Corruption (MDB Definition)

The multilateral development banks define corruption as the offering, giving, receiving, or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party in the procurement or execution of a bank-financed contract.

What is Corruption (MDB Definition)?

The MDB definition captures both sides of a corrupt transaction: the entity that offers or gives a bribe and the one that solicits or receives it. "Anything of value" is interpreted broadly and includes cash, gifts, hospitality, employment offers, and non-monetary favours. The qualifying word "improperly" distinguishes routine legitimate business interactions from conduct designed to distort a procurement outcome.

This definition, harmonised across the five major MDBs through the mdb-harmonised-framework, treats corruption as one of five sanctionable-practices. A finding of corruption triggers the same debarment and cross-debarment consequences as fraud-mdb-definition. The definition is also broadly consistent with the foreign-corrupt-practices-act and the uk-bribery-act, although the MDB definition applies solely within the context of bank-financed projects rather than all international business.

Why Corruption matters for bidders

The practical risk for suppliers is that facilitation payments, gifts to government officials to speed up approvals, or entertainment that crosses a hospitality threshold all fall within this definition even if they are tolerated locally. Companies bidding on MDB-financed projects need an anti-corruption policy that covers local agents and subcontractors, not just their own staff, because the bank holds the prime contractor responsible for the full supply chain. A written code of conduct, gift and hospitality registers, and agent-engagement due diligence are minimum controls expected by integrity reviewers.

FAQ

Does the MDB definition cover payments made through an agent or intermediary?

Yes. The phrase "directly or indirectly" explicitly covers payments routed through agents, consultants, joint venture partners, or any other intermediary, so the prime contractor cannot avoid liability by outsourcing the improper payment.

Is a facilitation payment treated as corruption under MDB rules?

Yes. The MDB harmonised framework does not recognise a facilitation-payment exemption. Even small payments to expedite routine government services are within scope.

How does a corruption finding affect pending bids at other MDBs?

Under the cross-debarment agreement, a corruption finding at one of the five signatory banks results in automatic debarment across all five, so all pending bids at other MDBs are simultaneously affected.