[{"data":1,"prerenderedAt":301},["ShallowReactive",2],{"news-europe039s-defence-windfall-will-it-survive-the-corruption-test-2931":3,"news-europe039s-defence-windfall-will-it-survive-the-corruption-test-2931-similar":40,"i-heroicons:arrow-left-20-solid":296},[4],{"id":5,"status":6,"date_created":7,"date_updated":8,"title":9,"type":10,"body":11,"date":12,"topic":13,"slug":15,"activity":16,"nid":18,"topics":19,"activities":20,"programme":21,"area":21,"websites":21,"language":22,"image":23,"translation_of":21,"countries":34,"tags":35,"authors":36,"images":37,"translations":38,"content":39},10600,"published","2026-02-27T15:07:17.000Z","2026-04-15T22:28:53.000Z","Europe's defence windfall: will it survive the corruption test?","Blog","_Reflections by Francesca Grandi, PhD (Transparency International Defence & Security), Elizabeth Andersen and Juhani Grossmann (Basel Institute on Governance) from the Munich Security Conference 2026._\n\nEurope’s ambitious defence spending plans will only pay off if corruption risks are taken seriously. At our joint roundtable at the Munich Security Conference, industry and political leaders agreed: transparency and strong anti-corruption safeguards are essential if higher spending is to deliver technological innovation, real security gains and voter trust. It is time to place integrity at the centre of Europe’s defence agenda.\n\nAt the 2026 Munich Security Conference, political leaders spoke with urgency about readiness, deterrence, industrial capacity and the need to mobilise unprecedented levels of public and private financing. The tone was sober, the geopolitical risks real and the commitments delivered with a sense of urgency. \n\nThe presence of the defence industry was impossible to miss. Private sector actors were actively engaged in shaping the debate, not only across panels and more informally, but also with a [gigantic billboard](https:\u002F\u002Fwww.gettyimages.nl\u002Fdetail\u002Fnieuwsfoto%27s\u002Fan-advertisement-for-helsing-gmbh-near-the-venue-for-the-nieuwsfotos\u002F2260760403) “We Got This” directly in front of the conference venue. \n\nWhat we _didn’t_ get was much focus on governance.\n\n### With money comes responsibility – and corruption risks\n\nEurope’s defence architecture is being reshaped at historic speed and scale. As we convened our joint [roundtable](https:\u002F\u002Fti-defence.org\u002Fti-ds-munich-security-conference-2026\u002F), _Get the Balance Right: Capability, Integrity and Effectiveness in Europe’s Emerging Defence Architecture_, one theme stood out: this build-up is vital to European security. But it is also a systemic governance test.\n\nThe scale of financing under discussion is enormous. Meeting Europe’s defence commitments is estimated to require additional financing of around 2 percent of EU [GDP](https:\u002F\u002Fwww.ecb.europa.eu\u002Fpress\u002Fblog\u002Fdate\u002F2025\u002Fhtml\u002Fecb.blog20250725~f26b4ef0f3.en.html). At this magnitude, even small governance gaps could translate into billions lost to misallocation, corruption, or fraud. Governance infrastructure must scale in line with spending.\n\nAccelerated procurement, emergency procedures and exceptional budgetary tools are being justified with the urgency of the task, which is understandable. But without enhanced safeguards, they risk:\n\n*   heightening fragmentation, overpricing, undue influence, and fiscal distortion; \n*   weakening transparency and reducing opportunities for civic monitoring; and \n*   limiting the parliamentary and independent oversight that is necessary to maintain the democratic legitimacy of defence investments.\n\n### More spending doesn’t mean more security\n\nThe lesson from past [crises](https:\u002F\u002Fwww.cambridge.org\u002Fcore\u002Fjournals\u002Fjournal-of-public-policy\u002Farticle\u002Fcan-bigger-health-budgets-cushion-pandemics-an-empirical-test-of-covid19-deaths-across-the-world\u002F34DA705F15995903F26A72C4E33C9DDE) is clear: spending more does not automatically deliver more security. Defence build-up without governance produces predictable and avoidable [risks](https:\u002F\u002Fti-defence.org\u002Fgdi\u002F). Transparency and oversight are not luxuries – they are force multipliers.\n\nThis is not a marginal issue. Weak governance undermines defence readiness as surely as underinvestment does. It erodes public trust. It fuels political polarisation. It creates openings for foreign interference and [strategic corruption](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg37). And it risks turning today’s security investments into tomorrow’s legitimacy crises.\n\nAcross panels and side conversations, we repeatedly heard that “the money is there.” What remains contested is how to spend it wisely. How to balance speed with scrutiny? How to ensure that urgent injections of capital do not come at the expense of robust internal controls? How can transparent spending foster flexibility and innovation in defence technology?\n\n### Acknowledging the problem is the first step to solving it\n\nAt our event in Munich, participants spoke candidly about the tension between scaling production and modernising compliance systems, the political consequences of potential scandals and the perceived trade-offs between oversight and urgency. \n\nIn separate [conversations](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fukraines-place-europes-defence-industry-could-compliance-catalyse-integration), Ukrainian partners described the dual challenge of mobilising wartime production at the same time as they are strengthening anti-corruption standards, all the while living and working under existential threat. \n\nOne structural risk clearly stands out: no single authority is responsible for safeguarding integrity across Europe’s evolving defence ecosystem.\n\nBut how do we embed integrity into the EU's defence architecture?\n\n*   First, protect a transparency baseline, even under urgency. Accelerated procedures cannot mean suspended scrutiny. Parliamentary access to information, audit trails, and structured civilian oversight must remain operational. Where secrecy is required, tailored transparency can still reinforce accountability, especially when normal procurement rules are set aside. \n*   Second, hardwire integrity into new defence financing tools. From day one, EU and national instruments should require machine-readable procurement data, beneficial ownership disclosure, conflict-of-interest controls, and interoperable oversight systems. \n*   Third, regulate influence where money and policy meet. Public–private cooperation should not blur lines of accountability. As industry access expands, so must lobbying transparency, cooling-off periods, and enforceable revolving-door rules. \n*   Fourth, align regulation with effectiveness. Smart, predictable standards reduce risk premiums, limit market distortion, and create fair entry points to stimulate innovation.\n*   Fifth, designate a clear political authority responsible for governance of Europe’s defence architecture. A harmonised anti-corruption framework requires defined leadership. Otherwise, oversight will continue to fall between institutions and funding mechanisms.\n\n### Is Europe serious about governance and democratic accountability?\n\nMSC 2026 demonstrated that Europe is serious about rearmament. The question now is whether it is equally serious about governance.\n\nEuropean citizens will only support sustained defence spending, and the social trade-offs that come with it, if they trust that resources are used strategically and with integrity. That trust can only be secured through robust oversight, transparency, and accountability. \n\nIf we are committed to long-term security – beyond the announcements and beyond Munich – then integrity must move from the margins to the centre of the agenda.\n\nThe task ahead is clear: get the balance right, and make governance a core pillar of Europe’s emerging defence architecture.\n\n_We are grateful to Norway for supporting this roundtable and [related programming](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fstrengthening-integrity-ukraines-natural-resources-energy-and-defence-sectors-norways-support)._\n\n_This blog and additional photos are also published on the Transparency International Defence & Security website [here](https:\u002F\u002Fti-defence.org\u002Feuropes-defence-windfall-will-it-survive-the-corruption-test\u002F)._","2026-02-18",[14],"","europe039s-defence-windfall-will-it-survive-the-corruption-test-2931",[17],"Insights",2931,[],[17],null,"English",{"id":24,"storage":25,"filename_disk":26,"filename_download":27,"title":28,"type":29,"created_on":7,"modified_on":7,"charset":21,"filesize":30,"width":31,"height":32,"duration":21,"embed":21,"description":21,"location":21,"tags":21,"metadata":33,"focal_point_x":21,"focal_point_y":21,"tus_id":21,"tus_data":21,"uploaded_on":7},"737092c2-e1b7-4580-ab14-4ce24e90ee8d","local","737092c2-e1b7-4580-ab14-4ce24e90ee8d.webp","tmp.webp","Europe's defence windfall: will it survive the corruption test?","image\u002Fwebp",14204,800,533,{},[],[],[],[],[],[],[41,80,107,129,159,191,220,246,273],{"id":42,"body":43,"status":6,"type":10,"date":44,"slug":45,"title":46,"image":47,"countries":48,"topic":50,"activity":51,"tags":53,"nid":66,"topics":67,"activities":69,"authors":70,"images":72,"websites":21,"area":21,"programme":21,"language":22,"translations":73,"translation_of":21,"user_created":74,"date_created":75,"user_updated":76,"date_updated":77,"content":78,"link":79},10578,"_Ukraine is already central to Europe’s security. Its defence manufacturers are increasingly eligible for participation in the rapidly growing EU defence procurements. However, unless Ukraine’s defence manufacturers are able to meet strict EU anti-corruption and ESG standards, they risk being shut out of EU supply chains. Europe needs Ukraine’s battlefield-tested innovation and production capacity, yet compliance gaps and unclear expectations are slowing integration. Juhani Grossmann, who leads the Basel Institute’s anti-corruption programme in Ukraine, explains how joint actions to overcome compliance barriers can help secure Ukraine’s place in Europe’s defence ecosystem and strengthen our collective security._\n\n### Ukraine’s central role in EU defence\n\nThe last three and a half years have been hard fought in Ukraine. Ukrainian resilience on the battlefield is legendary. The unparalleled military support from Ukraine’s allies, fused with its own relentless technical innovation, have forged bonds that could define Europe’s emerging security infrastructure.\n\nDaring political decisions by Ukraine and its allies have hastened this integration. Among them: the European Union has adopted the Security Action For Europe ([SAFE](https:\u002F\u002Fdefence-industry-space.ec.europa.eu\u002Feu-defence-industry\u002Fsafe-security-action-europe_en)) mechanism, using its combined fiscal firepower to raise low-cost loans on capital markets to encourage joint military procurement.\n\nSAFE explicitly includes Ukrainian firms in its stringent corporate and sourcing geographical origin requirements, which are designed to stimulate a native European defence industry. This recognises both Ukraine’s ongoing contribution to Europe’s security and the value of the country’s combat-driven technical innovations. From this angle, Ukraine’s defence industry is now even more critical to the EU than the UK, historically the continent’s dominant player.\n\n### Europe is vulnerable – but can’t meet its demand for defence hardware\n\nThe United States’ interest in taking responsibility for European and global security is waning, while Russia continues to probe Europe’s hard and soft defences.\n\nFeeling justifiably vulnerable, European nations have therefore committed to a huge increase in defence spending, which could reach [EUR 2 trillion](https:\u002F\u002Fwww.consilium.europa.eu\u002Fen\u002Fpolicies\u002Fdefence-numbers\u002F) over the next five years.\n\nYet EU defence industry leaders struggle to manufacture defence equipment in sufficient quality and quantity to meet the unprecedented demand and lack the battlefield-tested innovations that are at the core of Ukraine’s industry.\n\n### Ukraine could help meet demand for military equipment\n\nPartly due to the above dynamics, deep public debates are taking place in Ukraine about lifting a _de facto_ ban on the export of military goods in place since the full-scale invasion. The government is establishing [defence production offices in Berlin and Copenhagen](https:\u002F\u002Fkyivindependent.com\u002Fukraine-to-open-defense-production-offices-in-berlin-copenhagen-this-year-zelensky-says\u002F) to facilitate limited export.\n\nThis sounds counterintuitive, considering the devastating shortage of materiel at the front. Yet the truth is: Ukraine’s military is simply unable to afford all the weaponry that its manufacturers can deliver. So, the economic argument for export is strong:\n\n*   Selling excess capacity for a profit could generate significant revenue.\n*   That revenue could be used for economies of scale in production as well as for research and development.\n*   The resulting taxes would allow the state to increase the procurement of materiel for its own troops.\n\nIn a confirmation of the compelling market forces, Ukrainian drone manufacturers have started investments in Europe to set up production outside of Ukraine.\n\nThey certainly have products that would be marketable: their innovation has resulted in weekly software updates and continued hardware improvements. The more traditional howitzers, tanks and armoured personnel carriers are cost competitive and highly scalable. Battlefield command and control software is reported to be top notch.\n\n### What could derail Ukraine’s integration in EU defence markets\n\nOn the surface, the pieces of the puzzle of European defence are aligning neatly. But one major obstacle needs to be cleared for a healthy and thriving trade: Ukrainian defence manufacturers must meet EU standards on anti-corruption compliance and related environmental, social and governance (ESG) matters.\n\nThese include issues such as sustainable sourcing of aviation fuel, employee protections and human rights across the supply chain, as well as good governance of these topics. They also include regulations and standards on integrity and anti-corruption.\n\nThe defence sector globally is struggling to meet many of these requirements. And Ukraine’s fast-growing innovators have understandably not prioritised such matters over the wartime need to deliver at speed.\n\nWithout a rapid move to address this shortfall, Ukraine’s innovators could be shut out from European markets. The EU defence industry – and its citizens – would in turn be deprived of crucial expertise, leaving all allies weaker and poorer. Temptations would mount to soften standards, as is already the case with [fiscal probity requirements](https:\u002F\u002Fwww.consilium.europa.eu\u002Fen\u002Fpress\u002Fpress-releases\u002F2025\u002F10\u002F10\u002Feconomic-governance-council-approves-germany-s-fiscal-expenditure-path-and-its-flexibility-to-increase-defence-spending\u002F) when it pertains to military spending.\n\nThat would be a mistake for both Ukraine and its European allies. Instead, overcoming these challenges could be a boost for both the EU and the Ukrainian defence industry and further cement their partnership.\n\n### Robust internal controls bring many benefits\n\nThe measures required to attain EU standards on anti-corruption compliance and related ESG topics are no doubt arduous. Solid internal control systems, which can produce verifiable data, will need to be established.\n\nBut that brings solid benefits. Information from internal control systems will help to convince customers that the products they are literally entrusting their lives to are reliable, safe and effective. It will provide the basis for ESG reporting in future.\n\nAnd while the effectiveness of Ukraine’s defence systems is convincingly demonstrated through frontline usage, as its defence industry matures, it could greatly benefit from the efficiencies that robust internal control systems bring. \n\n### Challenges meeting EU regulations\n\nEuropean defence firms are eager to work with Ukrainian partners, yet are finding it difficult to meet their own regulatory obligations at the same time. We see several reasons for this:\n\n*   Sourcing of components is swift, creative and results driven. Without control systems, companies might struggle to verifiably certify their ability to meet the SAFE requirement that 65 percent of the weapon’s value must originate from EU\u002FEEA\u002FEFTA member states or Ukraine.\n*   Corporate ownership structures in Ukraine can be challenging for due diligence – particularly when it comes to establishing ultimate beneficial owners of companies.\n*   There is a lack of consensus on what good anti-corruption and ethics policy implementation looks like. This leaves Ukrainian partners unsure of the priorities, direction and speed of any required internal reforms.\n*   Track and trace measures are insufficiently robust. This makes it hard to reliably avoid sanctions violations in the procurement of components and to ensure environmentally sustainable sourcing of raw materials.\n*   Wartime lack of physical access to sites makes traditional verification mechanisms impossible.\n\nThese obstacles are formidable and have the potential to threaten otherwise promising partnerships.\n\n### There is a joint path forward\n\nThankfully, we see a strong desire on both sides to navigate a path through these obstacles.\n\n*   Reforms are progressing fast. Ukrainian Defence Industry, the holding company for the majority of state-owned defence manufacturers, has made impressive strides in adopting reforms at the top level. It is gradually cascading these down to the 50+ companies under its purview, including the producers of such notable products as the _Lyutii_ drone, the _Neptune_ subsonic cruise missile_,_ the _Bohdana_ howitzer and the _Stugna_\u002F_Skif_ anti-tank missile. While a long road remains to reform these highly traditional producers, the political will and technical capacity at the top are formidable.\n*   Anti-corruption policies are being implemented. The more established private manufacturers are increasingly adopting and publicising ethics and anti-corruption policies. They are also implementing and developing channels for reporting violations of integrity standards, and organising contractual activities based on ethical and compliance requirements.\n*   Engagement is strengthening. European manufacturers, who act as both suppliers and potential customers, are keen to engage more closely with their existing or potential Ukrainian partners to smooth the compliance obstacles as their relationships develop. These manufacturers are also keen to bolster their own contextual understanding of the operating environment in Ukraine, allowing them to manage the reputational and legal risks more professionally.\n*   Corruption is being investigated and prosecuted. Ukraine’s National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO) are making significant headway in pursuing officials and company representatives who are willing to use criminal behaviour, including corruption, to personally benefit from wartime deprivations.\n*   Risk prevention measures are underway. The National Agency on Corruption Prevention (NACP) is leading the process of conducting a comprehensive risk assessment in the defence sector.\n*   International support is there. Increasingly, Ukrainian and international policy and advisory supporters are engaging in the sector. This includes the International Forum on Business Ethical Conduct for the Aerospace and Defence Industry ([IFBEC](http:\u002F\u002Fifbec.info\u002F)), NATO’s [Building Integrity](https:\u002F\u002Fwww.nato.int\u002Fcps\u002Fen\u002Fnatohq\u002Ftopics_68368.htm) programme and Norway’s Centre for Integrity in the Defence Sector ([CIDS](https:\u002F\u002Fwww.regjeringen.no\u002Fen\u002Ftopics\u002Fdefence\u002Fcentre-for-integrity-in-the-defence-sector-cids\u002Fid3114785\u002F)). The Basel Institute on Governance has recently commenced efforts in this space through funding from Norway.\n\nTogether, these efforts have the potential to make significant progress in overcoming obstacles.\n\n### How to accelerate progress\n\nWhile progress is happening, it is still insufficient given the urgency of the security situation in Europe. That is why we propose the following five catalysts:\n\n*   Set clear compliance requirements. EU member states at the forefront of defence procurement should spell out their internal control and anti-corruption requirements in plain and detailed terms. This would enable Ukrainian firms to participate in projects, either in collaboration with EU partners or independently. Providing early support and education would help potential Ukrainian partners meet these standards quicker.\n*   Improve implementation and verification systems. Industry associations should strengthen their anti-corruption standards and\u002For guidance by creating clear systems for implementation, verification and measurement.\n*   Allow time to comply. Companies should share their subcontracting compliance requirements with prospective partners well ahead of procurement deadlines, and work with them to build the systems needed to meet these standards.\n*   Share risk insights. Independent corruption risk assessment findings in the defence manufacturing sector, in both Europe and Ukraine, should be shared widely within the professional community.\n*   Collective integrity standards. Private manufacturers in Ukraine should create joint anti-corruption standards, ideally through a [Collective Action](https:\u002F\u002Fcollective-action.com\u002F) approach – i.e. involving all relevant stakeholders working together in a trust-based environment over a sustained period of time. This would help stop individual companies using corrupt practices while others play fair, and reduce compliance costs for individual companies.\n\nAt the Basel Institute we are proud to continue and expand our work in this space with the generous support of Norway. We welcome partners to join these efforts and help ensure Ukraine’s defence innovation becomes a permanent pillar of Europe’s security.","2025-11-06","ukraines-place-in-europes-defence-industry-could-compliance-catalyse-integration-2868","Ukraine’s place in Europe’s defence industry: could compliance catalyse integration?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fc5b007eb-82d5-4cda-a6e1-773cfa16ad5d?width=1000&height=650&format=webp&quality=80",[49],7800,[14],[17,52],"Partnerships",[54,58,62],{"tags_id":55},{"id":56,"name":57},1376,"Defence and security",{"tags_id":59},{"id":60,"name":61},982,"Anti-corruption",{"tags_id":63},{"id":64,"name":65},1303,"Environment",2868,[68],"Ukraine",[17,52],[71],1357,[],[],"03bebfd8-0b40-4a2a-820d-b9d9c13b9de6","2025-11-06T17:01:42.000Z","b0662e2a-864d-4888-a1b7-4342b7570b30","2026-05-23T09:18:31.000Z",[],"\u002Fresources\u002Fnews\u002Fukraines-place-in-europes-defence-industry-could-compliance-catalyse-integration-2868",{"id":81,"body":82,"status":6,"type":83,"date":84,"slug":85,"title":86,"image":87,"countries":88,"topic":91,"activity":94,"tags":95,"nid":96,"topics":97,"activities":98,"authors":99,"images":100,"websites":21,"area":21,"programme":21,"language":22,"translations":101,"translation_of":21,"user_created":74,"date_created":102,"user_updated":103,"date_updated":104,"content":105,"link":106},10574,"We are delighted to announce a new grant that will enable the Basel Institute on Governance to continue and expand its support to Ukraine on integrity and accountability.\n\nThrough the Government of Norway's [Nansen Support Programme for Ukraine](https:\u002F\u002Fwww.norad.no\u002Fen\u002Fthematic-areas\u002Fhumanitarian-assistance-and-comprehensive-response-and-the-nansen-programme-for-ukraine\u002Fthe-nansen-support-programme-for-ukraine\u002Fthe-nansen-support-programme-for-ukraine\u002Fhow-norad-fights-corruption-in-ukraine\u002F), the Basel Institute will work from 2025 to 2028 to promote transparency and accountability in three strategically vital sectors:\n\n*   Natural resources: Tackling corruption risks in forestry and the critical minerals sector, building on our long-standing work to combat [corruption in Ukraine’s forestry industry](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fdeepdive1-ukraine) and the expertise of our wider [Green Corruption programme](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption).\n*   Energy: Supporting transparency and accountability in energy-related enterprises. In the first year, this will begin with our collaboration with the Gas Transmission System Operator of Ukraine (Gas TSO), a vital state-owned enterprise with which we recently [signed a Memorandum of Understanding](https:\u002F\u002Fwww.facebook.com\u002Fgas.tso.ua\u002Fphotos\u002F%D0%BE%D0%BF%D0%B5%D1%80%D0%B0%D1%82%D0%BE%D1%80-%D0%B3%D1%82%D1%81-%D1%83%D0%BA%D1%80%D0%B0%D1%97%D0%BD%D0%B8-%D1%80%D0%BE%D0%B7%D0%BF%D0%BE%D1%87%D0%B0%D0%B2-%D1%81%D0%BF%D1%96%D0%B2%D0%BF%D1%80%D0%B0%D1%86%D1%8E-%D0%B7-%D0%B1%D0%B0%D0%B7%D0%B5%D0%BB%D1%8C%D1%81%D1%8C%D0%BA%D0%B8%D0%BC-%D1%96%D0%BD%D1%81%D1%82%D0%B8%D1%82%D1%83%D1%82%D0%BE%D0%BC-%D1%83%D0%BF%D1%80%D0%B0%D0%B2%D0%BB%D1%96%D0%BD%D0%BD%D1%8F-%D0%BE%D0%BF%D0%B5%D1%80\u002F1414177947376981\u002F) to establish a comprehensive anti-corruption compliance system.\n*   Defence industries: Strengthening compliance and integrity systems in defence manufacturers as they produce vital materiel for Ukraine’s defence and integrate with Europe’s broader security architecture. This builds on our ongoing partnership with [Ukraine Defense Industries](https:\u002F\u002Fukroboronprom.com.ua\u002Fen\u002Fupravlinnya-ta-komplajens\u002Fat-uop-i-bazelskii-institut-upravlinnya-proveli-persu-zustric-v-ramkax-spivpraci-shhodo-posilennya-vnutrisnix-komplajens-spromoznosteiopk) (UkrOboronProm or UOP).\n\n### Strengthening integrity where it matters most\n\nThis programme is significant because natural resources, energy and defence are at the heart of Ukraine’s resilience and recovery. They are essential for the country’s security, economic stability and EU integration – yet also among the most vulnerable to corruption.\n\nWeak governance in these sectors risks undermining resilience, slowing reconstruction and eroding donor confidence.\n\nThe Government of Norway [recognises](https:\u002F\u002Fwww.norad.no\u002Fen\u002Fthematic-areas\u002Fhumanitarian-assistance-and-comprehensive-response-and-the-nansen-programme-for-ukraine\u002Fthe-nansen-support-programme-for-ukraine\u002Fthe-nansen-support-programme-for-ukraine\u002Fhow-norad-fights-corruption-in-ukraine\u002F) that “combating corruption and building strong institutions are central” to achieving the goals of its comprehensive Nansen Support Programme, which aims to “help secure a safe, free and independent Ukraine, strengthen vital state functions and reduce human suffering”. Like the Basel Institute, our partners in Norway acknowledge Ukraine’s progress in tackling corruption and the strong commitment of Ukrainian civil society and the public to building robust anti-corruption institutions.\n\n### Sustaining Ukraine’s path to resilience\n\nJorun Nossum, Director of Norad’s Department for the Nansen Support Programme, said:\n\n> We are very pleased to be able to continue our partnership with Basel Institute on Governance in working to prevent corruption in sectors central to Ukraine’s resistance and reforms.\n\nJuhani Grossmann, who leads the Basel Institute’s work in Ukraine and the opening of our new office in Kyiv, commented:\n\n> The support of Norway allows us to boost our integrity-building partnerships in Ukraine for the long term at a time when reliability is especially crucial. The three priority areas have been carefully selected to reflect both Ukraine's immediate needs and the desire for a sustainable recovery.\n> \n> Our natural resource partnerships will seek to ensure Ukraine’s people derive the maximum benefit from its environment and natural resources. Our energy partnerships will help build trustworthy energy partners as Ukraine integrates into European energy markets. Our defence partnerships are designed to enable Ukraine’s manufacturers to reap the full benefits for Ukraine’s security from their technical prowess.\n> \n> Enhanced and more compliant corporate structures will unlock Ukraine’s full potential to contribute to Europe’s emerging security infrastructure.\n\n### A decade of partnership with Ukraine\n\nAs featured in the [Basel Institute’s Annual Report 2024](https:\u002F\u002Fbaselgovernance.org\u002Far2024), we have been engaged in Ukraine for over a decade, supporting both corruption prevention and enforcement.\n\nOn the prevention side, our work since 2013 has included Collective Action and compliance initiatives in government permitting and corporate governance. We have also advised on the establishment of the Business Ombudsman, provided guidance to the Ukrainian Road Authority and supported independent commissions tasked with recruiting leaders of Ukraine’s anti-corruption institutions.\n\nFollowing the full-scale invasion in 2022, we significantly expanded our anti-corruption support, recognising it as both a contribution to Ukraine’s long-term European integration and to its short-term wartime resilience.\n\nWith significant funding from Switzerland and contributions from the European Bank for Reconstruction and Development and NEFCO, we have helped Ukrainian authorities and state-owned enterprises ensure the integrity of the wartime economy and reconstruction efforts. Priority areas have included restoration, transport and natural resources.","News","2025-10-20","strengthening-integrity-in-ukraines-natural-resources-energy-and-defence-sectors-with-norways-support-2857","Strengthening integrity in Ukraine’s natural resources, energy and defence sectors with Norway’s support","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fc22c8770-c1ad-4fd3-8af1-7174cdbe6b0b?width=1000&height=650&format=webp&quality=80",[89,90],7797,7798,[92,93],"Green Corruption","Private Sector",[52],[],2857,[92,93],[52],[],[],[],"2025-10-20T16:01:43.000Z","dfef11db-1bc6-47e9-a61d-93443995484b","2026-05-08T21:11:16.000Z",[],"\u002Fresources\u002Fnews\u002Fstrengthening-integrity-in-ukraines-natural-resources-energy-and-defence-sectors-with-norways-support-2857",{"id":108,"body":109,"status":6,"type":10,"date":110,"slug":111,"title":112,"image":113,"countries":114,"topic":116,"activity":117,"tags":118,"nid":119,"topics":120,"activities":121,"authors":122,"images":124,"websites":21,"area":21,"programme":21,"language":22,"translations":125,"translation_of":21,"user_created":74,"date_created":126,"user_updated":74,"date_updated":126,"content":127,"link":128},10618,"_Europe’s defence sector is changing fast. More money, political attention and international partnerships are flowing into the industry. At the same time, defence companies face growing pressure to show not just what they produce, but how they operate._ \n\n_In this blog, Yuliia Brusko explores why transparency and operational credibility are becoming more important – especially for Ukraine’s wartime-built defence industry. The article builds on the Basel Institute’s ongoing work in Ukraine, including with defence-sector stakeholders on governance, integrity and operational resilience under wartime conditions._ \n\n### Defence companies are entering a new era of scrutiny\n\nEuropean defence companies are attracting unprecedented levels of capital, political attention and strategic relevance. Yet alongside this growth comes a level of external scrutiny many firms were never built for.\n\nA recent public dispute involving Czech defence company Czechoslovak Group (CSG) illustrates this shift. A [report](https:\u002F\u002Fhntrbrk.com\u002Fcsg\u002F) published by Hunterbrook Media questioned aspects of CSG’s production claims, business model and corporate structure. Among other issues, the report raised questions about the transparency of certain ownership and subsidiary structures, the company’s reliance on intermediary and external procurement arrangements, and the extent to which publicly communicated production and business claims could be independently substantiated by external actors. \n\nWhile the company strongly [rejected](https:\u002F\u002Fcsg.com\u002Fen\u002Fnews\u002Fcsg-sets-the-record-straight-in-response-to-short-seller-allegations) the allegations, the case reveals a broader structural change: the increasing demand for operational verifiability.\n\nIn the booming defence industry, investors, procurement actors and international partners are no longer relying on growth narratives or high-level political positioning. Increasingly, they are trying to independently verify how companies actually operate, including: \n\n*   Where key dependencies sit\n*   How production is organised\n*   Whether public claims align with realities\n\nThis shift is partly driven by the changing structure of the defence market itself. Alongside traditional defence primes, the sector now includes rapidly scaling private manufacturers, drone producers and venture-backed technology firms. \n\nMany are entering international financing and export ecosystems that expect a level of operational accountability historically uncommon in parts of the defence sector.\n\n### Bridging wartime pragmatism and market expectations in Ukraine\n\nThis demand for clarity creates a unique challenge for Ukraine’s defence industry. Developed under wartime conditions, Ukrainian companies have prioritised speed, adaptability and survivability over externally defensible corporate structures. \n\nDistributed manufacturing, fragmented supply chains and parallel operational entities are practical wartime adaptations, not signs of weak governance.\n\nHowever, as the sector seeks deeper integration with European partners, these same features can create friction. Documentation and traceability systems built under the urgency of survival often struggle to meet the requirements of international financing and export ecosystems.\n\nThe problem is not necessarily the complexity or the inherent opacity of these arrangements; it is the inability to credibly explain and defend them to external stakeholders who can no longer rely on informal trust alone.\n\n### Operational credibility is becoming a strategic requirement\n\nAs scrutiny becomes more operational, companies are increasingly assessed not only on what they produce, but on whether their operational realities can withstand external examination. When structures are too opaque to confidently assess, perceived risk can outweigh strategic value.\n\nThis creates pressure not only for Ukrainian manufacturers, but also for European defence companies navigating a rapidly changing market. For those seeking long-term integration into international financing, procurement and partnership ecosystems, the ability to defend operational realities is becoming a core business capability.\n\n### A shift from trust-based networks to verifiable systems\n\nThe transition from relatively closed government and industry networks toward a more financialised and internationally interconnected market is reshaping how defence companies are assessed. Shifting to this next step is crucial as deftech companies move from niche producers to systemically important security providers. As their technology increasingly moves independently from the large defense primes, the obvious question arises of “going it alone.” While technologically, the choice is obvious, providing sufficient assurance for direct competitive government procurements will require solid systems. \n\nThe challenge is not eliminating operational complexity or wartime opacity. In many cases, these are unavoidable features of how modern defence industries function under pressure. The challenge is whether companies can credibly explain and defend those realities once they enter ecosystems built around external review, institutional accountability and sophisticated due diligence.\n\nFor many defence companies, this will require the ability to clearly explain aspects like: \n\n*   How production is organised\n*   How supplier and partnership structures operate in practice\n*   How key decisions are documented under wartime conditions\n*   How public production claims can be substantiated when questioned by investors, procurement actors or international partners. \n\nThis is likely to require more structured approaches to documentation, traceability and internal oversight – not to replicate peacetime bureaucracy, but to ensure that wartime realities can be credibly defended when scrutiny arises.\n\n### Adaptability alone will no longer be enough\n\nIn this environment, the ability to combine wartime adaptability with institutional credibility may increasingly determine which companies are able to scale, attract financing and secure long-term positions within international markets.\n\nThis increases the importance of building credible systems for transparency, documentation, internal oversight and operational accountability in individual companies and across the defence ecosystem. \n\nAchieving this is no easy task. It will require sustained cooperation between Ukrainian defence companies, international partners, investors, procurement actors and policymakers – indeed, any actor keen to see Ukraine’s phenomenal defence capabilities more deeply integrated into international markets and partnerships. \n\nAt the Basel Institute, we are increasingly working directly with Ukrainian defence companies and their associations to strengthen compliance on an individual or collective basis and welcome new partners. \n\n_The Basel Institute's work on Ukraine's defence integrity is supported by Norway. This blog represents the views of the author only._","2026-05-13","operational-credibility-is-a-strategic-asset-in-the-defence-industry-what-does-that-mean-for-ukraine-and-its-partners-2965","Operational credibility is a strategic asset in the defence industry. What does that mean for Ukraine and its partners?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F6e5fbb34-c87f-4281-94cb-55f2cd75b3a0?width=1000&height=650&format=webp&quality=80",[115],7816,[14],[17],[],2965,[],[17],[123],1374,[],[],"2026-06-04T21:13:47.000Z",[],"\u002Fresources\u002Fnews\u002Foperational-credibility-is-a-strategic-asset-in-the-defence-industry-what-does-that-mean-for-ukraine-and-its-partners-2965",{"id":130,"body":131,"status":6,"type":10,"date":132,"slug":133,"title":134,"image":135,"countries":136,"topic":137,"activity":141,"tags":143,"nid":144,"topics":145,"activities":148,"authors":149,"images":150,"websites":151,"area":21,"programme":21,"language":21,"translations":153,"translation_of":21,"user_created":74,"date_created":154,"user_updated":155,"date_updated":156,"content":157,"link":158},10417,"How can corruption affect peace and security? Where does corruption influence or intersect with geopolitics? And how can peace-building and anti-corruption serve a common goal?\n\nA two-hour workshop at [Basel Peace Forum 2024](https:\u002F\u002Fbasel-peace.org\u002Fbpf-2024\u002F), organised by [Swisspeace](https:\u002F\u002Fwww.swisspeace.ch\u002F), delved into these questions and more. Moderated by Gretta Fenner, Managing Director at the Basel Institute on Governance, the panel looked at some of the most critical intersections of corruption, security, peace and geopolitics.\n\nOur thanks to the engaged audience and fantastic panel of speakers from [Transparency International’s Defence and Security programme](https:\u002F\u002Fti-defence.org\u002F), [NAKO – the Independent Defence Anti-Corruption Commission of Ukraine](https:\u002F\u002Fnako.org.ua\u002Fen), the [Centre for the Study of Democracy](https:\u002F\u002Fcsd.bg\u002F) in Bulgaria and our own Prevention, Research and Innovation team.\n\nThe main takeaway? The urgency of more collaboration and knowledge exchange between the anti-corruption, peace building and defence and security fields. As Gretta Fenner said in her closing remarks:\n\n> It’s time to fight for peace through anti-corruption and to fight corruption through peace building.\n\n### Corruption: about power and influence\n\nWhen we look at corruption in the context of peace, stability and geopolitics, we must first understand that when we say “corruption”, we mean more than “just” the bribery often associated with the word corruption. Instead, the notion of corruption encompasses behaviours like patronage, nepotism, embezzlement, influence peddling or the manipulation of legislative processes with a corrupt objective.\n\nAny of these corrupt practices can serve a one-off purpose. But they are more often than not employed as part of a long-term game, for example to gain or preserve power or geopolitical influence. This is when we can refer to it as “strategic corruption”.\n\nThat understanding of corruption as a functional instrument of power and influence helps us to see why corruption is so relevant to peace and security. As Claudia Baez Camargo, Head of Prevention, Research and Innovation, Basel Institute on Governance, said:\n\n> Corruption has a direct effect on the manner in which state power is exercised. As such, it affects security outcomes… Strategic corruption relies on building strategic transboundary networks where financial and political interests are intermixed. Those networks that can be activated and instrumentally used to destabilise and to threaten and to cause harm to other states.\n\nSee more about understanding corruption and security through the lens of power and functionality in this [blog](http:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fhow-strategic-corruption-fuels-insecurity-affecting-power) by Claudia and her colleague Saba Kassa.\n\n### Strategic corruption affects Europe\n\nRussia provides a standout example of the strategic use of corruption to achieve geopolitical goals, said panellists. Martin Vladimirov of the Centre for the Study of Democracy and co-author of the [_The Kremlin Playbook_](https:\u002F\u002Fwww.csis.org\u002Fprograms\u002Feurope-russia-and-eurasia-program\u002Fprojects\u002Frussia-and-eurasia\u002Fkremlin-playbook) explained how Putin’s regime achieves political influence in Europe by activating a network of oligarchs with commercial interests on both sides of the border:\n\n> The Kremlin is able to weaponise the oligarchic networks that have been established between Russian companies and European counterparts in order to achieve an outsized political influence.\n\nEurope needs to wake up to that quickly, warned Olena Tregub, Secretary General of NAKO, the Independent Defence Anti-Corruption Commission of Ukraine:\n\n> In order to dominate countries, Russia uses corruption as a foreign policy tool. It is penetrating into the energy landscape, the media landscape, into education, culture and the financial sector. It’s important to find those corrupt influences in Europe, expose them and stop them from happening. They are making Europe weaker and more vulnerable.\n\n### Treating corruption as a security issue\n\nAttention to the nexus between corruption, peace, defence and security grew after the U.S. [established corruption](https:\u002F\u002Fwww.whitehouse.gov\u002Fbriefing-room\u002Fpresidential-actions\u002F2021\u002F06\u002F03\u002Fmemorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest\u002F) as a “core issue of national security” in 2021.\n\nElevating corruption to the level of security means that governments need to look at corruption across the state apparatus. The implication is that anti-corruption should form a central part of both domestic security and foreign policy. In other words, corruption can no longer be treated as a side issue.\n\nAra Marcen Naval, Head of Advocacy Defence and Security at Transparency International, argued:\n\n> Designating corruption as a national security issue means that corruption cannot take a back seat to other security priorities. It means that it has to be a priority for foreign policy… It means that we need to build governance closer to security.\n\nIn some cases, she said, this may mean bringing oversight and accountability mechanisms to the defence sector and arms trade, both of which have traditionally been rather closed and secretive. Tools like freedom of information, beneficial ownership transparency and whistleblower protection could play a greater role in ensuring a country’s defence sector is resilient to corruption and stronger as a result.\n\nAt the very least, panellists mentioned the need to take corruption risks into account in strategic defence planning and when negotiating peace deals or working in conflict-afflicted areas.\n\n### Bringing anti-corruption, peace and security together\n\nCorruption may be a useful tool for unscrupulous elites to gain power, money and influence at home and abroad – but _anti-corruption_ reforms and tools can also help strengthen security.\n\nOlena Tregub emphasised that\n\n> anti-corruption reforms since 2014 were crucial in creating a stronger Ukrainian state, a resilient state which would be able to survive Russian invasion.\n\nSo too, she said, was Ukraine’s strong and engaged civil society – a hallmark of a state that takes fighting corruption seriously.\n\nAnd of course, the links go deeper than military defence. Corruption and poor governance undermine peace and security by fuelling organised crime and terrorism, increasing inequality and radicalisation, and undermining trust in institutions.\n\nWhere to start? The first step is to encourage more collaboration and knowledge exchange between the anti-corruption, peace building and defence and security fields. We have a lot to learn from each other.\n\n### Learn more\n\n*   Gretta Fenner will moderate a panel discussion on corruption and security at the [Munich Security Conference 2024](https:\u002F\u002Fsecurityconference.org\u002Fen\u002Fmsc-2024\u002F) from 16–18 February 2024.\n*   Related blog: [How (strategic) corruption fuels insecurity by affecting power](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fhow-strategic-corruption-fuels-insecurity-affecting-power).\n*   Learn more about the [Basel Peace Forum](https:\u002F\u002Fbasel-peace.org\u002Fbpf-2024\u002F).","2024-02-13","fighting-corruption-to-promote-peace-and-security-basel-peace-forum-2024-2583","Fighting corruption to promote peace and security: Basel Peace Forum 2024","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F30911b00-fd61-462b-8ee2-89fcfa023e2d?width=1000&height=650&format=webp&quality=80",[],[138,139,140],"Asset Recovery","Prevention"," Research and Innovation",[142,17],"Events",[],2583,[146,147],"Asset Recovery and Enforcement","Prevention Research and Innovation",[142,17],[],[],[152],"Main page",[],"2024-02-13T11:01:29.000Z","3d9ff205-1640-4f34-b5b6-86977f51bbd6","2026-05-29T22:22:28.000Z",[],"\u002Fresources\u002Fnews\u002Ffighting-corruption-to-promote-peace-and-security-basel-peace-forum-2024-2583",{"id":160,"body":161,"status":6,"type":10,"date":162,"slug":163,"title":164,"image":165,"countries":166,"topic":170,"activity":171,"tags":174,"nid":179,"topics":180,"activities":181,"authors":182,"images":184,"websites":185,"area":21,"programme":21,"language":21,"translations":186,"translation_of":21,"user_created":74,"date_created":187,"user_updated":155,"date_updated":188,"content":189,"link":190},9776,"_Opening remarks and a presentation of key concepts by Oscar Solórzano at the side event “Living up to the spirit of articles 43 and 46 UNCAC” during the eighth session of the Conference of the States Parties to the United Nations Convention against Corruption, Abu Dhabi, 16-20 December 2019._\n\nLadies and gentlemen, let me please welcome you to the side event “Living up to the spirit of articles 43 and 46 UNCAC”.\n\nThe title suggests that the purpose of this session is to achieve the goals of the Convention, and specifically articles 43 on international cooperation and 46 on mutual legal assistance (MLA). To achieve the goals of the Convention, it is of course important that States Parties initiate legislative revisions where domestic legislation is not up to standard.\n\nWe would like to talk about something else, however: using domestic legislation to its full extent, approaching legal challenges presented by asset recovery cases with a mindset of \"Yes we can!\"\n\nWhere possible, law enforcement authorities should do whatever is permitted by their domestic law and practice. This means applying underlying concepts in a constructive manner and - in many settings - changing the way foreign MLA requests are received and executed.   \n\nIn the asset recovery field, for instance, consider the practices of authorities charged with the execution of foreign requests related to non-conviction-based confiscation (NCBC) actions. Of course, confiscation laws may differ between the two countries. But differences in legal systems alone are not grounds to refuse MLA. Why? Because the UNCAC policymakers envisioned this situation and introduced a favourability principle: States should interpret the provisions of the Convention in a manner that is most favourable to international cooperation in judicial matters. In order to live up to the favourability principle of UNCAC, States do not need new laws, but rather to explore solutions in the existing legal framework.\n\nFavourability does not mean \"anything goes\". But countries can learn from their peers, and that is what we are hoping to promote this morning. Certain European countries have acquired expertise in enforcing foreign NCBC requests, while acknowledging differences in domestic laws. To prove this, the panel of experts will showcase recent international asset recovery cases between Switzerland and Peru based on NCBC laws.\n\n*   I will start by providing the conceptual perspective of the cases from my experience as Senior Asset Recovery Specialist at the Basel Institute’s International Centre for Asset Recovery.\n*   I will then invite Hamilton Castro, a Peruvian specialised NCBC prosecutor with whom I have worked closely on several important asset recovery cases, to explain through a case presentation why in some scenarios NCBC is the only viable option to recover illicit assets.\n*   Barbara Kammermann, Legal Officer, Division for Mutual Legal Assistance at the Swiss Federal Office of Justice, will then explain what the challenges in that case were and what legal avenues Switzerland used to enforce the Peruvian NCBC request.\n*   Finally, two distinguished practitioners, Markus Busch, Head of Division at the Federal Ministry of Justice and Consumer Protection in Germany and Muthoni Kimani, Director of the Asset Recovery Office in Kenya, will react and present their thoughts on \"favourable\" approaches to NCBC.\n\nEnforcing non-conviction-based confiscation in Europe: can UNCAC provide the plug adapter?\n------------------------------------------------------------------------------------------\n\nIn cases of mutual legal assistance (MLA) in criminal matters, law enforcement authorities are often confronted with a variety of legal provisions potentially applicable to a case. A norm of a bilateral MLA treaty and a norm in domestic MLA law may address the same issue. Choosing the solution that is more favourable to the assistance required is the reasoning behind the “favourability principle”.\n\nA coherent interpretation of such fundamental principle means that a refusal of MLA should be a measure of last resort.\n\nIn the UNCAC, favourability is deliberately formulated very broadly so as to enable States Parties to provide MLA to “the widest measure”. One such application of the favourability principle is the granting of MLA when a requesting State seeks to recover illicit assets from a requested State through non-conviction-based confiscation (NCBC).\n\n### Objectives of the panel\n\n*   Advocate for an interpretation of favourability that promotes NCBC as a valid basis to recover ill-gotten assets.\n*   Encourage the introduction of the obligation to “sufficiently explain” the decision of the requested State to refuse MLA on the grounds that NCBC is incompatible with its legal framework.\n*   Pledge for a policy dialogue aiming at revising such a rule or practice so as to meet UNCAC’s standard.\n\nThis presentation is divided in three parts:\n\n*   I will take a “back to the roots” approach to confiscation.\n*   I would then like to introduce a discussion of the “supposed affected rights” in NCBC procedures.\n*   Finally, I would like to convey the lessons learned from international asset recovery efforts involving Peru and Switzerland.\n\n### What is confiscation?\n\nDuring the Middle Ages, confiscation was a widely unpopular measure with the general public as it was often applied for malicious purposes. It was only in the context of the trade in illegal drugs that a wider concept of confiscation was reintroduced: in most countries, confiscation is now considered a reparative measure that only seeks to target illicit wealth. Additional punitive effects and deterrence are not commonplace among the vast majority of States Parties.\n\nAccording to UNCAC, confiscation is the permanent deprivation of assets by a competent authority. Simply put, proceeds of crime must be taken away in order to ensure that \"crime does not pay\".\n\nThe reparative nature of confiscation has important consequences for its procedural treatment in many countries. In common law jurisdictions, as well as a rising number of European and Latin American countries, confiscation is treated as a “civil” measure closer to the “unjust enrichment” of civil law than to a sanction imposed by a criminal court. A direct consequence of this interpretation is that safeguards of criminal procedure, such as the presumption of innocence, do not apply as as confiscation is not considered an accusation in criminal matters. For that reason, it can be ordered in just but simplified procedures.\n\nIn its contemporary interpretation, confiscation is not to be considered a pecuniary sanction. It is certainly neither a civil reparation nor a fine. A civil reparation is based on the concept of harm while a fine is an ordinary criminal sanction.\n\nConfiscation, on the other hand, has its basis in the provenance of the funds derived from the crime. It is said that confiscation in its basic form targets the assets that are the “proceeds” of crime.\n\nAs said, most countries in continental Europe share the reparative conception of confiscation. The constant jurisprudence of the European Court of Human Rights (ECHR) assessing the scope of individual European States relating to NCBC is very clear in this regard.\n\n### Extinción de dominio\n\nThe Peruvian NCBC law, _extinción de dominio_ law (roughly translated as the extinction of possession) follows the same reasoning as the one exposed in the ECHR caselaw. It is directed against the asset and has a reparative nature. Its essential aim is to take assets linked to crimes out of circulation in a special proceeding directed against objects. In any event, it is not intended to punish the perpetrator of the crimes.\n\nThe main problem with this point of view is that a pure _in rem_ action - directed against objects - is an alien concept to European civil law countries. This concept, imported from the US legal arsenal, enables the use of a completely different procedure governed by civil standards but granting, however, effective procedural rights to the asset holder in a two-fold judicial process. This is particularly important because one of the main arguments to refuse MLA in NCBC is that it affects fundamental rights.\n\nBut what human rights are we talking about? What rights are violated in NCBC? I think it is a valid question that needs special consideration.\n\n### Fundamental rights in play\n\nThe Peruvian extinción de dominio law grants due process and fundamental rights without restriction. They are in fact fundamental principles of this piece of legislation. The asset holder is granted a large number of procedural rights, including:\n\n*   the right to a fair hearing;\n*   the right to inspect the casefile;\n*   the right to provide evidence;\n*   the right to appeal and to a judicial review;\n*   constitutional courts and international human rights tribunals complete the review possibilities of this action.\n\nThe discussion in Europe and Latin America basically revolves around two fundamental rights: the right to property and the protection of procedural guaranties.\n\n#### Property rights\n\nLatin American States have brought innovative understanding to overcome the difficulties linked to the protection of the right to property: property must have a licit origin to deserve the protection of the State and it must be exercised according to social and public interest as imposed by constitution. The first limitation to property arises therefore from the Constitution itself.\n\nLikewise, property rights are not “absolute” in the sense that they can suffer limitations when confronted with other similar or superior interests. This is the case for instance when the State develops more incisive confiscation rules to protect collective interests, which may have an impact in property rights.\n\n#### Procedural rights\n\nA persistent argument is that NCBC procedures do not grant, in general, the same procedural rights as criminal confiscation. For some, NCBC tools circumvent the defences of the criminal proceedings and therefore limit the fundamental rights of the defence.\n\nIn most cases, indeed, the procedural guaranties are modulated according to the nature of the action: reparative and _in rem_. As NCBC targets assets, it does not include a general presumption that the assets under investigation are licit, as it is the case in proceedings against persons.\n\nIn my view this makes perfectly senses as the asset holder’s freedom is not in play, luckily the ECHR and the majority of constitutional courts follow this idea.\n\n_In_ _dubio pro reo_ (literally “the doubt benefits the offender”) is another of the rights inappropriate in NCBC procedure. The prosecution still supports the burden of proof but if a doubt persists regarding the origin of the asset, it does not benefit the asset holder.\n\nIn practice, the burden of proof is lowered to the civil standard of balance of probabilities, which means that the judge decides on the confiscation when he or she thinks that it is more probable that the assets arise from a crime than that they don’t.\n\n### What lessons were learned?\n\n#### NCBC procedures are better placed to recover illicit assets\n\nSeveral interconnected asset recovery cases in Peru show that NCBC procedures are necessary and adequate in certain scenarios. In these Peruvian cases, the criminals (the beneficial owners of the Swiss accounts) intentionally absconded from Peru upon the initiation of the criminal investigation. As the Peruvian Constitution prohibits _in absentia_ trials, it would have been impossible to confiscate through criminal proceedings as a criminal prosecution cannot take place.\n\nIn such scenarios, it is unacceptable to let the criminals knowingly avoid the criminal accusation and enjoy the benefits of their crimes, simply because of old-fashioned legislation or narrow concepts pertaining to confiscation. Favourability must be applied in the Requested State order to overcome such a legal loophole.\n\n#### Impact on MLA\n\nThe success of Peru in these cases heavily relied on the active involvement and support of Swiss authorities. For the cooperation to succeed, the nature of the investigatory or judicial proceeding in the victim country is highly relevant for Switzerland’s ability to cooperate.\n\nIt is therefore important to find common grounds of understanding between requesting and requested States and to jointly decide what is feasible and what is not in terms of international MLA.\n\nWe believe, the adapter plug, the common language among States, is that confiscation is not punitive but a remedial measure. When States want to use NCBC to punish the perpetrators of crime, it becomes a “penalty” – whereupon criminal safeguards apply without any restrictions. NCBC laws must therefore be limited to assets arising from crimes.\n\nIn this respect, Swiss authorities determined that the Peruvian NCBC law complies with Swiss human rights and public order standards. The Swiss Federal Tribunal and the Federal Criminal Court have both confirmed that Switzerland can cooperate with foreign NCBC investigations and is also capable of enforcing the resulting decisions. \n\nLikewise, the European Court of Human Rights, applicable in Switzerland, has repeatedly confirmed that: \"\\[C\\]ommon European and even universal legal standards can be said to exist which encourage the confiscation of property linked to serious criminal offences such as corruption, money laundering, drug offences and so on, without the prior existence of a criminal conviction\".\n\n#### Ensuring a sound implementation of the specialized asset recovery framework\n\nAsset recovery laws cannot translate into investigations, seizures, confiscations and asset restitutions in the absence of proper specialization and implementation. The extinción de dominio law foresees the progressive implementation of a specialized prosecution and court apparatus, with a nation-wide deployment of 22 courts and 3 courts of appeal devoted to NCBC, each with designated specialized judges, prosecutors and investigative police. The specialization is particularly important as it gives the justice operator, particularly judges, the necessary comprehension and experience to decide on actions which are conceptually disconnected from the criminal trial.","2019-12-19","the-quotfavourabilityquot-principle-uncac039s-plug-adapter-for-enforcement-of-non-conviction-based-confiscation-requests-1046","The \"favourability\" principle - UNCAC's plug adapter for enforcement of non-conviction-based confiscation requests","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fe89af73d-7273-416f-8fb6-ee2c4d123c66?width=1000&height=650&format=webp&quality=80",[167,168,169],7431,7432,7433,[138],[172,173],"Presentations","International cooperation",[175],{"tags_id":176},{"id":177,"name":178},1379,"Non-conviction based forfeiture",1046,[146],[172,173],[183],1248,[],[152],[],"2022-05-26T22:55:31.000Z","2026-05-29T22:21:54.000Z",[],"\u002Fresources\u002Fnews\u002Fthe-quotfavourabilityquot-principle-uncac039s-plug-adapter-for-enforcement-of-non-conviction-based-confiscation-requests-1046",{"id":192,"body":193,"status":6,"type":10,"date":132,"slug":194,"title":195,"image":196,"countries":197,"topic":198,"activity":199,"tags":200,"nid":207,"topics":208,"activities":209,"authors":210,"images":213,"websites":214,"area":21,"programme":21,"language":21,"translations":215,"translation_of":21,"user_created":74,"date_created":216,"user_updated":155,"date_updated":217,"content":218,"link":219},10418,"How do corruption and security intersect? What is _strategic_ corruption and what can we do about it?\n\nThese were two fundamental questions tackled at the Countering Strategic Corruption workshop at the [2024 Basel Peace Forum](https:\u002F\u002Fbasel-peace.org\u002Fbpf-2024\u002F). Claudia Baez Camargo, Head of Prevention, Research and Innovation at the Basel Institute on Governance, spoke at the event. Together with her colleague Saba Kassa, the team’s Deputy Head, she highlights two key ideas:\n\n*   Using the lens of power helps us to better understand how corruption impacts security_._ Corruption changes power dynamics, which in turn affect security.\n*   We need to see how corruption is a highly functional tool for those seeking not just private benefits but – in the case of strategic corruption – geopolitical goals.\n\n### Power: at the heart of corruption and security issues\n\nCorruption fuels insecurity in many ways, directly and indirectly. But the big picture is that corruption affects the exercise of power by undermining it, or by strengthening it in a particular person or group’s favour.\n\nChanges in power in turn affect all forms of human security, including a country’s ability to defend itself against internal or external threats.\n\nIt is useful to think of three different types of corruption:\n\nCorruption State power Implications Insecurity Endemic corruption Weakens ability to serve citizens.\n\nErodes trust. \n\nIncreases inequalities and poverty.\n\nFuels insecurity.\n\nErodes performance of security institutions.\n\nState capture\n\nRepressive capacities are instrumentalised. State institutions serve elites. \n\nConsolidates power in hands of political elites.\n\nImpunity is the norm.\n\nEnables discretionary and abusive control of security apparatus.\n\nFuels radicalisation of oppressed groups. \n\nStrategic corruption State powers abused and weaponised to achieve a geopolitical goal.\n\nFunds conflict, weapons.\n\nInfluences or destabilises other countries.\n\nContributes to polarisation.\n\nEmboldens populists, authoritarian or violent groups.\n\n### Endemic corruption: weakening institutions and trust\n\nWidespread and systemic corruption affects the ability of the state to serve citizens. Consider the theft of public funds earmarked for hospitals or medicines, which affects citizens' access to good health care. Consequences include higher inequality and poverty, as well as an erosion of trust in government and public institutions. This is where security risks come in. [Popular protests may spur violence](https:\u002F\u002Fcarnegieendowment.org\u002F2018\u002F04\u002F12\u002Ffighting-hydra-lessons-from-worldwide-protests-against-corruption-pub-76036) and conflict as tensions rise.\n\nIn conflict-afflicted and fragile contexts, theft of humanitarian aid or resources dedicated to strengthening legitimate state actors and institutions can undermine the prospects for sustainable peace.\n\nA related problem is the systematic erosion of defence and security institutions. Corrupt procurement deals and embezzlement leave institutions with underpaid and underequipped staff while draining national budgets.\n\nThis makes it very challenging to respond to domestic and external threats, and organised crime and terrorism can get a stronger foot in the door. For example, research in [Nigeria](https:\u002F\u002Fwww.tandfonline.com\u002Fdoi\u002Fabs\u002F10.1080\u002F09592318.2020.1672968) has shown that corruption in the military affects the ability to respond effectively to the militant group Boko Haram. In other words, corruption undermines the most basic responsibility of states: protecting citizens from violence and conflict.\n\n### State capture: centralising power\n\nState capture is a systemic form of corruption in which political elites, often together with economic elites, control state institutions for their narrow purposes. It is more than about siphoning off state resources with impunity. It can be about getting laws, such as procurement rules, just right for those political elites and their associates to win lucrative contracts or control valuable natural resource sectors.\n\nThe unchecked ability to shape laws and direct state intuitions puts a lot of power in the hands of a few people. For example, they can instrumentalise enforcement institutions such as the police or courts to neutralise opponents and ensure impunity for their circle. All this strengthens their power base. And it shows again that corruption can be a highly functional tool.\n\nThe citizens of a country suffering from state capture understand that power is exercised discretionarily and that the rules apply to some and not to others. Fear and powerlessness often close the door to challenging the situation through democratic means.\n\n### Strategic corruption: a powerful geopolitical tool\n\nStrategic corruption goes beyond the kind of narrow personal benefits implied in the common definition of corruption as “the abuse of entrusted power for private gain”. Here, corruption is weaponised to help change power dynamics on the geopolitical stage.\n\nIn this cross-border and global context, states can use corrupt means and divert public resources to fund their geopolitical objectives. For an in-depth case study of strategic corruption, see the _[Kremlin Playbook](https:\u002F\u002Fwww.csis.org\u002Fprograms\u002Feurope-russia-and-eurasia-program\u002Fprojects\u002Frussia-and-eurasia\u002Fkremlin-playbook)_ series.\n\nLooking at examples of strategic corruption again highlights the _functionality_ of corruption. It’s used not only to gain money and control of resources but because it gives people the power to achieve their goals.\n\nThat functionality goes both ways. Even in democratic contexts, politicians can use [accusations of corruption](https:\u002F\u002Fedition.cnn.com\u002F2023\u002F08\u002F09\u002Fpolitics\u002Fhouse-oversight-republicans-hunter-biden\u002Findex.html) to erode trust in opponents or public institutions and weaken their legitimacy. On the other hand, politicians with a strong anti-corruption platform can see success in the polls, as [Guatemala](https:\u002F\u002Fwww.wsj.com\u002Fworld\u002Famericas\u002Fleftist-sociologist-to-take-office-as-guatemalas-new-president-1a378380) and Bulgaria have recently demonstrated.\n\n### What we can learn from corruption’s power and functionality\n\nThe main takeaway? Looking at power and functionality helps us better understand how corruption affects security and at why strategic corruption is increasingly becoming a concern.\n\nThe main lesson? That we need to fight (strategic) corruption by disrupting its functionality, i.e. making it less of an effective strategy for obtaining power and achieving other illicit goals. And to do that, we need to ensure that anti-corruption efforts are strategic, coordinated and effective.","how-strategic-corruption-fuels-insecurity-by-affecting-power-2582","How (strategic) corruption fuels insecurity by affecting power","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fa57ab670-9908-41dd-81ed-6a68124ff94b?width=1000&height=650&format=webp&quality=80",[],[139,140],[17],[201,203],{"tags_id":202},{"id":56,"name":57},{"tags_id":204},{"id":205,"name":206},973,"Corruption",2582,[147],[17],[211,212],1120,1121,[],[152],[],"2024-02-13T17:01:30.000Z","2026-05-07T21:29:55.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-strategic-corruption-fuels-insecurity-by-affecting-power-2582",{"id":221,"body":222,"status":6,"type":10,"date":223,"slug":224,"title":225,"image":226,"countries":227,"topic":230,"activity":231,"tags":232,"nid":233,"topics":234,"activities":235,"authors":236,"images":239,"websites":240,"area":21,"programme":21,"language":21,"translations":241,"translation_of":21,"user_created":74,"date_created":242,"user_updated":155,"date_updated":243,"content":244,"link":245},10285,"_Ukraine’s recovery will require billions of dollars – so leaders pledging reconstruction funds need to ensure Ukraine’s anti-corruption defences are up to the task. A joint opinion article by_ _Gretta Fenner, Managing Director, Basel Institute on Governance and Andrii Borovyk, Executive Director, Transparency International Ukraine. [View it in Ukrainian here.](https:\u002F\u002Fti-ukraine.org\u002Fblogs\u002Fne-dozvolte-vijni-kleptokrativ-zavadyty-vidbudovi-ukrayiny\u002F)_\n\nThe ongoing Russian war of aggression against Ukraine is causing unspeakable human tragedy. In addition, it is destroying the country’s economy and essential infrastructure. Rebuilding these won’t bring back those who died under Russian bombardments, but it will be critical for Ukraine’s recovery. And it is critical for Europe and the world; the war has only too dramatically illustrated how vulnerable and inter-dependent we all are.\n\nOn July 4 and 5 in Lugano, Switzerland, the Ukraine Recovery Conference will see leaders from around the world pledge hopefully billions to finance this recovery. It is estimated that up to USD 1 trillion will be needed, a sum likely to increase as the war wages on.\n\nWe applaud this and hope that these will not remain pledges, but that the urgently needed funds will be made available swiftly and generously. But in our [recommendations to those leaders](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fukraine-recovery-conference-anti-corruption-critical-condition-sustainable-recovery), we stress that where there is money, there is temptation. We highlight the need to prioritise the leadership selection process of Ukraine’s formidable anti-corruption institutions, including courts, use transparent procurement systems for reconstruction efforts, and strengthen the asset recovery systems so that they can help fuel the reconstruction efforts.\n\nEvery reconstruction effort brings with it massive corruption potential. In this regard, Ukraine will be no different from any other country which has seen a massive influx of funds as a result of natural disaster or war. Think Afghanistan, think Iraq, think the 2004 Indian Ocean tsunami.\n\nAnti-corruption has been high on Ukraine’s political agenda before the war. But even with significant reforms since 2014, the country is far from ready to withstand the inevitable attack by kleptocrats, organised criminal groups and corrupt officials at all levels who see a golden opportunity in Ukraine’s tragedy.\n\nLong before the Kremlin decided to invade Ukraine, it had been waging another war in Ukraine. This war pits the rule of law against the kleptocratic Soviet past which the Kremlin today wholeheartedly embraces as a vision for its present and future. Well aware that its legitimacy quickly crumbles when other countries with similar history make moves in the opposite direction, it has invented the Kremlin playbook to stop any such attempt in its tracks.\n\nWith the help of willing local enablers, it exports corruption to infiltrate the target countries’ governance, to deprive them of their resources and to destabilise their social fabric. Ultimately it destroys their statehood to the extent that in some of them, it is today those Russian sponsored kleptocratic enablers who are in charge; elected governments are kept around for a thin veneer of legitimacy.\n\nUkraine needs military support to fight back the Russian aggression, save its people and regain its territorial integrity. But Ukraine also needs anti-corruption weapons so that it can fight the kleptocratic Kremlin in this parallel war. If corruption is allowed to go unchecked, Ukraine’s reconstruction would hand a massive victory to those who benefit from this subversive kleptocratic war.\n\nTalking about corruption is never pleasant. Admitting that a country has corruption risks makes many squirm. But if we want to truly honour the heroic Ukrainian people and their sacrifices, corruption must be squarely at the centre of planning and implementation of recovery.\n\nWe urge world leaders to keep in mind these recommendations. Because if we don’t, then we allow the Kremlin to destroy Ukraine not once, but twice. And because nothing would undermine the Kleptocratic Kremlin more than a Ukraine that is able to rise from the ashes with integrity.\n\n_[See our joint recommendations in full](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2022-07\u002FUkraine-AC-recommendations_final.pdf) in English, [download the shorter infographic](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2022-07\u002FLuganoInfographic2.pdf) or view the [recommendations in Ukrainian](https:\u002F\u002Fti-ukraine.org\u002Fnews\u002Fantykoruptsiya-yak-krytychna-umova-stalogo-vidnovlennya\u002F)._\n\n_The blog post is available in Ukrainian here: [НЕ ДОЗВОЛЬТЕ ВІЙНІ КЛЕПТОКРАТІВ ЗАВАДИТИ ВІДБУДОВІ УКРАЇНИ](https:\u002F\u002Fti-ukraine.org\u002Fblogs\u002Fne-dozvolte-vijni-kleptokrativ-zavadyty-vidbudovi-ukrayiny\u002F)._","2022-07-04","dont-let-a-kleptocrats-war-destroy-ukraines-reconstruction-2245","Don’t let a kleptocrat’s war destroy Ukraine’s reconstruction","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F6c48dff8-a5ca-4d26-b214-b5af7cf4ff03?width=1000&height=650&format=webp&quality=80",[228,229],7242,7243,[138],[142,17,172,52],[],2245,[146],[142,17,172,52],[237,238],1162,1163,[],[152],[],"2022-07-07T16:24:49.000Z","2026-05-29T22:22:22.000Z",[],"\u002Fresources\u002Fnews\u002Fdont-let-a-kleptocrats-war-destroy-ukraines-reconstruction-2245",{"id":247,"body":248,"status":6,"type":10,"date":249,"slug":250,"title":251,"image":252,"countries":253,"topic":254,"activity":255,"tags":256,"nid":261,"topics":262,"activities":263,"authors":264,"images":266,"websites":267,"area":21,"programme":21,"language":22,"translations":268,"translation_of":21,"user_created":74,"date_created":269,"user_updated":155,"date_updated":270,"content":271,"link":272},10545,"Two recent EU publications underscore the central role of corruption and money laundering in enabling organised crime and threatening security – and how essential it is to invest more in efforts to investigate, seize and confiscate criminal assets.\n\nEuropol’s [2025 Serious and Organised Crime Threat Assessment](https:\u002F\u002Fwww.europol.europa.eu\u002Fpublication-events\u002Fmain-reports\u002Fchanging-dna-of-serious-and-organised-crime) (SOCTA) painted a sobering picture of how organised crime is “evolving at an unprecedented pace”, with corruption and money laundering as key enablers.\n\nThe SOCTA, among other inputs, informed the new European internal security strategy, [ProtectEU](https:\u002F\u002Fcommission.europa.eu\u002Fnews\u002Fcommission-presents-european-internal-security-strategy-2025-04-01_en). This equally sobering document sets out how the EU needs to involve all of society in tackling threats to security including organised crime, cybercrime and terrorism. It urges the rapid passing and implementation of the [EU Anti-Corruption Directive](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Feus-anti-corruption-directive-enters-critical-juncture) and emphasises that “seizing assets and confiscating criminal gains is essential.”\n\nWhat does this mean in practice for anti-corruption and asset recovery in Europe?\n\n### SOCTA: three factors driving organised crime’s transformation\n\nThe SOCTA is an intelligence-driven report that evaluates the impact of serious and organised crime on society. Published every four years, it is essential in shaping the EU’s criminal priorities.\n\nThis year’s assessment points to a profound transformation that “is making organised crime more dangerous, posing an unprecedented challenge to security across the EU and its Member States”.\n\nThe report reveals how organised criminal groups increasingly destabilise society. This includes by collaborating with so-called [hybrid threat](https:\u002F\u002Fwww.consilium.europa.eu\u002Fen\u002Fpolicies\u002Fhybrid-threats\u002F) actors that seek to undermine European stability and institutions in order to achieve their economic or political objectives. For example, criminal networks can further the agendas of hybrid threat actors through orchestrated ransomware attacks on critical infrastructure, businesses and government agencies.\n\nAgain, corruption exacerbates this destabilisation effect by enabling criminal networks to evade justice, undermine good governance, consolidate power and expand their operations. The ease of laundering illicit money also enables organised crime groups to bridge “the gap between the licit and illicit worlds”.\n\nSecond, criminal networks increasingly benefit from shifting their operations online. Digital infrastructure like the dark web, social media and e-commerce platforms make it easier for them to recruit individuals, market their illicit services, buy and sell products, conduct financial transactions, communicate via encrypted platforms and identify targets and victims.\n\nThird, the report highlights how new technologies – such as artificial intelligence and blockchain-based technologies such as crypto – act as catalysts for organised crime. Cyber-enabled fraud schemes have reached unprecedented levels and are expected to keep growing. Going forward, such technologies will continue to increasingly “drive criminal operations’ efficiency by amplifying their speed, reach, and sophistication”.\n\n### Parallel financial underworld grows; asset recovery remains low\n\nThe SOCTA highlights the evolving nature of money laundering techniques, emphasising that these “serve as crucial components of a parallel financial criminal underworld” circumventing anti-money laundering regulations.\n\nCryptocurrencies, non-fungible tokens (NFTs), decentralised finance (DeFi) platforms and AI-driven automation now facilitate greater anonymity and complexity in the money laundering process. As a result, even if illicit transactions are detected, the money may still disappear before it can be seized – and the individuals laundering the money may remain unknown.\n\nThese newer methods complement the existing – but still growing – use of cash-intensive businesses such as restaurants to launder illicit funds.\n\nThe enhanced capability of organised crime groups to hide their proceeds therefore contributes to “an alarmingly modest level of approximately 2%” confiscation rate of criminal proceeds.\n\n### Innovation to tackle evolving corruption risks\n\nThis complex and evolving landscape of organised crime and security threats demands a multi-faceted approach. And addressing corruption and enhancing asset recovery are a crucial part of that.\n\nInnovation will help. Just as criminals take advantage of increased access to data and digital technologies, so we – governments, law enforcement, citizens, business – need to leverage data and digital tools effectively.\n\nThat kind of research and innovation is a major goal of the [EU-funded FALCON research project](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fproject-falcon-innovating-fight-against-corruption-across-eu) to which the Basel Institute is contributing. A [2025 Policy Brief](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fhigh-level-corruption-analysis-schemes-costs-and-policy-recommendations) distills concrete insights and red flags from an analysis of 63 corruption cases, for example. This research will help policymakers to develop measures to identify and proactively address weaknesses in legal and administrative procedures that increase corruption risks.\n\nIn terms of tools, automated corruption risk assessment platforms could help law enforcement analyse data more efficiently and to uncover corruption patterns and new leads. Digitalisation can also help to minimise the discretion of public officials, for example at borders or in public procurement processes.\n\nMeanwhile, sophisticated tools and methods for [blockchain analytics](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fsmarter-blockchain-investigations-insights-interpol) can help trace illicit crypto flows and to uncover the individuals and networks behind the transactions.\n\n### Enhancing asset recovery: laws, investigations, coordination\n\n As highlighted by the SOCTA, “asset recovery is a powerful deterrent and an effective tool to tackle serious and organised crime”, because it cuts off criminal networks from their resources and prevents them from using these funds to undertake further criminal activity.\n\nFrom nearly two decades of experience of the Basel Institute’s International Centre for Asset Recovery (ICAR), we can say that improving success rates in asset recovery demands a comprehensive approach to enhancing confiscation mechanisms, financial investigations and coordination.\n\nIn terms of asset recovery legislation, there are [well-documented good practices](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-51). For the EU specifically and in the context of sophisticated methods to conceal illicit wealth, we would highlight the need to maximise [non-conviction-based](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-51) and [unexplained wealth](https:\u002F\u002Fbaselgovernance.org\u002Fpb-14) confiscation mechanisms. When well drafted and implemented, these are especially effective in targeting assets links to organised crime or corruption that are difficult to trace back to specific illegal activities.\n\nFinancial investigations are crucial to identify criminal assets, but not all financial investigations are the same. For example, [investigating financial flows involving crypto requires](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Frace-against-time-europol-basel-institute-governance-recommendations-preventing-and) specialist skills and analytical tools, as well as rapid, proactive collaboration with private-sector crypto asset service providers. In contrast, [financial investigations involving predominantly cash](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg40) or unregulated remittance methods such as hawala banking require the use of more traditional investigative methods, such as surveillance, searches and witness interviews.\n\nCoordination could be improved through the use of multi-agency [asset recovery task forces](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg33). These harness the expertise, resources and legal mandates of law enforcement, prosecutors, asset recovery offices and financial intelligence units, among others, and ensure a coordinated approach to recovering illicit assets. Meanwhile, [public-private partnerships](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg34) can help enhance the sharing of financial intelligence – thus closing the gap between the detection of money laundering and the enforcement of freezing measures.\n\nBuilding defences against corruption and illicit finance\n========================================================\n\nOrganised crime will continue to exploit regulatory loopholes and rapidly adapt to evolving legal and technological landscapes. In the current geopolitical landscape, we are glad that European institutions are taking a fresh look at the links between corruption, organised crime and security.\n\nAt the Basel Institute we will continue to support our partners in governments, international organisations, the private sector and civil society to, among other things:\n\n*   improve the effectiveness of anti-money laundering systems as new forms of financial crime evolve;\n*   address weaknesses in regulatory frameworks and gaps in the effective implementation of rules and laws; and\n*   improve all stages of the asset recovery chain, from detection and tracing to recovering criminal assets.","2025-04-23","keeping-europe-safe-means-keeping-up-with-corruption-and-financial-crime-threats-2798","Keeping Europe safe means keeping up with corruption and financial crime threats","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F56f85d4a-3b62-4f4f-ac1e-4e05b1a772e6?width=1000&height=650&format=webp&quality=80",[],[138],[17],[257],{"tags_id":258},{"id":259,"name":260},967,"Organised crime",2798,[146],[17],[265],1083,[],[152],[],"2025-04-23T10:01:34.000Z","2026-05-29T22:22:36.000Z",[],"\u002Fresources\u002Fnews\u002Fkeeping-europe-safe-means-keeping-up-with-corruption-and-financial-crime-threats-2798",{"id":274,"body":275,"status":6,"type":10,"date":276,"slug":277,"title":278,"image":279,"countries":280,"topic":281,"activity":282,"tags":283,"nid":284,"topics":285,"activities":286,"authors":287,"images":290,"websites":21,"area":21,"programme":21,"language":22,"translations":291,"translation_of":21,"user_created":74,"date_created":292,"user_updated":155,"date_updated":293,"content":294,"link":295},10584,"As cryptoassets and other blockchain-based tokens enter the mainstream, alarm bells are ringing about the risks of their misuse. The technology is neutral in itself, but like any mechanism to transfer value, it can and does facilitate a wide range of crimes.\n\nAnd it’s not just scams, hacks and ransomware attacks. Cryptoassets are now seen in practically all crime types, from drug trafficking and terrorist financing to sanctions evasion, and increasingly as a tool for laundering the proceeds of those crimes.\n\nWhen it comes to the links between crypto and _corruption_, research and closed case examples are still scant. But since both are important enablers of crime, it’s vital to better understand how they intersect.\n\nThis blog outlines some basic areas of concern. Despite the gaps in data and analysis, one thing is clear. While the technologies are fairly new, the corrupt practices are not: they are simply manifesting in different ways.\n\n> _Crypto and corruption: what we mean_\n> \n> _In this blog we take a broad view of both crypto and corruption. By “crypto”, we mean cryptoassets such as Bitcoin (BTC) and Ether (ETH) as well as stablecoins tied to fiat currencies such as Tether (USDT) and USD Coin (USDC); plus other digital tokens that run on public, decentralised blockchains. The scope also includes the companies, industries and services built around crypto, as well as the systems for their regulation and supervision and for law enforcement. “Corruption” refers not just to bribery, but to any abuse of entrusted power for undue benefit – whether financial or political, whether personal or for a collective entity._\n\n### 1 Crypto for bribery\n\nIs crypto a brilliant way to pay bribes and kickbacks? Transfers are pseudonymous after all – linked to long wallet addresses like _1Lbcfr2sAHTG9CgdQo3HTMTkV7LK4ZnX75_ rather than names. Transfers can be made directly between individuals, through decentralised platforms or peer-to-peer transactions, which avoids awkward questions about who is who and where the money comes from.\n\nCrypto holdings are easier to keep private, so might not be included in the asset declarations of politically exposed persons keen not to reveal all of their hidden wealth. And it’s fast and easy: you can transfer crypto to any person, anywhere in the world at the touch of a button. That makes it superficially more attractive than an international bank transfer, and less hassle and personal risk than travelling to another continent carrying suitcases stuffed with cash.\n\nSome clearly think crypto is great for bribes:\n\n*   In 2024, a Ukrainian Member of Parliament was [sentenced to eight years in prison](https:\u002F\u002Fhacc-decided.ti-ukraine.org\u002Fen\u002Fnews\u002Fnardepa-odarcenka-zasudili-do-8-rokiv-vyaznici) for offering a bribe of EUR 46,000 in bitcoin to secure funding for reconstruction projects.\n*   Crypto payments were allegedly made to a former senior official at the China Securities Regulatory Commission in return for [abuses of power](https:\u002F\u002Fwww.ccn.com\u002Fnews\u002Fcrypto\u002Fyao-qian-china-cbdc-crypto-corruption\u002F) in making appointments and securing loans – alongside expensive liquor and invitations to banquets.\n*   In June 2025, two employees of the state-owned China Construction Bank were charged in Hong Kong with bribery and other offences: they allegedly accepted around USD 470,000 in crypto in exchange for [authenticating false documents](https:\u002F\u002Fwww.artemis.bm\u002Fnews\u002Fchina-construction-bank-manager-accused-of-accepting-bribes-from-vesttoo-employee\u002F) for the now-bankrupt Israeli firm Vesttoo.\n\nYet the use of crypto for bribery has a unique vulnerability: transactions on public blockchains are permanent and publicly visible. If investigators can verifiably link an address to a suspect, the evidence of the bribery remains accessible forever.\n\nSadly, it’s pretty hard to identify bribes or kickbacks being paid unless you already know there’s a bribery scheme or you know the addresses of suspected accomplices. That might explain why major crypto bribery cases haven’t surfaced (yet!).\n\n### 2 Laundering proceeds of corruption using crypto\n\nWhat about laundering the proceeds of corruption? For those with a lot of dirty money to launder, crypto adds a new dimension to the playbook.\n\nSure, keep the shell companies and offshore bank accounts, the trusts and real estate and gambling schemes, the hawala networks. Now you can add to the mix by converting corrupt proceeds into crypto, converting these to other coins, hopping across blockchains and using privacy-enhancing technologies to throw investigators off track.\n\nAs adoption of tokenised assets grows – digital representations of financial or real-world assets – we can expect corrupt actors to buy not only villas in Tuscany and ski apartments in Switzerland, but tokens representing these. And while you can’t ski on a digital token, it is likely attractive to money launderers to be able to trade in a broad range of investments while keeping the beneficial owner hidden.\n\nAre corrupt actors using crypto to launder their funds? There’s little direct evidence, but it does seem likely. Corrupt individuals have long relied on professional money laundering services, often provided by lawyers and accountants. [Europol](https:\u002F\u002Fwww.europol.europa.eu\u002Fpublications-events\u002Fmain-reports\u002Fsocta-report) warns that these professionals,\n\n> “increasingly with specialised knowledge in digital asset trading, have developed parallel, underground financial systems that operate outside the regulatory frameworks governing legal financial institutions”.\n\nAnd we do see that law enforcement is starting to take down organised groups that specialise in laundering illicit funds, including through crypto.\n\nAn [Australian takedown](https:\u002F\u002Fwww.ato.gov.au\u002Fmedia-centre\u002Falleged-qld-money-laundering-organisation-dismantled) of an organised money laundering operation in June 2025, for example points to millions of tainted Australian dollars laundered through crypto exchanges as well as bank accounts, couriers, a car dealership and a sales company. Some outfits specialise in a specific clientele: in the Europol-coordinated [Operation Karasu](https:\u002F\u002Fwww.europol.europa.eu\u002Fmedia-press\u002Fnewsroom\u002Fnews\u002F17-providers-of-criminal-banking-services-arrested) in 2025, authorities arrested 17 suspects alleged to be providing money laundering services to Chinese- and Arabic-speaking clients using hawala banking, cash transactions and crypto.\n\nThe largest blockbuster takedown to date is the [October 2025 indictment of the Chairman of Prince Group](https:\u002F\u002Fwww.justice.gov\u002Fopa\u002Fpr\u002Fchairman-prince-group-indicted-operating-cambodian-forced-labor-scam-compounds-engaged), a Cambodia-based multinational business enterprise, and the filing of a forfeiture action for more than 127,000 bitcoin – approximately USD 15 billion at the time of seizure. The press release described the use of professional money laundering operations and pointed to highly sophisticated techniques, such as “spraying” stolen cryptoassets across multiple addresses to obscure the trail of the funds.\n\nCommenting on the indictment, the head of the U.S. Drug Enforcement Administration highlighted the role of corruption in such schemes. He explained how: \n\n> complex criminal schemes \\[such as this\\] exploit global financial systems and emerging technologies to conceal illicit proceeds. These networks operate at the intersection of drug trafficking, corruption, and financial crime, threatening the stability of institutions and communities, alike.\n\n### 3 Corrupt law enforcement in crypto cases\n\nSay you’re a law enforcement officer – a public servant. You’re one of the few in your agency with the technical skills to trace and seize cryptoassets suspected of being involved in crime.\n\nYou see an opportunity to supplement your salary by stealing crypto during an investigation or taking payments from criminals to leave their holdings in peace. Nobody will know – surely?\n\n*   That’s what two US agents from the [Drug Enforcement Administration](https:\u002F\u002Fwww.justice.gov\u002Farchives\u002Fopa\u002Fpr\u002Fformer-dea-agent-sentenced-extortion-money-laundering-and-obstruction-related-silk-road) and [Secret Service](http:\u002F\u002Fwww.justice.gov\u002Farchives\u002Fopa\u002Fpr\u002Fformer-secret-service-agent-sentenced-scheme-related-silk-road-investigation) thought, when they abused their power as law enforcement officers and their access to government-controlled wallets to steal tens of millions of USD in bitcoin linked to the takedown of the illicit Silk Road online marketplace.\n*   In Russia, a former investigator was found guilty in 2023 of [accepting bitcoin bribes](https:\u002F\u002Fcointelegraph.com\u002Fnews\u002Frussia-seizes-10-million-bitcoin-from-official-biggest-bribery) equivalent to tens of millions of US dollars from an organised crime group in order not to confiscate their bitcoin holdings – estimated at USD 138 million at the time.\n*   In Iran, senior intelligence officers of the Revolutionary Guard are alleged to have gained around USD 21 million during the takedown of the Cryptoland exchange: following the CEO’s arrest, they [stole and sold his tokens](https:\u002F\u002Fwww.iranintl.com\u002Fen\u002F202503309549) before the arrest was made public and the tokens’ value collapsed. \n\nIt’s not uncommon for law enforcement officers to go rogue, or for bribes to be paid to influence law enforcement actions or judicial proceedings. So authorities don’t just need to build capacity to go after crypto-related crime. They also need to look out for crypto-related corruption risks among their own ranks, including entities such as asset management offices that have custody over seized and confiscated cryptoassets.\n\n### 4 When the crypto industry meets politics\n\nCrypto is a fast-evolving industry that demonstrates genuinely exciting financial and technological innovation. It’s no wonder that politicians all over the world are getting interested.\n\nCorrupt behaviour by politicians involving the crypto industry is still a realm of speculation, as data on real-world cases is sparse. But red flags for corruption are a common feature of all fast-growing, profitable industries with highly technical aspects, like mining and defence. So, it is sensible to look out for common risks, which span from licencing schemes to the shaping of cryptoasset regulations or the resources put into enforcement.\n\nWhen it comes to public trust in government, even suspicions of crypto-related wrongdoing matter. Examples range from a [political financing scandal in Colombia](https:\u002F\u002Fwww.theblock.co\u002Fpost\u002F293857\u002Fcolombian-president-crypto-donation-campaign-2022-daily-cop) to [graft accusations in Venezuela](https:\u002F\u002Fwww.barrons.com\u002Fnews\u002Fvenezuela-kills-off-petro-cryptocurrency-1e2b0317) and to allegations of [crypto-related irregularity affecting the US President](https:\u002F\u002Fwww.economist.com\u002Fleaders\u002F2025\u002F05\u002F15\u002Fcrypto-has-become-the-ultimate-swamp-asset) and his family.\n\nAnd in the Czech Republic, when the Justice Ministry [accepted a bitcoin donation](https:\u002F\u002Fwww.occrp.org\u002Fen\u002Fnews\u002Fbitcoin-scandal-triggers-czech-government-crisis) worth around USD 46 million from a convicted criminal, the ensuing scandal triggered a public investigation and the resignation of the Justice Minister; some feared it might even topple the government.\n\n### 5 Corruption fuelling organised crime and state capture\n\nThe link between crypto and corruption with possibly the most damaging social impact is its role in enabling criminal gangs to carry out cybercrime and launder money with impunity.\n\nAs detailed in a 2025 UNODC report on [corruption and cybercrime](https:\u002F\u002Fwww.unodc.org\u002Froseap\u002Fuploads\u002Fdocuments\u002FPublications\u002F2025\u002F2025.10.21_The_Nexus_Between_Cybercrime_and_Corruption.pdf), corruption both creates the “permissive environment” that allow cybercrime operations to flourish and “enables many daily operations of cybercriminal networks.”\n\nIn [Southeast Asia](https:\u002F\u002Fwww.unodc.org\u002Froseap\u002Fen\u002F2025\u002F04\u002Fcyberfraud-inflection-point-mekong\u002Fstory.html), for example, a separate UNODC report depicts how industrial-scale scam centres run by organised crime groups generate huge amounts of illegal revenue – mostly in crypto. Despite often being plainly identified in public reports, they remain operational and engage in human trafficking to obtain unwilling workers. The report emphasises “high rates of corruption which criminal actors can leverage” to continue their scam operations unmolested.\n\nUNODC warns that the revenue generated by scam centres, coupled with the ability to easily launder the stolen crypto, is increasing the power and influence of organised crime groups as well as their financial liquidity. And that gives them even more ability to corrupt and capture politicians and states.\n\nThat may already be happening, according to a November 2025 _Economist_ report on [allegations of political collusion](https:\u002F\u002Fwww.economist.com\u002Fasia\u002F2025\u002F11\u002F20\u002Fthe-politicians-protecting-huge-criminal-networks) in scam operations in Cambodia, the Philippines and Thailand. These have led to the resignation of a deputy finance minister, the jailing of a mayor and a warning from Thailand's deputy leader of the opposition that without action against politicians colluding in scam operations,\n\n> “we’ll wake up to find the country run by crooks in suits\".\n\n### What to do?\n\nCrypto represents an exciting transformation in financial systems. The industry and its underlying technology could improve privacy, efficiency and access to financial markets. This may benefit many people poorly served by today’s centralised systems.\n\nBut without a clear understanding of crypto-related risks and proper safeguards, the industry could create more opportunities for corruption and related financial crimes such as money laundering, terrorist financing and sanctions evasion. Crypto-fuelled corruption could weaken trust in governments and be leveraged to undermine the stability and security of nation states.\n\nAt the Basel Institute, we’re keen to explore better how the worlds of crypto and corruption intersect and how best to mitigate both systemic and day-to-day risks. We’re also committed to building the capacity of anti-corruption and asset recovery practitioners to “follow the money” across blockchains and to connect these to wider financial and criminal investigations.\n\nBeyond training for [individuals](https:\u002F\u002Fbaselgovernance.org\u002Fcrypto-aml-training) and [public agencies](https:\u002F\u002Fbaselgovernance.org\u002FICAR-training), we also bring together people from across sectors and geographies at our annual [Global Conference on Criminal Finances and Cryptoassets](https:\u002F\u002Fbaselgovernance.org\u002F9crc) together with Europol and UNODC. Look out for more on this topic in the coming months!","2025-11-27","crypto-the-ultimate-enabler-of-corruption-2882","Crypto: the ultimate enabler of corruption?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fd41fd31d-6c56-48e0-96cc-2be74f18b731?width=1000&height=650&format=webp&quality=80",[],[138],[17],[],2882,[146],[17],[288,289],1360,1361,[],[],"2025-11-27T17:01:44.000Z","2026-05-29T22:22:38.000Z",[],"\u002Fresources\u002Fnews\u002Fcrypto-the-ultimate-enabler-of-corruption-2882",{"left":297,"top":297,"width":298,"height":298,"rotate":297,"vFlip":299,"hFlip":299,"body":300},0,20,false,"\u003Cpath fill=\"currentColor\" fill-rule=\"evenodd\" d=\"M17 10a.75.75 0 0 1-.75.75H5.612l4.158 3.96a.75.75 0 1 1-1.04 1.08l-5.5-5.25a.75.75 0 0 1 0-1.08l5.5-5.25a.75.75 0 1 1 1.04 1.08L5.612 9.25H16.25A.75.75 0 0 1 17 10\" clip-rule=\"evenodd\"\u002F>",1780676517821]