The IDB sanctioned a Brazilian construction company for corruption for three years

The Inter-American Development Bank (IDB) has sanctioned a Brazilian construction company for three years for corrupt practices in projects in Brazil, reported The FCPA Blog.

With the sanction and for a period of three years, Constructora COESA S.A. and its 26 subsidiaries will not be able to participate in any project financed by the IDB.

The Brazilian construction company would have arranged for the submission of a bid by another company to simulate a scenario of competition for a contract. According to the IDB, with the knowledge of the act of corruption, the company did nothing and the contract was likewise awarded.

In addition, Constructora COESA S.A. paid bribes amounting to nearly $1.7 million to public officials whose function was to supervise and direct the conclusion of the contracts.

The same company, which in 2019 operated under the name of Grupo OAS, paid a sum close to $460,000 in a similar corruption case that also involved Brazilian authorities.

“As part of the agreement, Constructora COESA S.A. committed to reporting on its compliance program through an independent monitor and to continue its cooperation with the IDB's Office of Institutional Integrity,” reported The FCPA Blog.

“The disqualification qualifies for the cross-disqualification of the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the African Development Bank,” added the specialized media.

Last January, the IDB reported that, due to the current situation of the covid-19 pandemic, its annual meeting will be held by videoconference and not in person in Uruguay as planned.

The annual meeting of the Assemblies of Governors of the IDB and the Inter-American Investment Corporation (IDB Invest) will be held virtually between March 28 and April 1, the Washington-based institution said in a statement.

The Assemblies of Governors are the highest level policy-making bodies of the IDB and IDB Invest. Most governors serve as finance ministers, finance ministers or presidents of their country's central bank.

The event was originally scheduled for March 17-20 at the Uruguayan spa in Punta del Este, in a hybrid format (virtual and with a limited number of face-to-face participants), according to the IDB in October.

The last annual meeting of the Inter-American Development Bank was in March 2021 in Barranquilla, in northern Colombia. It was initially planned for March 2020, but was postponed twice due to the health emergency.

The IDB indicated that during the virtual event, economic and financial leaders from the institution's 48 member countries will discuss development challenges and opportunities in Latin America and the Caribbean.

Founded in 1959, the IDB is one of the main sources of long-term financing for the economic, social and institutional development of Latin American and Caribbean countries.

At the start of the third year of the covid-19 pandemic, several countries, including the United States, have begun to see a decline in cases associated with the wave of infections caused by omicron, the most transmissible variant detected so far, but the number of infections worldwide continues to increase.

Brazil's economic activity declined by 0.99% in January 2022 compared to December 2021, its largest decline in the last ten months, a result that confirmed projections that the GDP of the largest South American economy will suffer a sharp slowdown this year.

The so-called Economic Activity Index (IBC-BR), which is measured monthly by the Central Bank in an attempt to advance the trend of gross domestic product (GDP), fell by almost one percentage point in the first month of the year, from 139.85 points in December to 138.48 points in January, according to data released by the issuer on Thursday.

The retraction recorded in January placed Brazil's economic activity at its lowest level since December 2020 (138.18 points) and even below the level it had in February 2020 (139.36 points), before Brazil recorded its first case of covid and suffered the economic crisis generated by the pandemic.

As a result of the halt in activities caused by the health emergency, Brazil's economy shrank by 3.9% in 2020, its biggest drop in more than two decades, but it reacted last year, when GDP grew by 4.6%, its biggest rise in a decade.

But economists predict that recovery will not be sustained in 2022, by the time they expect a slight growth of 0.49%, due to different factors that threaten Brazil, such as rising inflation (10.54% year-on-year in February), high interest rates (at their highest level in five years) and uncertainty generated by the elections this year's presidential elections.

The Brazilian economy is also threatened this year by a still high level of unemployment, stagnant household income and consumption with a negative trend both due to inflation and the high cost of credit.

With information from The FCPA Blog and EFE

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