity risks, even before a formal case has been filed against the respondent. While such a mechanism mitigates the risk of misuse of WBG funds, might there be circumstances where respondents’ interests could be comparably served through provisional relief or expedited processes?
Interestingly, the World Bank’s Sanctions Procedures do not explicitly contemplate a mechanism for parties to request even more expedient treatment or provisional relief from the Sanctions Board. The Sanctions Procedures set deadlines for primary written submissions, but are otherwise silent as to the timing of, among other things, any oral hearings and issuance of the Sanctions Board’s final published decisions. And, although the Sanctions Procedures do explicitly vest the Sanctions Board with discretion to grant extensions of the prescribed deadlines for primary written submissions, they do not address the Sanctions Board’s authority to shorten those same deadlines if so requested.
Significantly, however, the WBG Sanctions Board Statute does provide that in all matters not specifically addressed by the governing Sanctions Framework, the Sanctions Board follows the instructions of the Sanctions Board Chair for its operations. In past cases, the Sanctions Board Chair has looked to this provision of the Statute in addressing requests by respondents not expressly permitted or prohibited by the Sanctions Framework.
Let’s look again at the hypothetical raised above where the respondent is contesting a sanctions case while at the same time managing the sale of a subsidiary entity. One could imagine a situation in which the respondent requests an expedited interim determination that the scope of any sanction be limited to a specific business line or entity – not including the subsidiary being sold, which it argues was in no way implicated in the misconduct. Resolution of that issue could allow the corporate transaction to proceed with clarity on the status of the subsidiary even before the case against the respondent was fully adjudicated.
Confronted with such a request, the Sanctions Board and Chair could then determine whether to resolve the request on an expedited interim basis – perhaps invoking the gap-filling provision of the Statute discussed above – or simply decide on the scope of sanctions only in its final published decision on the merits, as it typically does. Considerations underpinning the appropriateness of expedited review on the scope of sanctions in this scenario might include any prejudice that might result from delay, potential irreparable harm to a party, and general timeliness and efficiency.
Indeed, these are the types of factors that the Sanctions Board often considers in other contexts to ensure a fair, just, and transparent process. Although the Sanctions Board has yet to be presented with such a request, the Sanctions Framework may already be flexible and agile enough, particularly through the gap-filling provision of the Sanctions Board Statute, for the Sanctions Board to entertain and resolve requests for interim expedited relief.
Even as such questions remain in the hypothetical realm, there is value in looking at the Sanction Board’s processes, frameworks, and statutes with fresh eyes to ensure we can continue to work to fairly resolve the cases before us in an efficient, effective, and fair manner.
Giuliana Dunham Irving is the Executive Secretary to the Sanctions Board at the World Bank Group.
Ryan Velandria McCarthy is Senior Counsel at the World Bank Group Sanctions Board Secretariat.