IFC's Due Diligence Process

IFC conducts integrity due diligence (“IDD”) on its business clients and partners as described in this booklet. This is similar to the “Know Your Customer” process used in the financial industry. IDD is critical to ensure that IFC works with reputable and sustainable business partners so that its investments are successful, its resources are used effectively, and its development objectives are met

Tax evasion is unacceptable in any part of a transaction in which IFC is involved. IFC exercises due diligence to confirm that the structures in which it invests are chosen for legitimate reasons and are not being used for tax evasion, abusive tax practices, or other illegitimate purposes. 

IFC is at the forefront of the market and of development institutions in guarding against fraud and corruption in its projects. This approach complements and supports IFC's determination to act as a leader on sustainability. Avoiding fraud and corruption is necessary to ensure that IFC's investments are successful, that its resources are being used effectively, and that its development objectives are met. 

IFC engages in a broad range of activities in support of its development mission, including providing advisory services to governments and private clients and making investments (debt, equity or hybrid) in clients. As a result of this broad range of activities, there is a risk that actual or perceived operational conflicts of interest can arise.  An IFC operational conflict of interest can arise if IFC engages in multiple roles in connection with the same project or sector. IFC is committed to properly manage such operational conflicts to ensure that our interests and the client's – whether it is a government or private entity – remain aligned and that we do not compromise our responsibilities to clients. 

Many IFC staff worked in the private sector before joining IFC and many go on to make valuable contributions in the private sector after leaving IFC. We consider this a strength of our institution. We manage such staff transitions with great care. IFC has procedures and follows World Bank Group ethics policies to mitigate potential conflicts of interest when senior staff leave IFC and join organizations that may have an investment or advisory relationship with IFC.