[{"data":1,"prerenderedAt":436},["ShallowReactive",2],{"news-how-stronger-borders-can-create-smarter-corruption-lessons-from-one-of-europe039s-most-strategic-border-crossings-2972":3,"news-how-stronger-borders-can-create-smarter-corruption-lessons-from-one-of-europe039s-most-strategic-border-crossings-2972-similar":146,"i-heroicons:arrow-left-20-solid":431},[4],{"id":5,"status":6,"date_created":7,"date_updated":8,"title":9,"type":10,"body":11,"date":12,"topic":13,"slug":16,"activity":17,"nid":19,"topics":20,"activities":21,"programme":22,"area":22,"websites":22,"language":23,"image":24,"translation_of":22,"countries":35,"tags":80,"authors":126,"images":143,"translations":144,"content":145},10615,"published","2026-06-04T21:13:44.000Z","2026-06-04T21:14:56.000Z","How stronger borders can create smarter corruption: lessons from one of Europe's most strategic border crossings","Blog","When Bulgaria joined the European Union in 2007, many believed it would lead to more secure, transparent and less corrupt borders. New regulations, infrastructure modernisation and digitalised customs procedures all followed. European standards and money arrived together.\n\nYet corruption did not disappear at the Kapitan Andreevo border checkpoint, the main land crossing between Bulgaria and Türkiye and one of the busiest gateways between Europe and Asia. Instead, it evolved.\n\nThis is the central finding of a recent [article](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fevolution-corruption-and-crimes-kapitan-andreevo-border-checkpoint-impact-eu-accession) by the Prevention, Research and Innovation team of the Basel Institute on Governance – Dr Jacopo Costa, Dr Claudia Baez Camargo, Noémi Jäger and Dr Saba Kassa – published in the _Journal of Illicit Trade, Financial Crime, and Compliance_.\n\nThe article examines how criminal networks, smugglers, businesses and corrupt officials adapted to Bulgaria’s EU integration. It illustrates how corruption behaves like an adaptive ecosystem: when regulations and border control technologies change, corruption changes with them.\n\nA border built for opportunity – legal and illegal\n\nBorder spaces concentrate discretionary power in the hands of customs officers, border guards, inspectors and regulators, while bringing together also traders, transport companies, migrants, smugglers, criminal groups and political actors.\n\nKapitan Andreevo is a particularly instructive case due to its strategic location, with thousands of trucks, travellers and goods passing through the border checkpoint daily.\n\nBefore Bulgaria’s EU accession, corruption at the checkpoint was already deeply embedded. The 1990s brought economic crisis, shortages of consumer goods, weak state capacity and rapidly expanding informal markets. Smuggling became a profitable survival strategy.\n\nBorder officials could be bribed to overlook undeclared goods, counterfeit products and tax evasion. Duty-free shops in the \"no man's land\" between Bulgaria and Türkiye became hubs for smuggling cigarettes, alcohol and petroleum products.\n\nCorruption operated at multiple levels:\n\n*   everyday exchanges between traders, drivers and officials, often based on long-standing personal relationships, at the lower level\n*   connections between politicians, senior civil servants, business elites and organised crime at the higher level.\n\nSmuggling routes required political protection. Profits flowed upward through patronage systems.\n\nEU accession changed the rules of the game\n\nBulgaria’s EU accession radically transformed the legal and institutional environment. The country had to align its customs regulations, VAT rules, excise tax systems, phytosanitary standards and border procedures with EU standards – a gradual process requiring significant investment. The reforms affected almost every aspect of border governance.\n\nCustoms procedures became increasingly digitalised. New systems such as the VAT Information Exchange System (VIES) and the Excise Movement and Control System (EMCS) improved cross-border monitoring.\n\nPhytosanitary and veterinary inspections became stricter. Migration controls tightened through alignment with Schengen rules and access to systems like the Schengen Information System (SIS) and international databases of stolen documents and vehicles.\n\nMeanwhile, new border control technologies – X-ray machines, scanners, thermal cameras and risk-analysis tools – expanded the state’s capacity to detect illicit activity.\n\nFrom a policy perspective, this appeared to be a modernisation success story. But criminal systems rarely remain static when the environment changes.\n\nCorruption did not decline – it adapted\n\nThe most striking finding is that stronger controls often increase the strategic value of corruption.\n\nAfter EU accession, crossing the border illegally became more difficult, risky and expensive. Corruption became necessary not only to speed up procedures but to bypass sophisticated control and regulatory systems.\n\nIn other words, modernisation transformed the function of corruption: Criminal actors began targeting specialised procedures, such as food safety inspections, VAT systems, automated license plate recognition, laboratory testing and digital customs controls.\n\nVAT fraud and the manipulation of digital systems\n\nVAT fraud illustrates this adaptation clearly. Within the EU, exports are often subject to a VAT rate of 0 (zero) percent, which means companies can reclaim any VAT they have already paid domestically. Criminal actors exploited this through \"carousel fraud\" schemes involving fictitious transactions chains.\n\nAt Kapitan Andreevo border checkpoint, for example, corruption allegedly enabled traders to manipulate customs procedures. One method involved corrupt officials manually entering fake truck registrations into customs systems to simulate border crossings, enabling fraudulent VAT refunds for exports that never occurred.\n\nEven more revealing was the manipulation of automated license plate recognition: corrupt actors reportedly disabled automated recognition and manually entered altered plates using Cyrillic characters resembling Latin letters, allowing smugglers to bypass alerts and inspections.\n\nThis illustrates a pattern seen in many modern corruption systems: digitalisation does not automatically eliminate corruption. Instead, corruption turns towards the technological systems themselves.\n\nFood safety, privatisation and rent-seeking\n\nEU food safety and phytosanitary regulations created new bottlenecks and forms of discretionary authority. The research describes two recurring manipulation strategies:\n\n*   selective sampling during inspections, where officials took samples only from \"clean\" sections of shipments; and\n*   falsification of laboratory tests to certify unsafe products as compliant.\n\nThese risks increased after some border functions were outsourced to private companies. At Kapitan Andreevo, food testing, parking operations and vehicle disinfection were privatised. This reform, intended to increase efficiency, allegedly created new opportunities for rent extraction.\n\nThe controversy surrounding Eurolab 2011, which reportedly obtained monopolistic control over food safety testing under questionable legal arrangements became emblematic of these tensions.\n\nThe broader implication: privatisation of public functions does not necessarily reduce corruption risks. It can shift them into hybrid public-private arrangements where accountability is weaker and oversight is more fragmented.\n\nThe rise of “routinised” corruption\n\nThe study highlights the increased organisation of corruption itself. Today, no single official can independently guarantee a smuggling route. Procedures involve multiple agencies, overlapping inspections and layered oversight.\n\nAs a result, corruption evolved towards collective coordination. Customs officers, border guards, supervisors, intermediaries and sometimes political actors participate in networks where bribes are pooled and redistributed.\n\nThese schemes resemble coordinated organisational systems with revenue-sharing mechanisms, internal hierarchies and protection structures rather than isolated rogue actors.\n\nThis reflects an important conceptual change: border corruption can function as an embedded institutional ecosystem sustained through cooperation, mutual dependence and political protection.\n\nDrug trafficking: when corruption becomes too risky\n\nInterestingly, corruption is not always the preferred strategy. In drug trafficking, for example, the risks are dramatically higher. Border officials caught facilitating drug trafficking could face severe criminal penalties, including organised crime charges and lengthy prison sentences.\n\nAs a result, traffickers increasingly invest in sophisticated concealment methods. One example is the \"twin trucks\" strategy: several nearly identical trucks carrying similar cargo cross the border simultaneously during heavy traffic, with only one of them containing drugs. Since inspection capacity is limited, the probability is high that the \"clean\" trucks are checked while the drug shipment passes undetected.\n\nThis shows that corruption and criminality do not always go hand in hand. Sometimes, stronger anti-corruption measures push criminals towards deception and concealment rather than bribery.\n\nThe bigger lesson: criminal systems are adaptive\n\nThe case study of the Kapitan Andreevo border crossing is not just about Bulgaria. Policymakers often assume that more technology, controls and regulation will automatically reduce corruption and illicit trade.\n\nBut criminal systems and corruption adapt. Informal networks reorganise around the vulnerabilities created by reforms. Every regulatory innovation creates new incentives, bottlenecks and opportunities for exploitation.\n\nThis does not mean reforms are useless. Many EU measures have clearly strengthened border management. However, reforms must be designed with an understanding of adaptive behaviour. Otherwise, states risk producing unintended consequences: stronger incentives for bribery, use of alternative trafficking routes, technological manipulation, new forms of collusion or opaque privatisation structures.\n\nI and my co-authors argue for a more integrated approach that combines anti-corruption and anti-crime strategies. We also emphasise the importance of anticipatory governance and foresight-oriented policymaking that try to predict how illicit actors will respond to institutional changes before reforms are implemented.\n\nThis may be the most important lesson from Kapitan Andreevo. Borders are not static lines defended by static institutions against static threats. They are evolving ecosystems where states, markets, technologies and criminal actors constantly adapt to one another.\n\nLearn more\n\n*   Access the full article, “[The Evolution of Corruption and Crimes at Kapitan Andreevo Border Checkpoint: The Impact of EU Accession](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fevolution-corruption-and-crimes-kapitan-andreevo-border-checkpoint-impact-eu-accession)”.\n*   Read our [Quick Guide 38 to border corruption](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg38) for a short introduction.\n*   Read our Working Paper 58, “Corruption as a facilitator of drug trafficking in the port of Rotterdam” for a related analysis.","2026-05-26",[14,15],"Prevention"," Research and Innovation","how-stronger-borders-can-create-smarter-corruption-lessons-from-one-of-europe039s-most-strategic-border-crossings-2972",[18],"Insights",2972,[14,15],[18],null,"English",{"id":25,"storage":26,"filename_disk":27,"filename_download":28,"title":29,"type":30,"created_on":7,"modified_on":7,"charset":22,"filesize":31,"width":32,"height":33,"duration":22,"embed":22,"description":22,"location":22,"tags":22,"metadata":34,"focal_point_x":22,"focal_point_y":22,"tus_id":22,"tus_data":22,"uploaded_on":7},"693afaed-084c-4590-aafd-c2d51b28adf7","local","693afaed-084c-4590-aafd-c2d51b28adf7.webp","tmp.webp","How stronger borders can create smarter corruption: lessons from one of Europe's most strategic border crossings","image\u002Fwebp",12144,800,533,{},[36,62],{"id":37,"news_id":38,"countries_id":56},7814,{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":41,"slug":16,"activity":42,"nid":19,"topics":43,"activities":44,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":45,"tags":47,"authors":51,"images":53,"translations":54,"content":55},"03bebfd8-0b40-4a2a-820d-b9d9c13b9de6","b0662e2a-864d-4888-a1b7-4342b7570b30",[14,15],[18],[14,15],[18],[37,46],7815,[48,49,50],6003,6005,6006,[52],1373,[],[],[],{"id":57,"name":58,"code":59,"latitude":60,"longitude":61},22,"Bulgaria","BG",42.73388,25.48583,{"id":46,"news_id":63,"countries_id":74},{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":64,"slug":16,"activity":65,"nid":19,"topics":66,"activities":67,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":68,"tags":69,"authors":70,"images":71,"translations":72,"content":73},[14,15],[18],[14,15],[18],[37,46],[48,49,50],[52],[],[],[],{"id":75,"name":76,"code":77,"latitude":78,"longitude":79},220,"Turkey","TR",38.96375,35.24332,[81,96,111],{"id":48,"news_id":82,"tags_id":93},{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":83,"slug":16,"activity":84,"nid":19,"topics":85,"activities":86,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":87,"tags":88,"authors":89,"images":90,"translations":91,"content":92},[14,15],[18],[14,15],[18],[37,46],[48,49,50],[52],[],[],[],{"id":94,"name":95},859,"Corruption risks",{"id":49,"news_id":97,"tags_id":108},{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":98,"slug":16,"activity":99,"nid":19,"topics":100,"activities":101,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":102,"tags":103,"authors":104,"images":105,"translations":106,"content":107},[14,15],[18],[14,15],[18],[37,46],[48,49,50],[52],[],[],[],{"id":109,"name":110},982,"Anti-corruption",{"id":50,"news_id":112,"tags_id":123},{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":113,"slug":16,"activity":114,"nid":19,"topics":115,"activities":116,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":117,"tags":118,"authors":119,"images":120,"translations":121,"content":122},[14,15],[18],[14,15],[18],[37,46],[48,49,50],[52],[],[],[],{"id":124,"name":125},1374,"Law enforcement",[127],{"id":52,"news_id":128,"authors_id":139},{"id":5,"status":6,"user_created":39,"date_created":7,"user_updated":40,"date_updated":8,"title":9,"type":10,"body":11,"image":25,"date":12,"topic":129,"slug":16,"activity":130,"nid":19,"topics":131,"activities":132,"programme":22,"area":22,"websites":22,"translation_of":22,"language":23,"countries":133,"tags":134,"authors":135,"images":136,"translations":137,"content":138},[14,15],[18],[14,15],[18],[37,46],[48,49,50],[52],[],[],[],{"id":140,"name":141,"position":22,"image":142},550,"Dr Jacopo Costa","90469998-3598-471d-9499-48b19f557c7d",[],[],[],[147,170,204,246,277,310,345,384,408],{"id":148,"body":149,"status":6,"type":10,"date":150,"slug":151,"title":152,"image":153,"countries":154,"topic":155,"activity":157,"tags":159,"nid":160,"topics":161,"activities":162,"authors":163,"images":165,"websites":22,"area":22,"programme":22,"language":23,"translations":166,"translation_of":22,"user_created":39,"date_created":167,"user_updated":39,"date_updated":167,"content":168,"link":169},10628,"It is becoming a truism that projects designed to address society’s biggest problems – like corruption or environmental degradation – need to be based on an understanding of the political context.\n\nIt is clear why. Without an understanding of the political context, we may miss important policy opportunities or stakeholders who can support and sustain the project goals. Our efforts may clash with power dynamics in unexpected ways, introducing unforeseen risks and undermining what we seek to achieve.\n\nTaking the political context into account in a project’s _theory of change_ enables us to learn about potential obstacles and adapt our plan accordingly. An insight into the local power dynamics and politics can also strengthen and validate the underlying logic of a project.\n\nSo why don’t we use political economy insights in anti-corruption or conservation projects more often and more effectively?\n\n### Six-step guidance\n\nTogether with Micol Martini of WWF, I recently published a [guide](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Ftranslating-political-economy-insights-conservation-practice-six-step-guide) that offers practical suggestions for integrating political economy analysis results into a theory of change.\n\nShe summarises the findings brilliantly in this [IUCN blog,](https:\u002F\u002Fwww.iucn.org\u002Fcrossroads-blog\u002F202311\u002Funderstanding-power-and-politics-better-conservation-outcomes) so I won’t repeat them here.\n\nInstead, at the guide’s [online launch event](https:\u002F\u002Fwww.worldwildlife.org\u002Fpages\u002Ftnrc-event-pea-into-practice-using-political-economy-for-environmental-anti-corruption-theories-of-change), I first highlighted two common barriers to using political economy analyses in practice and ways to mitigate them.\n\n### Myth 1: Political economy analyses are complicated to produce\n\nFirst, political economy analyses are often perceived as complicated to produce, requiring sophisticated political science skills.\n\nThat isn’t true. Political economy analyses come in all shapes and sizes. Our guidance emphasises that pragmatic approaches can be useful in identifying the right political economy analysis approach.\n\nPolitical economy analyses are less about having the right _skills_ and more about asking the right _questions_.\n\n### Myth 2: Political economy analyses are problematic to use\n\nSecond, political economy analyses are sometimes perceived as complicated to use.\n\nThis is reinforced by the idea that politics and power are negative, presenting a danger to programmes.\n\nIn fact, it is helpful to see how politics offers possibilities, not only problems. Understanding the politics and the context helps us to see new connections, find the right stakeholders to engage and spot the low-hanging fruit.\n\nPolitical priorities also shift, so it's good to keep abreast of how changes might impact a new or ongoing programme.\n\n### What’s needed?\n\nAlso at the launch event, I emphasised the need for spaces for dialogue between those conducting political economy analyses and programme implementers.\n\nBecause political economy analysis is not only about thinking politically, it is about _working_ politically.\n\nFor example, as part of a collaboration with the Targeting Natural Resource Corruption (TNRC) project, we [conducted](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fhow-political-economy-analysis-can-support-corruption-risk-assessments-strengthen-law) political economy analyses in three countries to understand why corruption risks may arise in the investigation and prosecution of illegal wildlife trade cases.\n\nWe had two different types of analysis. One looked at what kind of corruption risks may emerge in investigations and prosecutions of illegal wildlife trade cases. The other study explored the broader context and identified the underlying drivers of the corruption risks.\n\nInstead of just sending the results to stakeholders, we organised conversations where we presented the findings of the political economy analysis, summarised the key ideas and reflected on the implications for anti-corruption policies.\n\nIn this way, we helped our colleagues and partners to design anti-corruption interventions that would:\n\n*   be more effective in their particular context;\n*   be more resilient to threats from powerful political interests and stakeholders;\n*   address the causes rather than only the symptoms;\n*   identify better ways to monitor and evaluate progress;\n*   be easier to adapt to changes in the political context.\n\n### Learn more\n\n*   Read the six-step guide for practitioners: [Translating political economy insights into conservation practice](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Ftranslating-political-economy-insights-conservation-practice-six-step-guide), by Micol Martini and Saba Kassa\n*   Read our TNRC practice note: [How political economy analysis can support corruption risk assessments to strengthen law enforcement against wildlife crimes](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fhow-political-economy-analysis-can-support-corruption-risk-assessments-strengthen-law).","2023-12-21","how-to-make-better-use-of-political-economy-analysis-in-anti-corruption-and-conservation-programming-2564","How to make better use of political economy analysis in anti-corruption and conservation programming","\u002Fpics\u002Fimg-placeholder.png",[],[156,14,15],"Green Corruption",[158,18],"Research",[],2564,[156,14,15],[158,18],[164],1380,[],[],"2026-06-04T21:14:01.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-to-make-better-use-of-political-economy-analysis-in-anti-corruption-and-conservation-programming-2564",{"id":171,"body":172,"status":6,"type":10,"date":173,"slug":174,"title":175,"image":176,"countries":177,"topic":178,"activity":179,"tags":181,"nid":184,"topics":185,"activities":187,"authors":188,"images":189,"websites":22,"area":22,"programme":22,"language":23,"translations":190,"translation_of":22,"user_created":39,"date_created":191,"user_updated":192,"date_updated":193,"content":194,"link":203},10607,"Corruption is not just a collection of isolated acts by individuals. It is a complex, adaptive system that evolves in response to efforts to control it. And seeing it this way opens up new possibilities to tackle it more effectively.\n\nThis was the central message of a recent Basel Institute on Governance research webinar exploring how corruption evolves and what this means for designing interventions that remain effective over time.\n\nTwo senior researchers from the Basel Institute's Prevention, Research and Innovation – Dr Claudia Baez Camargo and Dr Jacopo Costa – were joined by Dr Maria Nizzero, Head of Sanctions Policy at UK Finance and Associate Research Fellow at RUSI, to explore corruption's networked nature and its implications.\n\nThese implications are practical as much as conceptual. Understanding corruption as a networked, adaptive system changes how corruption, organised crime, sanctions evasion and related threats need to be addressed in practice.\n\n### Corruption as a dynamic system\n\nA recent [academic paper](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fconceptualizing-evolution-corruption-empirical-analysis-italy) by Dr Baez Camargo and Dr Costa highlights a key gap in how corruption is typically analysed. While it is widely accepted that corrupt and criminal strategies change over time, the mechanisms driving that change have received far less attention.\n\nTheir analytical framework suggests that corruption evolves through changes in the behaviour of individuals within networks, shaped by shifts in the broader environment. These shifts may include stronger enforcement, legal and regulatory reforms, technological developments, or wider political and economic change. When new strategies prove effective, they spread across networks through collaboration, brokerage and imitation.\n\nA case study of Italy illustrates this process. In the early 1990s, corruption operated through relatively centralised, pyramidal structures linked to political parties. Over time, following scandals, reforms and increased scrutiny, this system became more fragmented and decentralised. Corrupt practices moved away from formalised exchanges and became more networked, informal and embedded in relationships.\n\nThe outcome was not less corruption, but different corruption.\n\nAs Dr Costa noted, corruption and anti-corruption are engaged in an “uninterrupted dance”, in which “very often, corrupt actors are two steps ahead of us”.\n\n### The concept of the “kleptocratic enterprise”\n\nLooking at corruption through a network lens also opens up new ways of thinking about how to tackle it.\n\n[Research by Dr Nizzero and co-authors](https:\u002F\u002Fgiace.org\u002Fwp-content\u002Fuploads\u002F2026\u002F01\u002FGIACE_Kleptocratic-Enterprises_NizzeroHeathershawMayne.pdf) Professor John Heathershaw and Professor Tom Mayne highlights the persistent challenges of asset recovery and enforcement in cases of large-scale corruption. Illicit wealth is often concealed through complex ownership structures, dispersed across jurisdictions and distanced from its original source over time. Legal frameworks may exist, but applying them effectively remains difficult.\n\nA key part of the problem lies in the role of professional service providers. Lawyers, accountants, real estate actors, company service providers and others help move, manage and shield assets. These actors often operate across borders and may serve a wide range of clients, including both organised crime groups and politically exposed individuals.\n\nThis has led to the idea of a “kleptocratic enterprise”: a networked system in which clients demand services such as concealment and asset protection, and a range of actors supply those services. Viewing corruption in this way shifts attention towards patterns of conduct, relationships and enabling structures.\n\nIt also suggests that tools used to tackle organised crime, such as anti-racketeering or anti-mafia approaches, may offer useful insights. These frameworks often focus on networks rather than individuals, combine multiple legal tools and allow for a broader understanding of harm, including the impact on society.\n\nAt the same time, responses must remain grounded in due process and the rule of law. Stronger measures can create new risks, including displacement of illicit activity to other jurisdictions or unintended consequences linked to overreach. The challenge is to expand the toolkit without compromising core legal principles.\n\n### When enforcement creates new risks\n\nField research by the Basel Institute under the EU-funded [FALCON project](https:\u002F\u002Fwww.falcon-horizon.eu\u002F) shows how quickly corrupt and criminal networks adapt to enforcement pressure.\n\nAt the [Port of Rotterdam](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-58), increased inspections and surveillance aimed at tackling drug trafficking made insider access more valuable. Corruption became a critical mechanism for bypassing strengthened controls, illustrating how enforcement can shift incentives in ways that reinforce the role of corruption.\n\nAt the Kapitan Andreevo border crossing between Bulgaria and Turkey, changes linked to EU accession, including new regulatory frameworks and stronger border controls, were followed by new forms of corruption and criminal activity. These included routinised extractive practices, shifts in smuggling strategies and the emergence of new actors.\n\nAcross both cases, the pattern is consistent. Measures designed to reduce corruption and illicit activity can reshape how those activities are organised and carried out.\n\n### Why networks are so resilient\n\nOne reason corruption adapts so effectively lies in the nature of the networks themselves.\n\nAs Dr Baez Camargo explains, enforcement-focused approaches can become a “whack-a-mole game” when underlying incentives remain unchanged. Efforts to close one avenue often lead to the emergence of another.\n\n[Informal networks](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fquick-guide-23-informal-networks-and-anti-corruption) are particularly resilient because they are built on more than financial exchange. Trust, personal relationships and shared social norms play a central role. These elements are difficult to detect, harder to regulate and highly adaptable.\n\nCriminal and corrupt networks are also flexible and opportunistic. They can shift strategies, routes and methods quickly, drawing on significant resources and expertise. Formal institutions, by contrast, operate within legal and procedural constraints, which can limit their ability to respond at the same pace.\n\n### Towards more adaptive responses\n\nIf corruption behaves like a complex adaptive system, anti-corruption efforts need to reflect that reality.\n\nOne emerging approach is to place greater emphasis on understanding systems rather than focusing narrowly on individual interventions. This involves mapping relationships, incentives and behavioural patterns in much greater depth, and remaining alert to how these evolve over time.\n\nIt also requires a shift away from strictly linear theories of change. Fixed indicators and predefined outcomes can miss important developments, particularly when systems are dynamic and interconnected. A more flexible approach allows practitioners to identify early signals of change, whether positive or negative, and adjust their strategies accordingly.\n\nAs Dr Baez Camargo puts it, “we cannot keep thinking that change is linear”. A better understanding of systems, combined with the ability to detect and respond to change, is essential for staying relevant in rapidly evolving contexts.\n\n### A shift in perspective\n\nTaken together, these insights point to a broader conclusion. Corruption is not static, and responses to it cannot be static either.\n\nUnderstanding corruption as a networked, adaptive system changes how problems are defined and how solutions are designed. It brings greater attention to relationships, incentives and enabling structures. It also highlights the importance of anticipating how systems will respond to interventions.\n\nFor practitioners working on corruption, organised crime or related risks, this shift is increasingly important. Integrating it into programming should help us not only respond more quickly as corruption adapts – i.e. whack the moles more rapidly when they pop up. It should also help us design flexible, creative and context-sensitive interventions that can genuinely disrupt these resilient illicit networks and themselves adapt to remain effective over time.\n\n### Learn more\n\n*   [Conceptualizing the evolution of corruption: an empirical analysis from Italy](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fconceptualizing-evolution-corruption-empirical-analysis-italy), by Dr Jacopo Costa and Dr Claudia Baez Camargo.\n*   [Corruption as a facilitator of drug trafficking in the port of Rotterdam](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-58), by Dr Saba Kassa and Dr Jacopo Costa \n*   [The Kleptocratic Enterprise: Lessons from organised crime to target transnational corruption and strengthen asset recovery in the UK](https:\u002F\u002Fgiace.org\u002Fwp-content\u002Fuploads\u002F2026\u002F01\u002FGIACE_Kleptocratic-Enterprises_NizzeroHeathershawMayne.pdf), by Dr Maria Nizzero, Professor John Heathershaw and Professor Tom Mayne\n\n### Webinar recording\n\n\u003Ciframe allowfullscreen=\"\" frameborder=\"0\" height=\"315\" src=\"https:\u002F\u002Fwww.youtube.com\u002Fembed\u002FETQto16U_q4?si=yrjbtCTRmQ5ceTPo\" title=\"YouTube video player\" width=\"560\">\u003C\u002Fiframe>\n\nDisclaimer\n\n_This webinar and summary are part of the FALCON (Fight Against Largescale Corruption and Organised Crime Networks) project. FALCON is funded under the European Union’s Horizon Europe Framework Program Grant Agreement ID 101121281. The Basel Institute on Governance, as an associated partner without the right to receive funds directly from the European Research Executive Agency, has received funding from the Swiss State Secretariat for Education, Research and Innovation (SERI). The contents of this summary are the sole responsibility of the authors and do not necessarily reflect the views of the European Union, the European Research Executive Agency or SERI._","2026-03-25","corruption-is-a-complex-adaptive-network-what-does-this-mean-for-anti-corruption-policy-and-practice-2945","Corruption is a complex, adaptive network. What does this mean for anti-corruption policy and practice?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Faf37ba1d-85e1-4724-ab47-4e58056330c6?width=1000&height=650&format=webp&quality=80",[],[14,15],[180,158],"Events",[182],{"tags_id":183},{"id":109,"name":110},2945,[186],"Prevention Research and Innovation",[180,158],[],[],[],"2026-04-15T22:45:18.000Z","3d9ff205-1640-4f34-b5b6-86977f51bbd6","2026-05-07T21:29:58.000Z",[195,196,197,198,199,200,201,202],1,2,3,4,5,6,7,8,"\u002Fresources\u002Fnews\u002Fcorruption-is-a-complex-adaptive-network-what-does-this-mean-for-anti-corruption-policy-and-practice-2945",{"id":205,"body":206,"status":6,"type":207,"date":208,"slug":209,"title":210,"image":211,"countries":212,"topic":215,"activity":216,"tags":217,"nid":233,"topics":234,"activities":235,"authors":236,"images":238,"websites":239,"area":22,"programme":22,"language":22,"translations":241,"translation_of":22,"user_created":39,"date_created":242,"user_updated":192,"date_updated":243,"content":244,"link":245},10509,"There’s a lot of attention to the laundering of “dirty money” – but very little about how clean money can be turned into bribes, kickbacks or payments to terrorists.\n\nTogether with David Jancsics, I examined the money-dirtying strategies at the heart of one of the world’s most dramatic corruption scandals: the _Lava Jato_ or Car Wash case. How did the multinational company Odebrecht manage to secretly channel millions in legitimately earned funds to bribe politicians and bureaucrats across the continent? Our article [_Turning Legally Obtained Resources into Illegal Payments: A Money Dirtying Scheme_](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fturning-legally-obtained-resources-illegal-payments-money-dirtying-scheme) attempts to answer this question and to explore the networks of individuals and entities that made the schemes possible.\n\nExploring the concept and practice of money dirtying could help practitioners get a more holistic view of major financial crime cases. It could also potentially lead to new ways to prevent, detect and intercept illicit financial flows.\n\n### What is “money dirtying”?\n\nWe use the term “money dirtying” to refer to the process by which clean, legitimate resources are turned into illicit payments used for corruption, the financing of terrorism and other illegal activities.\n\nThe term was originally coined to describe the mechanisms of terrorism financing in the late 1990s and early 2000s. Following the terrorist attacks of 9\u002F11, researchers worked to understand the financial structures that allowed Al-Qaeda to finance the attacks. We have repurposed the term to fit the field of corruption, but the underlying idea is the same.\n\n### What are the typical characteristics?\n\nOn the face of it, money dirtying has similar characteristics to money laundering:\n\n*   Complex, multi-layered schemes using redundant payments and fake contracts to make funds difficult to trace.\n*   The use of specialised professionals who can create sophisticated financial infrastructures and know all the tricks to evade detection.\n*   The use of informal actors such as _halawadars_ or _doleiros_ to escape regulatory radars.\n*   Often transnational, with money, resources and information shared along a cross-border network of individuals and entities.\n\n### What makes it different to money laundering?\n\nThe key differences lie in the purpose and the direction of the flow.\n\n*   Money laundering seeks to clean dirty money by reintegrating it into the legal financial system. It is a circular system, where the funds return to their point of origin.\n*   Money dirtying serves to transfer money undetected from the bribe giver to the bribe taker. It is linear.\n\nFor example, in our case study, the money took the following route:\n\n[](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2024-11\u002FUntitled.jpg)\n\nIn reality, it looked more like this:\n\n[](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2024-11\u002FUntitled%20design.png)\n\n### The Lava Jato case\n\nThe _Lava Jato_ case (Operation Car Wash) was a major judicial investigation launched in Brazil in 2009. Initially focused on money laundering and illegal activities linked to a car wash company, it quickly expanded into one of the largest corruption investigations in history. By the early 2010s, investigations and plea deals had exposed the intricate financial structures and corrupt management systems of the Odebrecht Group at the heart of a web of illicit payments in countries across the region.\n\nUnlike other cases, there is significant public information available about Lava Jato thanks to judicial investigations, journalistic work, academic studies and other reports. This allowed us to map and analyse the “money dirtying” network in detail.\n\nThe case is also an ideal case study in advanced corruption schemes. It was large, long-running and used complex, multi-layered networks that spread across the world. \n\n### Skeleton and muscles\n\nTo map the complex networks of the Odebrecht Group’s money dirtying networks we looked at the data in two ways:\n\n*   We analysed the transactions, performing a [social network analysis](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fquick-guide-4-social-network-analysis-combating-organised-crime-and-trafficking) and looking at the “skeleton” of the network – how it was shaped, where transactions centred and how they moved.\n*   At the same time, we tried to understand the _substance_ of the network. If you like, the muscles surrounding the skeleton. We read interviews and wiretaps, and looked at personal histories to understand the relationships between people in the network and how they operated together.\n\nWe then created a coherent framework of both the “skeleton” and “muscles”. This includes a description of each role and its function within the network.\n\n[](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2024-11\u002Fnew%20version.png)\n\n### So what?\n\nPaying more attention to how legitimate funds are channelled towards illegal activities can help anti-corruption practitioners to gain a more holistic view of major corruption schemes.\n\nWith the increase in internal controls and regulatory scrutiny, those that engage in corruption are forced to use more sophisticated methods than just declaring bribes as “consultancy fees”, for example. A better understanding of these methods could help inform stronger internal controls and compliance systems.\n\nThis focus also helps practitioners to see how some of the same methods – legal structures in offshore financial centres, shell companies, professional enablers, informal value transfer service providers for example – can be misused not only for money laundering but for other parts of a corruption scheme.\n\nThe research also showcases the power of social network analysis in mapping the key individuals and entities involved in transforming clean money into illicit payments. Combined with evidence of their relations and interactions, this can create a valuable source of information for both law enforcement and the development of evidence-based strategies for targeting corrupt networks.\n\n### Learn more\n\n[Organisational forms of corruption networks: the Odebrecht-Toledo case](http:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Forganisational-forms-corruption-networks-odebrecht-toledo-case)\n\n[Quick Guide 4: Social network analysis in combating organised crime and trafficking](http:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fquick-guide-4-social-network-analysis-combating-organised-crime-and-trafficking)\n\n[Research Case Study 3: Exposing the networks behind transnational corruption and money laundering schemes](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fresearch-case-3)","News","2024-11-25","money-dirtying-shining-a-light-on-how-clean-money-turns-into-bribes-2723","Money dirtying: shining a light on how clean money turns into bribes","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F04afeb59-9775-4b6c-b487-de86baa29a94?width=1000&height=650&format=webp&quality=80",[213,214],7080,7081,[14,15],[158,18],[218,222,225,229],{"tags_id":219},{"id":220,"name":221},879,"Money laundering",{"tags_id":223},{"id":52,"name":224},"Corruption prevention",{"tags_id":226},{"id":227,"name":228},818,"Anti-money laundering",{"tags_id":230},{"id":231,"name":232},973,"Corruption",2723,[186],[158,18],[237],1099,[],[240],"Main page",[],"2024-11-27T11:01:43.000Z","2026-05-07T21:29:56.000Z",[],"\u002Fresources\u002Fnews\u002Fmoney-dirtying-shining-a-light-on-how-clean-money-turns-into-bribes-2723",{"id":247,"body":248,"status":6,"type":10,"date":249,"slug":250,"title":251,"image":252,"countries":253,"topic":255,"activity":258,"tags":260,"nid":264,"topics":265,"activities":266,"authors":267,"images":269,"websites":270,"area":22,"programme":22,"language":22,"translations":271,"translation_of":22,"user_created":39,"date_created":272,"user_updated":273,"date_updated":274,"content":275,"link":276},10304,"_The B20-G20 dialogue has the potential to transform the way that both the B20 and G20 work towards a more streamlined and impactful process. But what does it take? And how do we get there?_\n\n_Insights from Scarlet Wannenwetsch, who serves as Deputy Co-Chair of the B20 Indonesia Integrity and Compliance Taskforce. The Basel Institute on Governance has been honoured to support this year’s Taskforce as both_ [_Co-Chair and Network Partner_](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fbasel-institute-serve-co-chair-and-network-partner-b20-indonesia-integrity-and-compliance-task)_. For those unfamiliar with the B20–G20 process on integrity and anti-corruption, you can learn more on the_ [_B20 and anti-corruption_](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Fb20-g20\u002F) _resource pages on the B20 Collective Action Hub._\n\nThe [Indonesian presidency](https:\u002F\u002Fb20indonesia2022.org\u002F) of the 2022 G20\u002FB20 process is wrapping up, the policy papers are in their final drafts, and we are all gearing up for the B20 and G20 Summit marathon in November 2022.\n\nAnd while it is too early to speculate on which of the integrity and anti-corruption recommendations of the B20 make their way into the G20 Leaders’ Declaration or the G20 Anti-corruption Working Group policy documents, we want to take this opportunity to spotlight an important platform that reflects the spirit of this process like no other: the [B20–G20 dialogue](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Fb20-g20).\n\n### Integrity: a topic that transcends borders and stakeholders\n\nThe difficulties faced by this year’s process, including the Covid-19 pandemic and the war in Ukraine, underscore the need to exchange, engage and work together more closely. Only in this way can we strive toward our common goals and values that are at the core of the G20-B20 community. This holds especially true for a topic that transcends borders, industry sectors and stakeholders in the way corruption does.\n\nThe need to bring together not only the B20 and G20 workstreams but at a more fundamental level its members and stakeholders to raise integrity and address common issues of corruption was also the resounding message at this year’s B20–G20 Integrity and Compliance dialogue on 18 August in Yogyakarta, Indonesia.\n\nThis is a message that has transcended the Integrity and Compliance Task Force and is being picked up by the leadership both at the B20 and G20 level. The Chair of the B20, Ms. Shinta Widjaja Kamdani (CEO of the Sintesa Group), called on all participants to:\n\n> continue to push and leverage collaboration amongst business players and governments in the years to come.\n\nRolliansyah Soemirat, Chair of G20 Indonesia Anti-corruption Working Group, echoed this sentiment when he underscored the:\n\n> importance of having strong collaboration between all the sectors and stakeholders, namely business societies, youth, think tank communities and Ministries.\n\nThis, he said, is the way to increase integrity and reduce corruption effectively.\n\n### A strong endorsement of anti-corruption Collective Action\n\nWe are pleased to see that fostering and promoting anti-corruption Collective Action for greater integrity is one of the core recommendations of this year’s B20 Integrity and Compliance policy paper.\n\nThe Integrity and Compliance Co-Chairs brought the recommendation to life during the dialogue. They shared examples and avenues for action to highlight the potential impact these kinds of Collective Action initiatives can have.\n\nLearn more about these and the other B20\u002FG20 anti-corruption priorities by watching the whole [B20-G20 dialogue on YouTube](https:\u002F\u002Fwww.youtube.com\u002Fwatch?v=avUJsyAXSaw&t=11148s).\n\n### Rotating presidency: strength or limitation?\n\nSo, it seems everyone is in agreement: We need stronger collaboration between the B20 and G20 workstreams to facilitate more multistakeholder and innovative approaches to strengthen integrity across stakeholder divides.\n\nBut how can we achieve this when each new G20\u002FB20 presidency takes over the process and makes it their own?\n\nA core strength of the G20 process is its flexibility and how it offers ownership of the process to each incoming presidency. This means it can respond to changes in the political landscape and pick up new topics as soon as they arise.\n\nThis flexibility does, however, come with certain limitations. One is the issue of continuity between cycles and the ability to streamline and build on previous discussions and established working relationships.\n\nThis perceived lack of continuity has led to periodic calls for the establishment of a permanent Secretariat or similar function, with little success to date. It could be said that the freedom for each country to define its own priorities and process overrides other considerations.\n\n### Leveraging the B20–G20 dialogue platform\n\nHow can we utilise and strengthen existing structures? A start could be to work more closely with consistently engaged stakeholders. This would help to leverage existing capacities and processes to bridge the gaps arising from the rotating presidency.\n\nIt is important to state here that although there is no permanent Secretariat, \"soft” structures and processes have developed over time that provide continuity even when the presidency changes each year. These have already demonstrated their ability to stand the test of time, as they are voluntarily carried from one presidency to the next.\n\nThe B20–G20 dialogue is one such “soft” platform that has become a staple of each annual process since its inception. Before the establishment of the [G20 Anti-corruption Working Group in 2010](https:\u002F\u002Fwww.unodc.org\u002Funodc\u002Fen\u002Fcorruption\u002Fg20-anti-corruption-resources\u002Fby-presidency.html#Canada), for example, the B20–G20 dialogue was the main way for the B20 anti-corruption workstream to connect with the G20.\n\nThe B20–G20 dialogue has taken on many different formats, but over the last years has become an annual platform for the B20 and G20 workstreams to present and inform each other on focus topics and the outcome of their policy discussions. Typically, this exchange happens after the policy papers have been finalised, a month or two before the Summits.\n\nThis has not always been the chosen format. In 2013, for example, a G20–B20 Dialogue Efficiency Taskforce was set up, which assessed and rated the efficiency of previous B20 cycles and made recommendations on how the B20 can increase its impact at the G20 level. This setup led to active and consistent engagement between the B20 and G20 throughout this cycle, but has not since been replicated.\n\nIf both the G20 and B20 sides are committed to working together more closely, as we heard again during this year’s dialogue, the B20–G20 dialogue should be the obvious platform to leverage.\n\n### One dialogue is great, but two would be better\n\nWhile it’s an important achievement that this type of exchange between the B20 and G20 workstreams has become institutionalised, it does beg the question whether the current set-up best serves the process.\n\nHaving only one dialogue per cycle doesn’t allow for constructive dialogue over time, or the identification of common areas of interest and potential for collaboration through each G20\u002FB20 cycle. Under the current modus operandi, each B20–G20 dialogue is a one-off event for each presidency. The next cycle will bring together a different B20 Secretariat, a new G20 ACWG Chairperson, and new focus topics and recommendations to present and discuss.\n\nThis setup makes it difficult to build strong working relationships and facilitate ongoing exchange and alignment between the B20 and G20 anti-corruption workstreams.\n\nSetting up a two-part B20–G20 dialogue for each cycle could be an easy way to strengthen and reinvigorate the dialogue. It would make it a more constructive and impactful engagement format without adding new bureaucratic structures.\n\nConsidering the timing of the dialogues can also be an effective tool to increase its potential impact. For example, a good time for the first dialogue could be between the first and second iterations of the draft policy papers. That gives both the G20 and B20 workstreams enough time to internally build consensus. It allows for a productive discussion between the workstreams in the early stages of the process, where alignment is still possible. \n\nIf the second dialogue remains in the same format and timing as currently, it can continue as an important exchange platform on the core policy recommendations that are being developed each year. But it would have the added benefit of being able to build and reflect on the first dialogue and outcomes as well.\n\nThis approach would allow both the G20 and B20 processes to identify areas for collaboration throughout the process and to assess engagement and alignment throughout each cycle.\n\n### How the OECD and other international organisations can help\n\nInternational organisations that work and support both the G20 and B20 processes could take on more of an active role. They could help identify areas for collaboration and facilitate those discussions on an ongoing basis to help break down silos and bridge communication gaps.\n\nThe OECD has played a particularly important role in supporting the G20\u002FB20 process since its inception. It has even been described as taking on some unofficial Secretariat duties within the G20\u002FB20 process. This positions the OECD well to facilitate more impactful collaboration between the G20\u002FB20 process. \n\n### Leveraging existing resources and knowledge\n\nEach G20\u002FB20 presidency has the opportunity to put its own stamp on their process. But it also has the opportunity to benefit and learn from work done in previous cycles.\n\nFor the Integrity and Compliance Taskforce, this includes B20-mandated resources such as the [B20 Collective Action Hub](https:\u002F\u002Fcollective-action.com\u002F). Developed and maintained by the Basel Institute on Governance, this free website offers resources and guidance for companies, governments and civil society interested in developing and engaging in anti-corruption Collective Action.\n\nThe B20 Collective Action Hub also provides a [repository](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Fb20-g20) of all B20 Integrity and Compliance Taskforce documents since its inception, plus [analysis](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fg20s-responsiveness-b20-anti-corruption-recommendations-2010-2017-part-i-baseline) on the uptake of recommendations and impact of the process.\n\nIn addition to existing resources, the consistently engaged members in the taskforces also have a lot of knowledge to bring to the table regarding what works and what doesn’t work so well.\n\nIn the context of the anti-corruption work of the B20, engaged taskforce members have set up regular meetings to discuss how to better engage and support the process. In 2021, this informal group published some of the [key lessons learned](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2021-09\u002FB20%20Integrity%20%26%20Compliance_key%20suggestions_two%20pager.pdf) over the last couple of years.\n\n### The way forward: Gradual improvements\n\nWe don’t have to reinvent the wheel or add new processes to make the G20\u002FB20 process more impactful. Sometimes a coordinated effort of minor tweaks can also have significant results.\n\nAs we look from Indonesia to India, which will take over the presidency in 2023, we hope to see the core message from this year’s B20–G20 Integrity and Compliance dialogue – more collaboration and engagement between the G20 and B20 – translated into practice.\n\nA final word of thanks to the Indonesian B20 Integrity and Compliance Taskforce leadership from Gemma Aiolfi, Head of Collective Action and Compliance, at the Basel Institute:\n\n> The Basel Institute on Governance was honoured to serve as Network Partner and Co-Chair of this year's B20 Integrity and Compliance Taskforce. I want to give a special thanks to the Taskforce leadership for their dedication to a process that built on engaging the taskforce members to work together to co-develop actionable and impactful policy recommendations. We very much hope to see these translated into action in the near future.","2022-09-07","improving-b20g20-engagement-insights-from-the-indonesian-b20g20-dialogue-on-integrity-and-compliance-2280","Improving B20–G20 engagement – insights from the Indonesian B20–G20 dialogue on Integrity and Compliance ","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F248a9523-9102-44b4-882f-2a9f428a9842?width=1000&height=650&format=webp&quality=80",[254],7220,[256,257],"Collective Action","Private Sector",[180,18,259],"Partnerships",[261],{"tags_id":262},{"id":263,"name":256},909,2280,[256,257],[180,18,259],[268],1160,[],[240,256],[],"2022-09-07T08:57:57.000Z","dfef11db-1bc6-47e9-a61d-93443995484b","2026-05-08T21:11:06.000Z",[],"\u002Fresources\u002Fnews\u002Fimproving-b20g20-engagement-insights-from-the-indonesian-b20g20-dialogue-on-integrity-and-compliance-2280",{"id":278,"body":279,"status":6,"type":10,"date":280,"slug":281,"title":282,"image":283,"countries":284,"topic":286,"activity":287,"tags":289,"nid":298,"topics":299,"activities":300,"authors":301,"images":303,"websites":304,"area":22,"programme":22,"language":22,"translations":305,"translation_of":22,"user_created":39,"date_created":306,"user_updated":273,"date_updated":307,"content":308,"link":309},10531,"> Environmental destruction and corruption are two of the greatest global challenges of our time. Both are closely interrelated…\n\nThis was the starting point of a [high-level meeting](https:\u002F\u002Fwww.regierung.li\u002Fmedienportal-medium\u002F16182\u002F232910\u002F0\u002Fmedienmitteilung) hosted by the Principality of Liechtenstein. Dominique Hasler and Panagiotis Potolidis of the Ministry of Foreign Affairs led the discussions together with Peter Maurer, President of the Basel Institute on Governance, and Juhani Grossmann, Head of our Green Corruption Programme.\n\nThe participants took a fresh look at the interconnected threats posed by corruption, environmental degradation and climate change, and at our Green Corruption programme's renewed focus on climate and the energy transition.\n\nIn his address, Peter Maurer also reflected on the need for bold collective action across borders to tackle these key global challenges. Our [Green Corruption programme](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption) – made possible through core funding from Liechtenstein – is a powerful example of how international partnerships and innovative solutions can make a real difference.\n\nAn edited excerpt of Peter Maurer’s speech follows:\n\n> Building on 20 years of global and national experience in the fight against corruption, we at the Basel Institute have had the opportunity over the last seven years to look more closely at the interfaces between corruption and the environment. In our Green Corruption programme we are working with partners across four continents, supporting both enforcement and corruption prevention.\n> \n> While the political focus on environmental issues and the protection of natural resources in the past has brought many positive results, we have also seen how corruption and financial crime have become drivers of environmental problems:\n> \n> *   Standards are not adhered to.\n> *   Illegal trade and financial activities lead to new forms of exploitation of nature.\n> *   Regulatory authorities can be influenced, supervisory and enforcement authorities bribed into inaction.\n> *   Climate legislation is manipulated.\n> \n> And wherever a lot of new funds flow in – like climate finance or renewable energy projects – there are direct and indirect risks of abuse.\n> \n> Integrity and anti-corruption are crucial in effectively tackling the climate and environmental crisis. But the relevant authorities, such as law enforcement and environmental protection agencies, cooperate very little, either with each other or with other stakeholders.\n> \n> The good news is: There are encouraging examples. Our broad geographical focus allows us to take stock and make concrete suggestions for the future.\n> \n> ### Where corruption and environmental issues converge\n> \n> Our Green Corruption team is intensifying efforts in key areas where we see corruption undermining our collective ability to tackle the climate crisis: the energy transition and climate finance.\n> \n> Energy transition\n> \n> Renewable energy is essential to address climate change. The renewables sector comes with new regulations, financial flows, processes, actors. The new settings also mean new integrity risks to address.\n> \n> In addition, renewable energies depend on the mining of critical raw materials. Lithium or nickel, for example, are used in the production of batteries or renewable power generation in turbines or solar modules.\n> \n> There is growing long-term demand for the mining of these minerals. The increasing competition for these resources invites new players, such as technology companies and commodity traders. And this new rush is accompanied by numerous corruption scandals.\n> \n> Despite the high risks, very few safeguards are put in place to prevent corruption from undermining the effective, consensual and sustainable extraction of critical materials.\n> \n> In the next phase of our Green Corruption programme, we are starting detailed investigations into corruption risks, including with regard to lithium in Ukraine and nickel in Indonesia. These studies will also help us to support government authorities in strengthening their internal controls and risk mitigation measures.\n> \n> Climate finance\n> \n> We all know today that tackling the effects of climate change will require enormous investments. These are necessary to a) slow down climate change, and b) prepare and adapt to the unavoidable effects of the changing climate.\n> \n> Despite these two strategies being subject to political volatility, the basic facts make this an even stronger growth area in the medium to long term. The UN puts the cost of tackling climate change at USD 5.5 trillion a year. This is more than the combined GDP of Germany and Switzerland. Very substantial financial resources are already being invested in mitigating and adapting to climate change.\n> \n> As money is tight and climate change compete with other financial priorities like defence and migration, we need to get more out of existing funds. That means ensuring that they are not lost to corruption.\n> \n> Unfortunately, our partners at Transparency International are [documenting](https:\u002F\u002Fwww.transparency.org\u002Fen\u002Fpublications\u002Fclimate-and-corruption-atlas-lessons-from-real-cases) a growing number of corruption incidents in climate initiatives: Bribery to secure land for carbon capture; permits and licences for infrastructure that can only be obtained through corruption; bribes for environmental impact assessments; corruption in the certification and sale of carbon credits.\n> \n> There are multiple, complex reasons for corruption being present in the responses to climate change. These range from weak internal controls and excessive decision-making powers at environmental regulatory authorities to poorly designed and safeguarded carbon offsetting projects.\n> \n> Overall, our efforts aim to boost cooperation between different actors to help integrity standards and better practice to take hold. There is a need for greater understanding of systemic issues, more effective training and better legal, political and institutional guidance.\n> \n> ### Seeking answers\n> \n> The international community is faced with a number of pertinent questions:\n> \n> *   How can we use the money we have to make an impact on important problems relating to the environment, climate change, biodiversity, water and food?\n> *   How can we build on market forces and support competitive companies that contribute to the necessary energy and economic policy changes?\n> *   How can we make access to critical materials transparent so that we can better utilise them to bring about environmental and energy policy change globally?\n> *   How can we better harmonise regulatory measures and our own initiatives?\n> \n> Finding and implementing answers to these questions is challenging, not least in the face of geopolitical volatility and transactional politics. But it also presents opportunities for players of all sizes, including small and medium-sized countries, to show leadership, push for innovative solutions and get involved in tangible ways.\n> \n> The Principality of Liechtenstein is doing just that. Its support of initiatives at the intersection of corruption and the environment such as our Green Corruption programme goes a long way.","2025-02-04","peter-maurer-on-new-priorities-in-addressing-corruption-environment-and-climate-challenges-2762","Peter Maurer on new priorities in addressing corruption, environment and climate challenges","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F256dabda-b6d7-4665-a094-cf8ddf9f4ff8?width=1000&height=650&format=webp&quality=80",[285],7072,[156],[180,18,288],"Presentations",[290,294],{"tags_id":291},{"id":292,"name":293},1303,"Environment",{"tags_id":295},{"id":296,"name":297},804,"Natural resources",2762,[156],[180,18,288],[302],1091,[],[240],[],"2025-02-04T17:01:50.000Z","2026-05-08T21:17:39.000Z",[],"\u002Fresources\u002Fnews\u002Fpeter-maurer-on-new-priorities-in-addressing-corruption-environment-and-climate-challenges-2762",{"id":311,"body":312,"status":6,"type":207,"date":313,"slug":314,"title":315,"image":316,"countries":317,"topic":318,"activity":319,"tags":320,"nid":334,"topics":335,"activities":336,"authors":337,"images":338,"websites":339,"area":22,"programme":22,"language":22,"translations":340,"translation_of":22,"user_created":39,"date_created":341,"user_updated":40,"date_updated":342,"content":343,"link":344},9621,"Companies dealing with metals and minerals cannot avoid corruption risks, which plague practically every extractive sector at every phase of development, every country and every stage of the supply chain. Both industrial and artisanal mining are vulnerable, though in different ways.\n\nThe risks are set to grow as demand balloons for metals such as cobalt and copper that are needed for the green energy transition. The impact of corruption on a producing country’s development is deep and systemic. And it opens the gates to a flood of other risks, from environmental degradation to human rights abuses and conflict financing. How to deal with it?\n\nThat was the question at the heart of a virtual discussion on transparency and accountability in mineral supply chains hosted by the [OECD](http:\u002F\u002Fwww.oecd.org\u002F) and [Green Corruption](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption) team of the Basel Institute on Governance on 23 February 2021. Attended by 120+ participants, the event brought together expert perspectives from standard-setters, NGOs and industry.\n\n### How companies can protect themselves and their supply chains\n\nSince its adoption in 2011, the [OECD _Due Diligence Guidance for Responsible Supply Chains of Minerals_](https:\u002F\u002Fwww.oecd.org\u002Fcorporate\u002Fmne\u002Fmining.htm) – now in its third edition – has been the gold standard in recommendations to identify and mitigate supply chain risks including corruption. Trade associations with serious responsible sourcing commitments have based their own standards on these guidelines. One example is the [responsible sourcing standard of the London Metal Exchange](https:\u002F\u002Fwww.lme.com\u002Fen-GB\u002FAbout\u002FResponsibility\u002FResponsible-sourcing), which consulted widely to adapt the OECD guidance to industry specificities, as well as to the growing legal requirements on anti-corruption and human rights due diligence.\n\nThe OECD’s forthcoming [FAQs](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fwelcoming-oecds-new-faqs-corruption-risks-mineral-supply-chains), which will be presented at the [Forum on Responsible Mineral Supply Chains](https:\u002F\u002Fmneguidelines.oecd.org\u002Fforum-responsible-mineral-supply-chains.htm) on April 26th, are designed to help companies use the OECD due diligence framework to address corruption risks. The publication covers 12 questions and answers on practical issues such as what to check for when conducting corruption risk assessments on high-risk suppliers and what to do if risks are identified at any point in the supply chain.\n\nPanellists converged around the idea that protecting against corruption risks needs proactive management. This may include:\n\n*   understanding vulnerabilities and identifying red flags with the help of NGOs, open-source information and OECD guidance (for example on [artisanal mining](https:\u002F\u002Fwww.oecd.org\u002Finvestment\u002FFAQ_Sourcing-Gold-from-ASM-Miners.pdf), [child labour](https:\u002F\u002Fmneguidelines.oecd.org\u002Fchild-labour-risks-in-the-minerals-supply-chain.htm) or [cobalt and copper sourcing in the DRC](https:\u002F\u002Fmneguidelines.oecd.org\u002Finterconnected-supply-chains-a-comprehensive-look-at-due-diligence-challenges-and-opportunities-sourcing-cobalt-and-copper-from-the-drc.htm));\n*   following the money, by conducting targeted financial audits and analysing payments to governments disclosed in [Extractive Industries Transparency Initiative](https:\u002F\u002Feiti.org\u002F) (EITI) reports;\n*   active reporting on corruption risks throughout the supply chain and not waiting for hard evidence or convictions before acting. The biggest corruption risk is before a conviction, not after, as the case of [Glencore and corruption risks in the Congo](https:\u002F\u002Fresourcematters.org\u002Fwp-content\u002Fuploads\u002F2019\u002F04\u002FResourceMatters-SeeNoEvil-CobaltCorruptionRisks-Apr-2019.pdf) illustrates;\n*   engaging with other companies and stakeholders through [Collective Action](https:\u002F\u002Fbaselgovernance.org\u002Fcollective-action), in order to achieve stronger leverage and solve shared corruption and due diligence challenges;\n*   the inclusion of specific [anti-corruption clauses](https:\u002F\u002Ficcwbo.org\u002Fpublication\u002Ficc-anti-corruption-clause\u002F) in contracts that may give buyers the right to audit revenue flows that raise concerns;\n*   systems to improve traceability and transparency, which may include [blockchain technologies](http:\u002F\u002Fmneguidelines.oecd.org\u002Fis-there-a-role-for-blockchain-in-responsible-supply-chains.htm) – although companies should keep in mind that there is no simple technological fix.\n\n### How countries can cooperate to improve standards in mining\n\nCorruption in mining has much in common with corruption in forestry and other natural resource sectors. Studies in Indonesia and elsewhere show the same old tricks: bribery, embezzlement, money laundering, tax fraud, undisclosed royalty payments and non-compliance with regulations.\n\nThere is widespread evidence of rampant petty corruption on the ground, in part due to the use of intermediaries and high levels of discretion of local officials, and of obscene grand corruption schemes between political and business elites – the [Gertler](https:\u002F\u002Fwww.nytimes.com\u002F2021\u002F02\u002F21\u002Fus\u002Fpolitics\u002Fdan-gertler-sanctions.html) and [Steinmetz](https:\u002F\u002Fwww.swissinfo.ch\u002Feng\u002Fswiss-court-hands-diamond-magnate-five-year-prison-sentence-\u002F46309514) cases being only the most high-profile.\n\nSuccessful investigations and prosecutions are few and far between (why, is something the Basel Institute is [working to better understand](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fanti-corruption-approaches-protect-biodiversity-launch-new-green-corruption-collaboration-tnrc)). Prevention is key, and this needs increased cooperation in particular:\n\n*   between the public and private sectors, especially in proactive information-sharing between companies and financial institutions with law enforcement;\n*   between countries, through a carrot-and-stick combination of international pressure, investment from countries that value transparency and accountability, and support for strengthening legal frameworks and capacity;\n*   between law enforcement agencies, as money laundering schemes cross many borders and green corruption investigations often arise from information transmitted spontaneously by foreign law enforcement counterparts;\n*   with local civil society representatives that dare to speak up against corruption in their country, because ultimately change to a deeply corrupt political context needs to come from within.\n\nA basic step to improve international cooperation and harmonisation of standards – and avoid the “race to the bottom” in environmental, human rights and anti-corruption issues – is to implement the OECD Due Diligence Guidance into national and regional policies, as China did in 2015. There are concerns that the European Union’s proposed update to the [2006 Batteries Directive](https:\u002F\u002Fec.europa.eu\u002Fcommission\u002Fpresscorner\u002Fdetail\u002Fen\u002Fip_20_2312) does not yet specifically include corruption risks highlighted in the Guidance – something which, as this panel discussion showed, is absolutely crucial to the integrity of mineral supply chains in all senses.\n\n### With thanks to our panel\n\n*   Louis Maréchal, Sector Lead, Minerals & Extractives, Centre for Responsible Business Conduct, OECD (moderator)\n*   Laode Syarif, Executive Director, Kemitraan and Former Vice Chairman, Corruption Eradication Commission of the Republic of Indonesia\n*   Elisabeth Caesens, Director, Resource Matters\n*   Hugo Brodie, Vice President - Sustainability, London Metal Exchange\n*   Luca Maiotti, Policy Analyst, Minerals Team, Centre for Responsible Business Conduct, OECD\n\nLearn more about the OECD-Basel Institute [Corrupting the environment series](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption\u002Fcorrupting-environment) and register now for upcoming events on [following the money](https:\u002F\u002Fbaselgovernance.zoom.us\u002Fwebinar\u002Fregister\u002FWN_Pa5XVdTNQ-2v15BhFlOChg) (17 March) and applying [behavioural insights](https:\u002F\u002Fbaselgovernance.zoom.us\u002Fwebinar\u002Fregister\u002FWN_UNofuB6jRI-VLe43E_IH1A) to fight green corruption (14 April).","2021-03-03","protecting-mineral-supply-chains-from-green-corruption-risks-1978","Protecting mineral supply chains from green corruption risks","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fb67b0e87-6629-4f91-9ed9-4435fd1ba467?width=1000&height=650&format=webp&quality=80",[],[156],[180,288,259],[321,323,327,331],{"tags_id":322},{"id":292,"name":293},{"tags_id":324},{"id":325,"name":326},1236,"Compliance",{"tags_id":328},{"id":329,"name":330},830,"Business integrity",{"tags_id":332},{"id":164,"name":333},"Sustainability",1978,[156],[180,288,259],[],[],[240],[],"2022-05-26T22:53:23.000Z","2025-08-31T23:14:40.000Z",[],"\u002Fresources\u002Fnews\u002Fprotecting-mineral-supply-chains-from-green-corruption-risks-1978",{"id":346,"body":347,"status":6,"type":10,"date":348,"slug":349,"title":350,"image":351,"countries":352,"topic":354,"activity":357,"tags":359,"nid":370,"topics":371,"activities":373,"authors":374,"images":377,"websites":378,"area":22,"programme":22,"language":22,"translations":379,"translation_of":22,"user_created":39,"date_created":380,"user_updated":192,"date_updated":381,"content":382,"link":383},10305,"“Money laundering is a significant problem requiring strong and decisive action,” concluded Honourable Austin F. Cullen in the final report of his widely discussed [_Commission of Inquiry into Money Laundering in British Columbia_](https:\u002F\u002Fcullencommission.ca\u002F) in June 2022_._\n\nDespite the billions of dollars of illicit funds estimated to be laundered in British Columbia alone each year, the Commission’s final report found that the “value of assets seized through the asset forfeiture system in British Columbia is shockingly low.” The “failure to vigorously pursue these assets”, the report says, is “a missed opportunity to disrupt and deter the activities of organized crime groups and others involved in serious criminality.”\n\nThe Report outlines 101 recommendations to reduce the amount of illicit funds flowing into British Columbia, and to more effectively seize those that do. The 101st of these outlines that the Province should:\n\n> …proceed with its plan to develop an unexplained wealth order regime in British Columbia.\n\nThe Commission recommends the UK’s controversial unexplained wealth order (UWO) as a model. If implemented, this mechanism would empower the British Columbian Civil Forfeiture Office to seek court orders that obligate a person to provide information on how they legally acquired assets suspected of being connected to criminal activity.\n\nIf the person fails to comply with the order, a presumption would be made in a separate civil recovery action that the assets are criminal proceeds – potentially subjecting them to forfeiture – despite the fact that no one has been convicted of a crime.\n\n### What would a UWO mean for British Columbia?\n\nAs part of a collaboration between the Basel Institute on Governance and the Vancouver Anti-Corruption Institute, we have developed a [Working Paper](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-41) that analyses the feasibility of Recommendation 101.\n\nHow would a UK-style UWO support efforts to investigate financial crimes and recover illicit proceeds in British Columbia – or indeed in the rest of Canada? Would this mechanism be too powerful, or not powerful enough? What models from other countries could also be emulated? And what constitutional and charter factors should legislators consider to ensure the UWO has the best chance of success?\n\nOur Working Paper explores these issues, and brings in examples from the UK and other jurisdictions that have implemented some form of unexplained wealth mechanism to date.\n\nIn brief, we are doubtful that a carbon copy of the original UK UWO would result in the identification and recovery of substantial amounts of illicit funds in British Columbia, particularly given the limited success of the UK’s mechanism so far.\n\nTo bolster the chances of success however, lawmakers could adapt certain elements of this model to the British Columbian context, and also consider adopting elements from other legislative models present in Australian and Ireland.\n\n### … and beyond?\n\nAdditionally, due to the fact that money can be laundered with ease across both provincial and international borders, we believe policy makers should couple any British Columbian initiatives to counter money laundering with wider-reaching initiatives, particularly those recommended by the Commission.\n\nEnhancing dialogue between Canada’s provinces would, for example, help to develop more consistent and coordinated approaches to both UWOs and civil forfeiture mechanisms more generally. At the federal level, it would be useful to explore the feasibility of introducing illicit wealth provisions in the criminal law, to bring the country into line with international anti-corruption treaties, or to include UWO provisions into existing legislation such as the Special Economic Measures Act or the Magnitsky Act.\n\nThe findings of the Commission are clear. British Columbia – and Canada – need tools and powers to help uphold the rule of law and prevent the detrimental impacts of organised crime and money laundering on citizens.\n\nAs stated in the report,\n\n> _“…there can be few things more destructive to a community’s sense of well-being than a governing regime that fails to resist those whose opportunities are unfairly gained at the expense of others.”_\n\nIt is therefore essential that government take decisive action to counter this, including through the introduction of new and stronger mechanisms to target proceeds of crime.\n\n### More\n\n*   [Download the Working Paper](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-41).\n*   The collaboration was facilitated by the [International Academy of Financial Crime Litigators](https:\u002F\u002Ffinancialcrimelitigators.org\u002F), an independent, non-partisan global centre that shapes and advances financial crime litigation practices for the future. The Academy’s co-founder Lincoln Caylor, Partner at Canadian law firm Bennett Jones, has written the foreword.\n*   Andrew Dornbierer’s open-access book _Illicit Enrichment: A Guide to Laws Targeting Unexplained Wealth_, was published in open-access format in 2021 by the Basel Institute on Governance and is available in English, French and Spanish. See [illicitenrichment.baselgovernance.org](https:\u002F\u002Fillicitenrichment.baselgovernance.org\u002F) or order the paperback via Amazon at cost price.","2022-10-03","targeting-unexplained-wealth-in-british-columbia-and-beyond-new-analysis-2287","Targeting unexplained wealth in British Columbia and beyond – new analysis","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F8f54540c-3a61-4082-ad8c-4004793c238b?width=1000&height=650&format=webp&quality=80",[353],7219,[355,356],"Anti-Money Laundering","Asset Recovery",[158,358,18],"Reports",[360,364,366],{"tags_id":361},{"id":362,"name":363},821,"Unexplained wealth",{"tags_id":365},{"id":227,"name":228},{"tags_id":367},{"id":368,"name":369},1215,"Illicit financial flows",2287,[355,372],"Asset Recovery and Enforcement",[158,358,18],[375,376],1158,1159,[],[240],[],"2022-10-03T16:01:29.000Z","2026-05-29T22:22:23.000Z",[],"\u002Fresources\u002Fnews\u002Ftargeting-unexplained-wealth-in-british-columbia-and-beyond-new-analysis-2287",{"id":385,"body":386,"status":6,"type":10,"date":387,"slug":388,"title":389,"image":390,"countries":391,"topic":392,"activity":393,"tags":394,"nid":395,"topics":396,"activities":398,"authors":399,"images":401,"websites":402,"area":22,"programme":22,"language":22,"translations":403,"translation_of":22,"user_created":39,"date_created":404,"user_updated":192,"date_updated":405,"content":406,"link":407},9759,"Mark Pieth, Professor Emeritus of the University of Basel President of the Board of the Basel Institute on Governance, offers an insight into the risks of human rights and environmental harms in gold supply chains. \n\nWhere are the risks and responsibilities? Collective Action with gold refineries, suppliers and other stakeholders, he concludes, could help ensure more responsible and sustainable sourcing of gold.\n\n### What is gold laundering?\n\nOn its way from the ground to your wedding ring or mobile phone, gold passes through a chain of transactions and transformations. It is traded, collated, processed, shipped or smuggled across borders – all multiple times by different actors - and then refined. \n\nOne of the challenges caused by the complexity of supply chains is that the gold we buy is easily disconnected from anything criminal or unethical that may have happened in the past. The trading of gold can therefore be misused in similar ways that criminals use complex financial transactions to obscure the money’s origins in crime and corruption.\n\n### What are potential risks in gold supply chains?\n\nEnvironmental risks in the gold industry range from [deforestation](https:\u002F\u002Fedition.cnn.com\u002F2019\u002F02\u002F08\u002Fworld\u002Fgold-mining-deforestation-peru-record-levels-trnd\u002Findex.html) to contamination of land, air and water with [mercury](https:\u002F\u002Fwww.wired.com\u002Fstory\u002Fmercury-poisoning-gold-mines\u002F) and [cyanide](https:\u002F\u002Fwww.ncbi.nlm.nih.gov\u002Fpubmed\u002F15369321). \n\nWhen mines are decommissioned, there is a risk of [acid, radioactive water](https:\u002F\u002Fwww.earthmagazine.org\u002Farticle\u002Fall-glitters-acid-mine-drainage-toxic-legacy-gold-mining-south-africa) seeping out and contaminating the local area. All too frequently, there are also [accidents](https:\u002F\u002Fwww.mining-technology.com\u002Ffeatures\u002Ffeatureshould-cyanide-still-be-used-in-modern-day-mining-4809245\u002F) involving collapsed or leaking chemical pools. [Profits from illegal gold mining](https:\u002F\u002Fwww.miamiherald.com\u002Fnews\u002Flocal\u002Fcommunity\u002Fmiami-dade\u002Farticle194187699.html) can be higher than those from drug trafficking. Gold is known to have fuelled serious conflict, for example in the [Democratic Republic of the Congo](https:\u002F\u002Fthesentry.org\u002Freports\u002Fthe-golden-laundromat\u002F) and [Sudan](https:\u002F\u002Fwww.reuters.com\u002Farticle\u002Fus-sudan-gold-exclusive\u002Fexclusive-sudan-militia-leader-grew-rich-by-selling-gold-idUSKBN1Y01DQ). \n\nGold has also been used to fund [violent organised crime](https:\u002F\u002Fwww.theguardian.com\u002Fglobal-development\u002F2016\u002Faug\u002F16\u002Fillegal-mines-local-mafia-take-shine-off-latin-american-gold-peru), in particular in Latin America. \n\nAn estimated one million children work illegally in the mining industry, from [underwater gold mining](https:\u002F\u002Fwww.hrw.org\u002Freport\u002F2015\u002F09\u002F29\u002Fwhat-if-something-went-wrong\u002Fhazardous-child-labor-small-scale-gold-mining) in the Philippines to digging and panning amid heavy dust and mercury, for example in [Tanzania](https:\u002F\u002Fwww.reuters.com\u002Farticle\u002Fus-tanzania-mining-children-feature\u002Ftanzania-struggles-to-end-child-labor-from-the-lure-of-gold-idUSKBN176007) and [Uganda](https:\u002F\u002Fwww.theguardian.com\u002Fglobal-development\u002F2016\u002Fmay\u002F20\u002Fchild-labour-uganda-gold-mines-silence-far-from-golden).  \n\nAnother potential risk related to all types of mining is the displacement of indigenous communities. This can happen after governments try to [attract foreign investment by granting mining licences](https:\u002F\u002Fearthworks.org\u002Fstories\u002Fwassa_ghana\u002F) or simply through [corruption and intimidation](https:\u002F\u002Fwww.scmp.com\u002Fnews\u002Fworld\u002Fafrica\u002Farticle\u002F2142852\u002Fchinese-gold-mining-brings-killings-land-grabs-and-corruption).\n\n### Strong incentives to mitigate the risks\n\nAside from laws on responsible business conduct and conflict minerals, the gold industry is mostly self-regulated. \n\nCompanies may choose to commit to voluntary standards developed by industry associations including the [LBMA](http:\u002F\u002Fwww.lbma.org.uk\u002Fresponsible-sourcing), [Responsible Jewellery Council](https:\u002F\u002Fwww.responsiblejewellery.com\u002F) and [World Gold Council](https:\u002F\u002Fwww.gold.org\u002Fwhat-we-do). \n\nThis voluntary system relies on third-party audits and is not enforced by law. However, there are strong non-legal incentives to mitigate the risks in gold supply chains. \n\nThanks to the work of investigative journalists and NGOs such as Human Rights Watch and Public Eye, awareness of the issues is growing fast. Younger generations are embracing ethical consumerism and demanding products that haven’t harmed the planet or its people. \n\nSome jewellers and watchmakers, such as [Chopard](https:\u002F\u002Fwww.chopard.com\u002Fintl\u002Fresponsible-sourcing) and A. Favre & Fils, whose owner Laurent Favre is a founding member of the [Swiss Better Gold Association](https:\u002F\u002Fwww.swissbettergold.ch\u002F), have started to pledge that they will only source gold from certified “green” or “ethical” sources. [Investors are also increasingly attentive to the environmental, social and governance risks](https:\u002F\u002Fwww.economist.com\u002Fbusiness\u002F2020\u002F02\u002F06\u002Fgold-companies-try-to-restore-their-sparkle) of the gold trade. \n\nIn my book _Gold Laundering_ I highlight the role of refineries, particularly in Switzerland, where most of the world’s gold is refined. This is not because the refineries are involved in illegal activities, but because they are located at a critical point in the gold supply chain. After the gold has been refined, it is almost impossible to trace its true origin. \n\nThis makes gold refineries potentially powerful players in efforts to ensure that gold supply chains are as clean as possible.\n\n### Spot-cleaning is not a solution\n\nWhen companies act alone to escape a common problem, their actions may have unforeseen and potentially negative consequences for others and in the long term. \n\nAn example is the action of one Swiss refinery that, with the aim of ensuring a more traceable and transparent gold supply chain, [imposed a blanket ban](https:\u002F\u002Fwww.swissinfo.ch\u002Feng\u002Fcompliance-costs_swiss-gold-refinery-turns-back-on-artisanal-miners\u002F45036052) on all gold from small-scale miners. \n\n[Boycotting small-scale mining](https:\u002F\u002Fwww.swissinfo.ch\u002Feng\u002Fopinion_metalor--mark-pieth-gold\u002F45037966), however, will harm and not help the estimated 100 million people worldwide who rely on it for their livelihoods. It is also not an action that will help the industry or consumers concerned about human rights. \n\nSmall-scale mining contributes around [20 percent of the world’s newly mined gold](https:\u002F\u002Fwww.worldbank.org\u002Fen\u002Ftopic\u002Fextractiveindustries\u002Fbrief\u002Fartisanal-and-small-scale-mining) and large-scale gold mining is not risk-free.\n\n### Collective Action: a golden opportunity\n\nBy coming together in [Collective Action](https:\u002F\u002Fwww.baselgovernance.org\u002Fcollective-action), major players in the gold refining sector and other stakeholders can find real, practical solutions to some of the risks and problems I have listed above. \n\nHow about this as a first step? Most stakeholders agree on the urgent need to strengthen the third-party audits that are supposed to enforce the system of self-regulation. The OECD and others have criticised these audits as weak, leaving the whole approach of industry self-regulation open to question. \n\nOther areas of potential collaboration and support could be technologies to eliminate the use of mercury or blockchain technologies to increase the transparency of supply chains. Developing common due diligence standards and processes to lighten the burden on legitimate gold traders, and help flag bogus ones, could be another. \n\nMany such useful efforts are already underway by different actors in different parts of the world. Coming together will give them the critical mass they need to succeed.\n\n### A pathway to responsible sourcing\n\nEnsuring that gold supply chains are as clean as possible – and demonstrating this to consumers – will take time and effort. If there were easy answers, we would have them by now. \n\nThere are also clearly limits to what the private sector can do alone. Collective Action initiatives by refineries and mining companies must complement, and be complemented by, concerted efforts by governments such as tighter regulations, stronger customs checks and enforcement against organised crime. NGOs and civil society organisations still have an important part to play. \n\nAt the end of the day, “laundering” gold through tangled supply chains doesn’t wash the risks away but makes them harder to identify and mitigate. Collective Action can help to bring the risks and problems to light and find ways to truly clean them up, so we can wear our jewellery and use our phones with a shining conscience.\n\n### Find out more\n\n*   The [Basel Gold Day](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fbasel-gold-day-virtual-conference-gold-supply-chains-9-october) workshop on 9 October 2020 will gather gold industry leaders and experts to explore \"How to obtain clean gold: the consumer perspective\".\n*   My book on Gold Laundering was published in 2019 in English ([_Gold Laundering_](https:\u002F\u002Fwww.baselgovernance.org\u002Fpublications\u002Fgold-laundering-dirty-secrets-gold-trade-and-how-clean)) and German ([_Goldwäsche_](https:\u002F\u002Fwww.baselgovernance.org\u002Fpublications\u002Fgoldwasche-die-schmutzigen-geheimnisse-des-goldhandels)) by Salis Verlag.\n*   [Download a PDF of this quick guide in English, Spanish and French](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Fpublications\u002F1866).","2020-03-02","mark-pieths-quick-guide-to-gold-laundering-1094","Mark Pieth’s quick guide to gold laundering","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F801af88b-814d-4aa1-9261-53d6a24ef59d?width=1000&height=650&format=webp&quality=80",[],[355,256,326],[18],[],1094,[355,256,397],"Business Integrity Ethics and Compliance",[18],[400],860,[],[240,256],[],"2022-05-26T22:55:17.000Z","2026-05-29T22:21:54.000Z",[],"\u002Fresources\u002Fnews\u002Fmark-pieths-quick-guide-to-gold-laundering-1094",{"id":409,"body":410,"status":6,"type":207,"date":411,"slug":412,"title":413,"image":414,"countries":415,"topic":416,"activity":417,"tags":418,"nid":421,"topics":422,"activities":423,"authors":424,"images":425,"websites":426,"area":22,"programme":22,"language":22,"translations":427,"translation_of":22,"user_created":39,"date_created":428,"user_updated":40,"date_updated":342,"content":429,"link":430},9579,"The sixth event in the [Corrupting the Environment](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption\u002Fcorrupting-environment) webinar series discussed waste trafficking, a topic that receives little attention despite generating significant criminal proceeds (estimates suggest up to USD 12 billion per year). In addition to the financial costs, waste trafficking has enormous impacts for the environment, including from pollution or degradation, and inhibits development by fuelling corruption and poverty in some countries.  \n\nCo-hosted on July 1 by the OECD and the Basel Institute’s Green Corruption team, the event featured speakers from the Financial Action Task Force (FATF) and the Indonesian Ministry of Environment and Forestry, plus two international experts on environmental enforcement and corruption.\n\nA particular focus was the [FATF report on _Money Laundering in Environmental Crime_](https:\u002F\u002Fwww.fatf-gafi.org\u002Fmedia\u002Ffatf\u002Fdocuments\u002Freports\u002FMoney-Laundering-from-Environmental-Crime.pdf) issued a few days prior to the event, which covers waste trafficking alongside illegal mining and logging. \n\nWatch the [full recording on YouTube](https:\u002F\u002Fyoutu.be\u002FT-POVucGPoU) or read the summary below.\n\n### Skewed incentives drive waste trafficking\n\nWaste typically has a negative value – it costs businesses money to treat it in a way  that is safe and does not harm the environment. Costs include treatment, technology and labour costs in line with national laws and environmental regulations.\n\nThere is therefore an incentive for companies wishing to avoid these costs to export the waste to other countries with less strict environmental standards, or to illegally dump and dispose of such waste. Many such companies are in developed countries and include licensed waste management firms. Common destinations depending on the type of waste are Southeast Asia, Eastern Europe and West Africa.\n\nThis trade becomes illegal when it violates the [Basel Convention](http:\u002F\u002Fwww.basel.int\u002F) on controlling transboundary movements of hazardous wastes and their disposal, or the rules and regulations of both exporting and importing counties. Examples are when importing countries receive waste they have not consented to, or when the waste shipment  is contaminated with hazardous materials.\n\nAll exports of hazardous waste from OECD countries to other parts of the world are prohibited under the Basel Convention’s Ban Amendment.\n\n### Extracting value from waste\n\nAs well as cutting costs, companies also generate criminal proceeds by illegally selling or trading waste as second-hand goods, or burning it to generate energy.\n\nAccording to the FATF report, the profit generated from illicit waste amounts to USD 10–12 billion annually, which puts profits  on a par with other major crime areas such as human trafficking.\n\nDue in part to the significant profits, organised crime groups in some countries have entered and sought to take advantage of this criminal market.\n\n### A high-profit, low-risk crime\n\nWaste trafficking is still a high-profit and low-risk crime. Detection, investigations and prosecutions are rare, and penalties are low.\n\nUnscrupulous companies wishing to take advantage of what is in effect a “self-certification” process may bribe public officials that issue waste management permits, or co-opt the relevant inspectors, customs agents and port officials into the trafficking scheme. Law enforcement officers may also lack the specialist knowledge and technical capacity to differentiate legal from illegal waste shipments. \n\nFrom a wider enforcement point of view, it was stressed that it is both urgent and critical for environmental law enforcement officers to gain greater knowledge of money laundering and increase their technical capacity in asset tracing. In the case of Indonesia, the Indonesian Constitutional Court on 29 June 2021 decided to give authority to specialist environmental enforcement officers to enforce money laundering offences related to environmental crimes.\n\n### As simple as just changing a number\n\nA common technique mentioned by the panellists is falsifying documents to, for example, mis-classify waste as recycling or second-hand goods, or classify hazardous waste as non-hazardous. It can be as simple as changing the waste code from the European Waste Catalogue (commonly known as CER code), falsifying the destination, or under-\u002Fover-invoicing the shipment.\n\nThe fact that criminals – individuals or organised crime networks – often operate legitimate waste management companies makes it easy to hide the criminal origins of their funds. Those who engage in both legal and illegal waste trade can easily mix the payment across the two business lines.\n\nThese same companies also misuse the trade sector to conceal movement of value and proceeds across borders. This includes by under- and over-invoicing for shipments, among other techniques.\n\nThe panellists offered some hope, though. Compared to other environmental crimes such as illegal logging, where criminals make use of complex corporate structures and offshore financial centres to launder their proceeds, those engaged in waste trafficking appear to use less sophisticated techniques.\n\nSo in theory, there is a lot of scope to detect, investigate and prosecute waste criminals to clean up the industry.\n\n### Follow the money to find those who _aren’t_ getting their hands dirty?\n\nA follow-the-money approach to waste crime – i.e. systematically applying financial investigation techniques to trace illicit financial flows to reveal the kingpins behind criminal operation– has huge potential to support current enforcement efforts.\n\nThe tools, capacity and awareness to investigate financial crimes related to waste trafficking, including corruption, are however lacking. This is no surprise, given that several previous webinars in the [Corrupting the Environment series](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption\u002Fcorrupting-environment) have found that environmental crimes generally are distressingly low on the priority list of law enforcement and financial intelligence units in most countries.\n\nIn the judicial process, prosecutors have until recently been hampered by the lack of a clear methodology to calculate the cost of harms caused by illegal waste shipments. A new methodology developed by the European Union’s WasteForce project aims to help remedy this gap by proposing a [framework to generate information on the health risks and environmental damage](https:\u002F\u002Fwww.wasteforceproject.eu\u002Fwp-content\u002Fuploads\u002F2020\u002F04\u002FD2.3-WasteForce-Measuring-Environmental-Damage.pdf) caused by individual waste transports and to give those harms a monetary value.\n\nThe argument to apply a follow-the-money approach to waste crime is even more compelling in light of the Covid-19 pandemic, which posed significant challenges for physical inspections and law enforcement operations.\n\n### Preventing waste crime starts with a proper risk assessment…\n\nThe panellists emphasised the need for stronger prevention measures to complement the existing enforcement efforts. The FATF has found that less than half of the countries that participated in their study had considered the laundering threats from waste trafficking within their national risk assessments.\n\nRisk assessment is particularly important because it informs the allocation of resources and the priorities of government agencies, including law enforcement and financial intelligence units.\n\nThe FATF report lists several risk indicators as a starting point for government and private sector actors to consider their risk exposure from waste trafficking.\n\n### …and requires cross-sector collaboration\n\nMore intensive collaboration and multi-stakeholder dialogue between environmental crime experts, customs and financial investigators is another key recommendation arising from the webinar.\n\nThis means both strategic and tactical information-sharing and the formation of dedicated taskforces or communication channels.\n\nBuilding a complete picture of the waste industry and criminal threats will also require inputs from across the public and private sectors, such as legitimate waste management companies or industry associations, law enforcement agencies and financial institutions. This includes dialogue on the key criminal loopholes and what suspicious financial flows relating to illegal waste trade might look like.\n\nEnvironmental agencies need greater capacity to “follow the money”, either through building in-house expertise or working in joint investigation teams with financial investigation and asset recovery experts. This would help them apply this powerful approach to all environmental crimes, not only waste trafficking.\n\nFinally, as ever, preventing crimes that are facilitated by corruption and money laundering – like waste crimes and so many other crimes that harm the environment and human health – needs governments to have effective anti-money laundering systems in place. Implementing the FATF Recommendations, including those on beneficial ownership registries, is an important place to start.\n\n### With thanks to our panel\n\n*   Ailsa Hart, Policy Analyst, Financial Action Task Force (FATF)\n*   Nancy Isarin, Environmental Enforcement Expert\n*   Yazid Nurhuda, Director for Criminal Law Enforcement, Ministry of Environment and Forestry of the Republic of Indonesia\n*   Dr Antonio Pergolizzi, Environmental Analyst, Visiting Professor at the University of Camerino and Author of [_Emergenza green corruption: Come la corruzione divora l'ambiente_](https:\u002F\u002Fwww.amazon.it\u002FEmergenza-corruption-corruzione-divora-lambiente\u002Fdp\u002F8893760460)\n*   Juhani Grossmann, Team Leader - Green Corruption programme, Basel Institute on Governance (moderator)\n\n### More:\n\n*   The full recording is [here on YouTube](https:\u002F\u002Fyoutu.be\u002FT-POVucGPoU).\n*   See an [interview with Dr Antonio Pergolizzi](https:\u002F\u002Fwww.youtube.com\u002Fwatch?v=HCdWxdldtJI) on the characteristics of waste trafficking in Italy and how to address the crime.\n*   Register now for our next event on [first-hand insights into what Indonesians think about environmental corruption](https:\u002F\u002Fbaselgovernance.zoom.us\u002Fwebinar\u002Fregister\u002FWN_6fHJrxvBSDqV__VbRJLMJw) on 18 August 2021.\n*   Learn more about the [Corrupting the environment webinar series](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption\u002Fcorrupting-environment) and see previous summaries and video recordings.","2021-07-16","illegal-waste-trade-whats-driving-this-multi-billion-dollar-transnational-crime-and-what-could-stop-it-2060","Illegal waste trade: what’s driving this multi-billion dollar transnational crime and what could stop it? ","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F56a7fea8-f684-4ad5-bd68-53b721851644?width=1000&height=650&format=webp&quality=80",[],[355,156],[180,18,288],[419],{"tags_id":420},{"id":292,"name":293},2060,[355,156],[180,18,288],[],[],[240],[],"2022-05-26T22:52:46.000Z",[],"\u002Fresources\u002Fnews\u002Fillegal-waste-trade-whats-driving-this-multi-billion-dollar-transnational-crime-and-what-could-stop-it-2060",{"left":432,"top":432,"width":433,"height":433,"rotate":432,"vFlip":434,"hFlip":434,"body":435},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>",1780676519847]