[{"data":1,"prerenderedAt":321},["ShallowReactive",2],{"news-the-basel-institute-becomes-an-associated-institute-of-the-university-of-basel-531":3,"news-the-basel-institute-becomes-an-associated-institute-of-the-university-of-basel-531-similar":30,"i-heroicons:arrow-left-20-solid":316},[4],{"id":5,"status":6,"date_created":7,"date_updated":8,"title":9,"type":10,"body":11,"date":12,"topic":13,"slug":15,"activity":16,"nid":18,"topics":19,"activities":20,"programme":21,"area":21,"websites":22,"language":21,"image":21,"translation_of":21,"countries":24,"tags":25,"authors":26,"images":27,"translations":28,"content":29},10252,"published","2022-05-26T22:59:36.000Z","2025-08-31T23:14:59.000Z","The Basel Institute becomes an “associated institute” of the University of Basel","News","The Counsel of the University of Basel has officially approved the association agreement between the University of Basel and the Basel Institute on Governance. The Basel Institute, along with only a very small group of other independent Swiss organizations, including the Swiss Tropical and Public Health Institute and Swisspeace, is now an official “associated institute” of the University of Basel.\n\nThe purpose of the association agreement is to strengthen the links and collaboration between the two institutions, by facilitating greater access, transfer and exchange of academic sciences and research of the University of Basel on the one hand, and hands-on, praxis-oriented experience of the Basel Institute on the other hand.","2013-05-01",[14],"","the-basel-institute-becomes-an-associated-institute-of-the-university-of-basel-531",[17],"Partnerships",531,[],[17],null,[23],"Main page",[],[],[],[],[],[],[31,74,111,138,160,204,237,267,290],{"id":32,"body":33,"status":6,"type":34,"date":35,"slug":36,"title":37,"image":38,"countries":39,"topic":41,"activity":44,"tags":50,"nid":59,"topics":60,"activities":62,"authors":63,"images":65,"websites":66,"area":21,"programme":21,"language":21,"translations":67,"translation_of":21,"user_created":68,"date_created":69,"user_updated":70,"date_updated":71,"content":72,"link":73},9609,"The following summary reflects key messages emerging from the [Harnessing the intangible: enhancing integrity during crises](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002F25-march-oecd-knowledge-partner-event-enhancing-integrity-during-crises) Knowledge Partner session on 25 March 2021 at the 2021 OECD Global Anti-Corruption & Integrity Forum.\n\nHosted by the Basel Institute and moderated by Claudia Baez Camargo, Head of Public Governance, the event explored how practitioners could tailor approaches to strengthen integrity during an emergency response to counter recurrent social norms and informal practices.\n\nThe panel incorporated a wide range of perspectives from health, anti-corruption and behavioural research, featuring Dina Balabanova and Eleanor Hutchinson of the London School of Hygiene and Tropical Medicine, David Jackson of the U4 Anti-Corruption Resource Centre, and Ruth Persian of The Behavioural Insights Team.\n\n### Why aren’t traditional approaches to tackling corruption and promoting integrity working?\n\nA key takeaway from the session is that mainstream anti-corruption interventions focusing on accountability, transparency and law enforcement measures have not been as effective as we would like in combatting corruption.\n\nCould this be because we don’t make enough effort to understand the local context, social networks and power dynamics in the target countries as well as individual actors’ experience and motivation? A growing body of evidence suggests so.\n\nFor example, [recent research](https:\u002F\u002Fresearchonline.lshtm.ac.uk\u002Fid\u002Feprint\u002F4659908\u002F1\u002FACE-WorkingPaper014-NigeriaAbsenteeism-190916.pdf) carried out in Nigeria by the London School of Hygiene & Tropical Medicine reveals that the causes of absenteeism among Nigerian health workers are much more complex than one might expect. They encompass economic pressures, structural inefficacies and managerial\u002Forganisational dynamics, with the research also emphasising that these are shaped by sociocultural factors and political relationships.\n\nWithout a more nuanced analysis of how and why people behave as they do and the context in which they make decisions, laws and rules alone are unlikely to change the drivers of corrupt behaviour. Initiatives are increasingly focusing on improving health system governance, but thinking about the “upstream” social and political factors is essential.\n\nExploring social norms can offer insights into the drivers of unethical\u002Fcorrupt decision-making. For instance, the Basel Institute’s current [research project in Tanzania under the GI-ACE programme](https:\u002F\u002Face.globalintegrity.org\u002Fprojects\u002Ftanzhealth\u002F) shines a spotlight on, among other things, social norms related to returning favours or serving family members first. Health workers are put under pressure to make special concessions to their kinship or those who offer gifts. If people follow these informal rules, merely changing or strengthening laws or rules will not get rid of the underlying drivers of corruption or violations of integrity.\n\nThe message is clear: when designing interventions, it is critical to first understand the context, including what social norms are at play and which behavioural and structural barriers to behaviour change the different actors face.\n\n### Are we less rational than we think – and even worse in a crisis?\n\nTraditional economic thinking has assumed that human beings are rational agents acting according to an analytical, cost\u002Fbenefit analysis. In his best-selling book, _Thinking, Fast and Slow_, Daniel Kahneman referred to this as slow “System 2” thinking. In contrast, System 1 thinking is fast and automatic, and more susceptible to environmental influences and biases than we think.\n\nHowever, policies and systems are often designed with only System 2 in mind. Furthermore, in situations where decision-makers act under a lot of pressure and stress – as is the cases in crises –  evidence shows that System 1 is most likely to take over when making decisions.\n\nThis has to be taken into account when designing interventions. In the context of the Covid-19 pandemic, interventions could support medical staff and policy makers by simplifying how information is displayed and framed. For instance, a [study](https:\u002F\u002Fwww.bi.team\u002Fblogs\u002Fredesigning-hospital-prescription-charts-to-reduce-prescribing-errors\u002F) showed how changing how prescription instructions are framed can lead a significant reduction in prescription errors in UK’s National Health Service (NHS).\n\nIt seems likely that this finding can be generalised: by providing information at the right time and an easily accessible format and by simplifying decision-making, people working under a lot of stress are supported to take the right course of action.\n\n### Do crises amplify integrity issues? Or is “crisis” mode quite normal?\n\nThe pandemic has merely exacerbated the fact that health systems around the world are in a constant state of crisis, with regular shortages and understaffing. This generates different pressures on staff workers, with a direct link to integrity issues.\n\nOne issue relates to the political economy of a country. For instance, sanctioning health workers for corrupt behaviour if they enjoy political protection may lead to severe consequences – like job losses – for head of departments. An intervention that does not take this into account would do more harm than good.\n\nGendered norms and expectations also drive behaviour. In the case of absenteeism among Nigerian health workers mentioned above, for example, female nurses are often expected to juggle their shifts with family care and contribution to the household economy (e.g. farming).\n\nMerely changing rules or management without understanding people’s behaviour and the expectations they face in a complex system will not yield the expected results. As for political power, understanding how social and family networks are structured and operate is key to designing effective anti-corruption interventions.\n\n### Harnessing behavioural insights to drive change\n\nA solid [political economy analysis](https:\u002F\u002Fbaselgovernance.org\u002Fpublic-governance\u002Ftechnical-assistance) will help build understanding among anti-corruption practitioners – but what should they do with that understanding? The next step is to understand how to use these insights into different networks to design more effective interventions. This is the idea behind another GI-ACE project led by the Basel Institute on [Harnessing Informality: Designing Anti-Corruption Network Interventions and Strategic Use of Legal Instruments](https:\u002F\u002Face.globalintegrity.org\u002Fwp-content\u002Fuploads\u002F2019\u002F09\u002FBC_ext_project.pdf).\n\nTo continue with the example of absenteeism among health workers, individuals who are negatively affected by this (more working hours, more pressure due to the added activities related to the Covid-19 responses) may be more likely to support an intervention to address the issue.\n\nSo, clearly identifying networks of allies with a reason to support a change in favour of integrity should be an essential step of any intervention.\n\n### How social norms affect behaviour – for better or for worse\n\nAnother interesting point raised during the session was how we all belong to different reference groups which form part of our identity. Social norms stem from these reference groups and influence our behaviours in different ways.\n\nWe follow descriptive norms because they relate to common behaviour, whereas we respect injunctive norms because we think that _others_ think these behaviours are socially appropriate. For example, assisting our family materially because we think that others perceive this as the right thing to do. \n\nThese last norms generate social pressure as we are scared by the social sanctions we would incur by violating them. Social norms become particularly salient during crises when, as mentioned above, System 1 thinking is likely to take over in stressful situations where actors need to make fast decisions under a lot of pressure.\n\nRather than changing social norms, perhaps the objective in the Covid-19 crisis and more generally should therefore be relieve individuals from the pressures generated by the norms.\n\nNorms of elites need careful consideration. Cases of decision-makers violating social distancing norms may make it permissible to violate health guidelines in the eyes of the public. However, research shows that trend-setters – i.e. people within groups leading by example by adopting virtuous behaviours associated with social norms (like respecting social distancing) – play an equally important role in changing undesirable behaviours associated with social norms. Revealing information about these virtuous behaviours within reference groups can incentivise others to change their own behaviour vis-à-vis a social norm.\n\nAnother option that requires careful consideration and handling – and a deep understanding of political economy, behaviours and norms – is for governments to publicly condemn corrupt behaviour using normative interventions, for example naming and shaming individuals who violated covid-19 regulations.\n\n### Can social norms be changed?\n\nSo: relieving individuals from the pressures generated by social norms is one avenue for intervention. Another common form of intervention aims to correct people’s incorrect perceptions of social norms. More drastically, perhaps some norms need to change in order to form the basis of a stronger, healthier and more resilient society. Is this possible?\n\nThe short answer that emerged at the session is yes. Three elements must be present:\n\n*   People need a reason to change.\n*   People must trust each other.\n*   A mechanism must be in place to let change occur (e.g. a civic space).\n\nThis implies that changing social norms to encourage integrity is a collective effort. It is also an immensely challenging one – but nonetheless essential if we wish to enhance integrity during crises as well as during “business as usual”.\n\n### Learn more\n\n*   Read more about our Public Governance team’s [research on social norms and related factors here](https:\u002F\u002Fbaselgovernance.org\u002Fpublic-governance\u002Fresearch-projects).\n*   Learn more about the UK-funded Anti-Corruption Evidence (ACE) programme and its two components: [SOAS-ACE](https:\u002F\u002Face.soas.ac.uk\u002F) (led by SOAS University of London) and [GI-ACE](https:\u002F\u002Face.globalintegrity.org\u002F) (led by Global Integrity).\n*   Read a publication on the [London School of Hygiene & Tropical Medicine (LSHTM)](LSHTM)  website by Dr Dina Balabanova (LSHTM), Professor Obinna Onwujekwe (University of Nigeria) and Dr Eric Umar (University of Malawi) on [Understanding and eliminating health sector corruption impeding UHC at district level in Nigeria and Malawi: institutions, individuals and incentives](https:\u002F\u002Fwww.lshtm.ac.uk\u002Fresearch\u002Fcentres-projects-groups\u002Funderstanding-and-eliminating-health-systems-corruption).\n*   Watch a [video recording of the session on YouTube](https:\u002F\u002Fyoutu.be\u002FffVS76k4qNg).","Blog","2021-04-14","how-to-enhance-integrity-during-crises-lessons-from-behavioural-science-2008","How to enhance integrity during crises: lessons from behavioural science","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F82be3e12-2443-4f36-b39b-0141a42f1473?width=1000&height=650&format=webp&quality=80",[40],7343,[42,43],"Prevention"," Research and Innovation",[45,46,47,48,49],"Events","Research","Insights","Anti-corruption interventions","Presentations",[51,55],{"tags_id":52},{"id":53,"name":54},848,"Behavioural science",{"tags_id":56},{"id":57,"name":58},1381,"Health",2008,[61],"Prevention Research and Innovation",[45,46,47,48,49],[64],1196,[],[23],[],"03bebfd8-0b40-4a2a-820d-b9d9c13b9de6","2022-05-26T22:53:12.000Z","3d9ff205-1640-4f34-b5b6-86977f51bbd6","2026-05-07T21:29:42.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-to-enhance-integrity-during-crises-lessons-from-behavioural-science-2008",{"id":75,"body":76,"status":6,"type":34,"date":77,"slug":78,"title":79,"image":80,"countries":81,"topic":83,"activity":84,"tags":85,"nid":98,"topics":99,"activities":100,"authors":101,"images":104,"websites":21,"area":21,"programme":21,"language":105,"translations":106,"translation_of":21,"user_created":68,"date_created":107,"user_updated":70,"date_updated":108,"content":109,"link":110},10572,"Corruption at border points remains a pressing global issue, threatening not only border integrity but also the health, safety and security of our societies. It enables illicit trafficking, facilitates organised crime and undermines trust in public institutions.\n\nIn our _[Working Paper 58](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-58)_, Saba Kassa and Jacopo Costa examine how corruption facilitates drug trafficking through the port of Rotterdam.\n\nThrough in-depth interviews with stakeholders, a review of judicial cases and desk research, the paper shows how trafficking and corruption strategies are changing in response to strengthened enforcement at border spaces.\n\nIt contributes to the growing body of work that looks at corruption from a systemic viewpoint, analysing the relationships and adaptive capabilities that allow organised crime to thrive.\n\nThe Working Paper was written as part of the [FALCON](https:\u002F\u002Fwww.falcon-horizon.eu\u002F) (Fight Against Large-scale Corruption and Organised Crime Networks) project. The research supports efforts to develop more robust and forward-looking approaches to combat corruption and drug trafficking.\n\nRead the executive summary below.\n\n### Unintended consequences of strengthened enforcement\n\nThis Working Paper examines how corruption facilitates drug trafficking (specifically cocaine) through the port of Rotterdam, looking at the underlying drivers and strategies involved.\n\nLegal trade routes and commercial ports are especially attractive because of the high volumes of cargo, which make it possible to conceal illicit cargo under licit cargo. The spatial complexity of the port of Rotterdam also makes it difficult to fully secure it against criminal activity.\n\nDigging deeper into the facilitating factors of trafficking, the paper finds that, paradoxically, a main driver of rising border corruption is the increased political attention on and resources dedicated to fighting trafficking.\n\nDesk research and stakeholder interviews highlight that as authorities deploy new technology to improve detection, traffickers face more obstacles to operating effectively.\n\nHaving someone on the inside then becomes increasingly important. So, an unintended but important consequence of the strengthened fight against drug trafficking is that corruption becomes even more essential for the operational success of organised crime networks.\n\n### Customs officials are specifically vulnerable\n\nThis study focuses specifically on the role of customs. Tasked with monitoring the import and export of goods, customs officers are important actors in the fight against drug trafficking. However, their role also makes them vulnerable: they have crucial knowledge on processes and procedures, access to systems and discretionary power that can be exploited by criminals.\n\nThe desk research shows that corruption is used strategically to circumvent two important bottlenecks: the container screening and security as cargo enters the port, and the exit of drugs from the port. Traffickers may seek to obtain key information or direct assistance from customs officers.\n\n### Collusion – coercion – infiltration\n\nThese corrupt relationships and the emerging networks between members of crime groups and the customs officials are diverse. Some relationships can be characterised by collusion, where customs officials offer their services or are persuaded to cooperate. This collusion may be opportunistic or targeted.\n\nOther relationships can be characterised by coercion. Customs officials may be lured by financial reward, but this is accompanied by intimidation or the threat of violence to ensure that the officer cooperates and continues to cooperate. Our research highlights that the boundary between collusion and coercion is often blurred.\n\nBeyond collusion and coercion, we also see infiltration, which crosses the boundaries between the criminal, public and private. What emerges is less a matter of individual corruption and more akin to regulatory capture, where the public office position is held by a member of the criminal network.\n\nThe review of the judicial cases shows that bribes involved in these schemes can amount to millions. To hide and use the illicit gains, traffickers rely on money laundering, disguising its source as legitimate. They often enlist the help of family and friends, a trusted inner circle or professional specialists. They may also hide cash at home or invest it in assets and businesses in the Netherlands or abroad.\n\n### Adaptive corruption strategies\n\nA key finding of our research is that the criminal and corruption strategies used to facilitate drug trafficking are highly adaptive. The underlying driver of this adaptability is the unchanging demand for drugs and high profitability of the crime. This pushes traffickers to adopt new strategies to overcome hurdles in supplying the demand.\n\nCorruption strategies adapt in response to new enforcement measures. When control systems are changed and\u002For strengthened, corruption strategies evolve alongside them. This research identifies some key patterns:\n\n*   Stronger detection efforts increase the incentives for corruption.\n*   Evolving systems encourage a similar shift in corruption strategies.\n*   Anti-corruption and anti-trafficking measures may change the profile of those most vulnerable to being co-opted.\n*   The characteristics of corruption can also evolve, from collusion to coercion, to full infiltration of institutions and systems – with blurred lines in between.\n\n### Trafficking strategies evolve, too\n\nTrafficking strategies are similarly adaptive. There have been increased efforts by the port to combat trafficking through enhanced detection and technology. This was initially reflected by increased drug seizures. But since 2024, drugs seizures have declined.\n\nThe research findings provide an explanation for this: As detection strengthens, more drug seizures are made. But what may happen, too, is a response to these new measures. As the risk of detection increases, criminals may adapt their trafficking strategies to overcome the additional hurdles, including:\n\n*   changing concealment strategies; and\n*   changing modes of transport and trafficking routes, including to ports outside of the Netherlands.\n\n### Red flags and risk indicators\n\nThese developments highlight the complexity in understanding the impact of stronger anti-trafficking measures on both corruption and trafficking strategies.\n\nTrafficking and corruption are typically measured by detection, for example, by changes in the volume of drug seizures or the number of public officials caught engaging in corruption.\n\nBut the elephant in the room is that increasingly sophisticated criminal strategies can hide what is really happening. This underscores the need to continuously strengthen our ability to recognise “red flags” of corruption and trafficking. Data-driven tools and refined risk indicators are critical for understanding how crime and corruption strategies are changing.\n\n### A holistic understanding and improved foresight\n\nThe evolving nature of criminal strategies is often likened to a game of chess: enforcement makes a move, and criminal networks adapt. But what now seems to be emerging is more troubling.\n\nWhen barriers to drug trafficking increase while demand remains unchanged, crime and corruption strategies adapt in ways that can deepen their impact on society, leading for example to the hardening of crime and associated violence.\n\nThis makes anticipating how crime may adapt to changing anti-corruption and anti-trafficking strategies critical. Improved foresight and scenario-building capacities will be vital in order to develop more robust enforcement efforts against drug trafficking and mitigate the negative impact on society.\n\nA holistic approach is essential. Addressing corruption as a facilitator of drug trafficking requires a broad view of crime that focuses on understanding vulnerabilities, leveraging data and harnessing collaboration.\n\nThe risk of trafficking routes changing are high, therefore, we must use every tool at our disposal to ensure effective and sustainable enforcement efforts.\n\n### Learn more\n\n*   Download the full _[Working Paper 58: Corruption as a facilitator of drug trafficking in the port of Rotterdam: Drivers, strategies and implications](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-58)_\n*   View related online workshop for enforcement and research communities: _[Red flags at the frontier: detecting and disrupting border corruption in the EU](https:\u002F\u002Fbaselgovernance.org\u002Fnode\u002F2844)_, 23 September 2025\n\n### _Acknowledgement and disclaimer_\n\n_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 the Working Paper 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._","2025-09-11","how-corruption-helps-drug-traffickers-adapt-to-strengthened-border-enforcement-2848","How corruption helps drug traffickers adapt to strengthened border enforcement","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F13171c8d-1c71-4c6a-9688-3c1ff7b9775a?width=1000&height=650&format=webp&quality=80",[82],7796,[42,43],[46,47],[86,90,94],{"tags_id":87},{"id":88,"name":89},967,"Organised crime",{"tags_id":91},{"id":92,"name":93},859,"Corruption risks",{"tags_id":95},{"id":96,"name":97},1374,"Law enforcement",2848,[61],[46,47],[102,103],1355,1356,[],"English",[],"2025-09-11T16:01:34.000Z","2026-05-07T21:29:57.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-corruption-helps-drug-traffickers-adapt-to-strengthened-border-enforcement-2848",{"id":112,"body":113,"status":6,"type":34,"date":114,"slug":115,"title":116,"image":117,"countries":118,"topic":120,"activity":123,"tags":124,"nid":125,"topics":126,"activities":127,"authors":128,"images":130,"websites":131,"area":21,"programme":21,"language":21,"translations":132,"translation_of":21,"user_created":68,"date_created":133,"user_updated":134,"date_updated":135,"content":136,"link":137},9529,"_What are the four biggest developments in anti-corruption Collective Action in the last years? And what are some examples of these around the world?_\n\n_Gemma Aiolfi spoke on these topics to delegates at a Members Meeting of Etik ve İtibar Derneği (TEİD) – the Turkish Ethics and Reputation Society. [TEİD](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub\u002Finitiatives-database\u002Fetik-ve-itibar-dernegi-teid-turkish-ethics-and) is an inspiring cross-sectoral Collective Action initiative that has been working tirelessly since 2010 to promote business ethics in Turkey. Read her speech below or view it on [here on YouTube](https:\u002F\u002Fwww.youtube.com\u002Fwatch?v=Js4GWi_Csz4)._\n\n_If you have any questions about Collective Action or want more details on any of these initiatives, please don’t hesitate to browse the [B20 Collective Action Hub resource centre](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub). You can get in touch with our team via our [Helpdesk](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub\u002Fcollective-action-helpdesk), a free advice service on anti-corruption Collective Action to promote fair business._\n\nThank you for the invitation to speak at this important milestone event for the ethics and reputation society. May I congratulate you all on the commitment and engagement you all bring to addressing integrity and corruption related challenges.\n\nI’ve been asked to talk about examples of [anti-corruption Collective Action](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub) initiatives from around the world.\n\nBefore doing so I just wanted to mention four developments that are incentivising companies to engage in anti-corruption Collective Action.\n\n### 1 Revised OECD Recommendation includes Collective Action for the first time\n\nThe first is the [revised OECD Recommendation](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Foecd-recommends-anti-corruption-collective-action-its-revised-anti-bribery-recommendation) published by the member countries of the Anti-Bribery Convention at the end of 2021. Among the new measures to reinforce efforts to prevent, detect and investigate foreign bribery, Collective Action is included for the first time.  Member countries have to:\n\n_“consider fostering, facilitating, engaging, or participating in anti-bribery collective action initiatives with private and public sector representatives, as well as civil society organisations, aiming to address foreign bribery and bribe solicitation.”_\n\nThis Recommendation will be part of the country monitoring process that the 44 member countries of the OECD Convention undergo on an ongoing basis. Quite simply, this means that governments will be asked to explain what they have done to foster, facilitate, engage or participate in Collective Action. So there is an international standard that is now encouraging the public and private sectors to get active and participate in Collective Action.\n\n### 2 Collective Action becomes a key part of ESG and non-financial reporting\n\nSecondly, there is rapidly growing interest in [corporate non-financial reporting](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fnew-journal-article-anti-corruption-compliance-non-financial-reporting-and-collective-action), where companies explain how they address environmental, social and governance (ESG) issues.\n\nThe largest organisation that publishes such information is the [Global Reporting Initiative](https:\u002F\u002Fwww.globalreporting.org\u002F) or GRI. GRI’s reporting standard on anti-corruption asks companies to describe whether they participate in Collective Action to combat corruption, including:\n\n*   the company’s strategy for its Collective Action activities;\n*   a list of the initiatives in which the organisation participates;\n*   a description of the main commitments of these initiatives.\n\n### 3 Companies find synergies in human rights and anti-corruption\n\nThirdly, there’s an increasing recognition in the convergences or overlaps between how companies are addressing [human rights and corruption](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub\u002Fhuman-rights).\n\nThese topics have much in common and are linked, but they also have important differences: Using Collective Action to share knowledge and experiences is a practical approach [that some companies are already using](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fconnecting-anti-corruption-and-human-rights-agendas-challenges-and-opportunities-collective) given the new laws on human rights in order to keep up with these new developments.\n\n### 4 Governments explore ways to engage with the private sector through Collective Action\n\nFourthly, the [Network of Corruption Prevention Authorities (NCPA)](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fstopping-corruption-it-occurs-why-basel-institute-has-become-partner-network-corruption) brings together government organisations from all over the world, many of which are responsible for drafting their national anti-corruption strategies. These strategies call on the private sector to prevent corruption.\n\nThese authorities are now exchanging on their experiences and different ideas on how to engage with the private sector, including through Collective Action.\n\nThose are some of the developments in mainstreaming Collective Action. Let’s now take a look at some of the inspiring examples of Collective Action for companies.\n\nCollective Action in action – examples from around the world\n------------------------------------------------------------\n\n### Measuring the effectiveness of anti-corruption compliance\n\nA question often asked by investors and boards is: How can you measure whether an anti-corruption compliance programme is really effective?\n\nThis was a question posed by the one of the world’s largest investors – the Norwegian Sovereign Wealth fund manager – to a group of pharmaceutical companies. Together, they [formed a Collective Action initiative to agree on key performance indicators](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fmeasuring-effectiveness-anti-corruption-programmes-health-care-sector-developing-indicators) to identify what an effective anti-bribery and corruption programme means in practice.\n\nThe output was a set of [indicators for companies to report on publicly](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fmeasuring-effectiveness-anti-corruption-programmes-indicators-company-reporting). So far, two companies from the eight that participated in the Collective Action have published information about the quantitative and qualitative indicators of the effectiveness of their anti-corruption compliance programmes. This is probably the start of a discussion to identify more indicators of what is effective.  \n\nThis initiative is an example of how Collective Action can break new ground. It was the first to be inspired by an investor, and also to address a new area that is useful to companies. It may inspire other industry sectors to develop improvements to these basic indicators.\n\n### Transforming beneficial ownership transparency in extractives industries\n\nThe second example is the joint project of two major global Collective Action initiatives. [Open Ownership](https:\u002F\u002Fwww.openownership.org\u002F) and the [Extractive Industries Transparency Initiative](https:\u002F\u002Feiti.org\u002F) (EITI) are partnering to develop and deliver a new global programme called [Opening Extractives](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub\u002Finitiatives-database\u002Fopening-extractives).\n\nOpening Extractives aims to stimulate a real transformation in beneficial ownership transparency in the extractives industry. This will involve governments, companies and civil society publicly revealing the ultimate beneficial owners of their supply chain companies, and partners of the companies that engage in mineral and mining industries.\n\nThis Collective Action could be a game changer in a sector that has long been associated with corruption risks, including kleptocracy and state capture.\n\nIt's an exciting development because it brings together two well established collective action initiatives to tackle a really complex and political issue. We’ll have to see how it develops.\n\n### Sharing compliance expertise between private firms and state-owned enterprises\n\n[Compliance without Borders](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fcompliance-without-borders-new-way-build-anti-corruption-capacity-soes) is a mentoring programme between state-owned enterprises and the private sector that was developed by the B20 and the OECD.  \n\nIt has been piloted in the last few months, and could be a great way for state-owned enterprises to benefit from experienced compliance officers in the private sector sharing their experience and expertise for free.\n\nAt the same time, the private-sector compliance officers learn about the challenges of having to implement a compliance programme in a state-owned organisation.\n\n### Developing industry-tailored anti-corruption guidance for high-risk industries\n\nThe [Natural Resource Governance Institute](https:\u002F\u002Fresourcegovernance.org\u002F) (NRGI) is a non-profit organisation that seeks to improve countries’ governance of their natural resources, with a focus on the oil and gas industry.\n\nOver a two-year period, the NRGI conducted a detailed desk review and analysis of corruption cases involving state-owned enterprises and their oil and gas corporate partners. They identified recurrent corruption issues and reviewed existing best practices in corruption prevention.\n\nThen they brought together, in a series of consultations, 15 of the largest oil companies plus state-owned enterprises and civil society stakeholders. The aim was to develop a new and tailored set of guidance that recommends measures that companies in the oil, gas and mining sectors should adopt to reduce corruption risks when partnering with state-owned enterprises.\n\nThe Guidance also recommends measures SOEs can take to strengthen their anticorruption safeguards.\n\nThe Collective Action entailed interviews with over 110 individuals and 50 companies from NGOs, companies, financial institutions, universities and a core group of 18 companies through closed-door workshops.\n\nThe guidance breaks new ground for three reasons:\n\n*   It focuses on the business interactions between companies and state-owned enterprises – not on everything. For example, it does not cover gifts and entertainment because there’s already lots of guidance on that topic.\n*   It mixes basic and ambitious measures. Some can be implemented already, while others will take longer.\n*   It prioritises the _public interest_ in the producing countries, rather than the company’s interest which is often the focus of compliance guidance. This means higher disclosure levels even if the entities are not legally obliged to do so, and stopping serious forms of corruption like kleptocracy where possible.\n\nThis guidance could provide inspiration to other countries. There are SOEs everywhere in the world and many present similar risks to this industry sector. So the Collective Action methodology that the NRGI used could be applied in other sectors, other countries and to other corruption-related challenges.","2022-02-14","four-major-developments-in-the-fight-against-corruption-through-collective-action-2174","Four major developments in the fight against corruption through Collective Action","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Faa69261a-3a1b-4870-a04d-b46de184fc83?width=1000&height=650&format=webp&quality=80",[119],7270,[121,122],"Collective Action","Private Sector",[45,47,49],[],2174,[121,122],[45,47,49],[129],1174,[],[23,121],[],"2022-05-26T22:52:03.000Z","b0662e2a-864d-4888-a1b7-4342b7570b30","2025-08-31T23:14:40.000Z",[],"\u002Fresources\u002Fnews\u002Ffour-major-developments-in-the-fight-against-corruption-through-collective-action-2174",{"id":139,"body":140,"status":6,"type":34,"date":141,"slug":142,"title":143,"image":144,"countries":145,"topic":147,"activity":148,"tags":149,"nid":150,"topics":151,"activities":152,"authors":153,"images":154,"websites":155,"area":21,"programme":21,"language":21,"translations":156,"translation_of":21,"user_created":68,"date_created":157,"user_updated":134,"date_updated":135,"content":158,"link":159},9712,"The success of the Construction Transparency Initiative (CoST) in Malawi shows the impact Collective Action can have on addressing corruption and levelling the playing field even in difficult environments. But it needs perseverance, leadership and systematic efforts to drive policy change, as our interview below with Joe Chingani, Chairperson of [CoST Malawi](http:\u002F\u002Fcost.mw\u002F), demonstrates. First, some background.\n\n### The costs of corruption in infrastructure projects\n\nPublic infrastructure projects are often the most visible manifestation of how governments are spending taxpayers’ money. They make up a significant chunk of public spending, especially in economically developing countries.\n\nRusting and unfinished railway lines, or ghost airports that have blown their budget out of the water, are a shameful reminder of the cost of corruption and the effects of mismanaged public funds. The World Bank [estimates](http:\u002F\u002Fdocuments1.worldbank.org\u002Fcurated\u002Fen\u002F571281468137721953\u002Fpdf\u002Fwps4271.pdf) that public infrastructure projects lose on average 10–30% of their budget to corruption. And that is before you take into account the devastating social costs of mismanaged public construction projects, when flawed design and sub-standard materials lead to collapsing bridges or unfinished hospitals. Corruption kills.\n\nThe big scandals hit the headlines, but many smaller ones don’t. Either way, addressing corruption in large infrastructure projects is a delicate matter. The actors involved can reach up to the highest ranks of government and the business elites.  \n\n### CoST: a global Collective Action initiative for the construction sector\n\n[The Construction Transparency Initiative](\u002F\u002F\u002FUsers\u002Fmonica.guy\u002FDocuments\u002FTeam\u002FCommunications\u002FBlogs\u002F200706%20CoST%20Malawi\u002FThe%20Construction%20Transparency%20Initiative) (CoST) is a global Collective Action that seeks to address corruption and inefficient public spending in public construction projects by increasing transparency in the implementation of public infrastructure projects.\n\nThe CoST methodology builds on high-level government commitments for more transparency. The initiative engages other stakeholders including the private sector, civil society and the media to act as monitors to increase accountability.\n\nCoST combines a central, financial and technical support system provided by a global secretariat, with a flexible methodology that can be tailored to the context of individual countries. This enables ownership of the process at the local level. As of July 2020, there are 19 CoST country programmes predominantly active in Central America and East Africa.\n\nHow does this Collective Action approach translate into practice? Joe Chingani, Chairperson of [CoST Malawi](http:\u002F\u002Fcost.mw\u002F), explains in this short Q&A with our Collective Action team.\n\nJoe represents the private sector in the steering group of CoST Malawi. What started for him as a mandate from his peers at the Malawi Building and Civil Engineering Contractors and Allied Trade Association has turned into a calling and passion project for almost 10 years. Like Malawi itself, he is welcoming and open, but also candid and outspoken on issues of corruption.\n\n### How does the private sector in Malawi regard anti-corruption initiatives?\n\nIn Malawi, even today there is still a personal and financial cost associated with speaking out about corruption. Whether it’s fewer business opportunities, especially when it comes to public contracts, or the way you are perceived by your industry peers, speaking out about corruption can be alienating.\n\nAfter almost 10 years I am still the only private-sector representative in the CoST steering group, despite concerted and ongoing efforts to ensure more buy-in from businesses.\n\n### What impact has CoST Malawi achieved over the past 10 years? How?\n\nThere are two main areas we focus on in our work.\n\n*   First, we monitor ongoing public construction projects and produce assurance reports. We highlight any issues uncovered so they can be taken up by the relevant authorities.\n*   Secondly, we strive to effect positive change at the policy level, towards developing a more transparent process for public tenders and project implementation.\n\nOver the past years, we have seen more and more uptake and action following our assurance reports. For example, in one strategically important road construction project between Kasungu-Msulira and Nkhotakota, we uncovered systematic mismanagement of funds and also some inconsistencies in the awarding of the contract. The media picked up the [report](https:\u002F\u002Fcost.mw\u002Fwp-content\u002Fuploads\u002F2017\u002F10\u002FCoST-Malawi-2014-Assurance-Report.pdf) and with the additional pressure and public scrutiny, the contract was ultimately retracted and re-tendered.\n\nIt is highly motivational to see public contracts that were riddled with corruption being re-tendered. Even in difficult times, we have continued our reporting and assessments of public construction projects. Perseverance and flexibility have been key.\n\nWe have also celebrated significant changes in government policies as a result of our work, such as the information-sharing requirements under the 2017 [Public Procurement and Disposal of Public Assets Act](https:\u002F\u002Fwww.ppda.mw\u002F).\n\nWe have also found that consistency is important to effect systemic policy change. For example, we have long criticised the government’s practice of awarding contracts without having the budget approved by Parliament or the assurance that there was indeed sufficient budget in place. This type of behaviour opens the door to corruption and non-transparent business dealings. For years we pressured the government to curb these practices and have finally seen a positive response in the last couple of years.\n\n### How does the new CoST public infrastructure information platform fit into the picture?\n\nOur work has evolved over time and now extends beyond just reviewing projects. We want to be proactive and provide expertise and tools to increase transparency in the public procurement  process. In order to do so, CoST Malawi set up an online disclosure portal in 2017 that acts as an [information platform for public infrastructure projects](http:\u002F\u002Fippi.mw\u002F) and contains all relevant documents and information concerning public construction tenders.\n\nWe are currently engaging with the relevant public institutions to build trust and socialise the concept. The aim is to create the first comprehensive database on public construction projects in the country.\n\n### What was the effect of the Cashgate scandal on the construction sector – and on the work of CoST Malawi?\n\nThe 2013 [Cashgate scandal](https:\u002F\u002Fwww.bbc.com\u002Fnews\u002Fworld-africa-25912652) centred around the misuse of a newly set-up electronic payment system, which was used to divert over USD 250 million in public funds. These were paid out to companies through an elaborate web of sham public contracts for products and services that were never rendered. It was a devastating blow for the country financially and it has taken years to recover from it.\n\nPhoney construction companies, as well as reputable medium-sized and legally registered companies, were at the heart of many of the sham contracts. And in the heated political environment, it was difficult and sometimes dangerous to push for transparency. So the scandal presented one of the most difficult hurdles that we faced in our work as CoST to date. We had only just started our pilot project in 2011, during a time of support for anti-corruption measures from the government.\n\nAs the scandal unfolded, not surprisingly, the political will to address corruption diminished. As a result, we were forced to build stronger bridges and ties with other stakeholders, including not only the media and civil society but also and perhaps most importantly with the public.\n\n### How did you engage the public in reporting corruption and mismanagement?\n\nThe discontent of the public was growing at an alarming rate, so we decided it was important to enable the public to voice their concerns and moderate\u002Ffacilitate the discourse with the relevant public institutions.\n\nWe set up a toll-free texting service where citizens from across the country were able to report any mismanagement of public construction projects. To follow up, we would organise a radio panel with government officials to respond to the concerns of the public. In Malawi, communicating through the medium of public radio is still the best way to reach a large audience as not everyone has access to the internet, especially in the rural areas.\n\nMaking sure the information from our assurance reports reaches our audience has also been a concern. As we are not a political advocacy organisation we rely on the media, which has over the years become an important partner and ally in the work that we do.\n\nSensitising the media and other stakeholders to issues of corruption and lack of transparency in the construction sector is a priority for us so we can mobilise and engage more people in the fight against corruption.\n\n### Looking ahead, what’s next for CoST Malawi?\n\nWe are looking into the future with great expectations but also realism. We want to extend the reach of our work within Malawi and continue to be a voice for transparency in the construction sector.\n\nWe are currently facing uncertain times under covid-19, but there are also some unexpected windows of opportunities that are opening up. For the first time in the history of Malawi, an election has been overturned because of suspected vote tampering and corruption. The opposition party has won the repeat election. We don’t know what the future holds, but what the election has shown is that if there is enough pressure from citizens and other stakeholders, the status quo can be challenged.\n\nThe newly appointed Vice President is a champion of our work, which gives us hope that with more political will and with the support of our other partners we can address the roots of systemic corruption in infrastructure projects. Maybe we can benefit from the momentum of change that is in the air.\n\nWe are also looking to build stronger relationships with other country programmes in the region, to ensure we are maximising our knowledge exchange and learning from one another.\n\n### What does CoST Malawi tell us about the potential for Collective Action to combat corruption and create transparency business environments?\n\nPublic infrastructure projects in Malawi are still associated with high levels of corruption and mismanagement of funds. These problems concern both the public and private sector and are unlikely to change overnight.\n\nBut while there is no quick fix, the work of CoST Malawi demonstrates that you can bring about systemic change with a long-term perspective, perseverance and the right people working together. The tangible impact we have had on projects and policies reminds us that change is possible. This is what keeps me motivated and more determined than ever to continue to work towards changing the narrative of corruption in the construction sector in Malawi.\n\nAt a wider level, CoST shows that anti-corruption Collective Action initiatives can achieve positive results and be impactful even when they are operating in a volatile and difficult environment such as ours.\n\n_Learn more about [anti-corruption Collective Action](https:\u002F\u002Fwww.baselgovernance.org\u002Fcollective-action) at the Basel Institute on Governance or check out the database and resources on our [B20 Collective Action Hub](https:\u002F\u002Fwww.baselgovernance.org\u002Fb20-collective-action-hub)._","2020-07-09","corruption-in-construction-how-the-cost-initiative-is-building-a-better-business-environment-in-malawi-1807","Corruption in construction – how the CoST initiative is building a better business environment in Malawi","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F41ff0518-2209-48f2-b8fe-bf09d4eabf28?width=1000&height=650&format=webp&quality=80",[146],7412,[121,122],[14],[],1807,[121,122],[],[],[],[23,121],[],"2022-05-26T22:54:39.000Z",[],"\u002Fresources\u002Fnews\u002Fcorruption-in-construction-how-the-cost-initiative-is-building-a-better-business-environment-in-malawi-1807",{"id":161,"body":162,"status":6,"type":34,"date":163,"slug":164,"title":165,"image":166,"countries":167,"topic":168,"activity":171,"tags":174,"nid":190,"topics":191,"activities":193,"authors":194,"images":197,"websites":198,"area":21,"programme":21,"language":21,"translations":199,"translation_of":21,"user_created":68,"date_created":200,"user_updated":70,"date_updated":201,"content":202,"link":203},9655,"The Basel Institute on Governance is offering a new [Cryptocurrencies and Anti-Money Laundering Compliance Training course](https:\u002F\u002Fbaselgovernance.org\u002Fcourses-and-events\u002Fcryptocurrencies-and-anti-money-laundering-training) aimed at law enforcement officials, professionals in AML compliance and FinTech\u002FRegTech fields, as well as policymakers and investigative journalists.\n\nDelivered over four three-hour online sessions, the course covers the essentials of how to detect and prevent the use of virtual assets for illicit activities. \n\nIn this short article below, course leaders Federico Paesano and Phyllis Atkinson explain why it’s vital for a wide range of stakeholders in the public and private sectors to be able to investigate and defend themselves against criminals’ abuse of cryptocurrencies and other virtual assets.\n\n### Cryptocurrencies at the centre of attention\n\nCryptocurrencies have become an increasingly prominent topic of discussion amongst both public and private sector professionals involved in the prevention and combatting of money laundering. The most well-known cryptocurrency, Bitcoin, has generated a lot of interest, particularly as the media continues to cover a number of high-profile investigations and prosecutions worldwide.\n\nThe notoriety of this currency is not ill-founded. The apparent anonymity and invisibility that cryptocurrencies offer is progressively attracting more and more international criminals and money launderers. \n\n### Financial flows that fly under the radar\n\nCryptocurrencies have characteristics that can confound the efforts of the authorities and make such mediums attractive to the informal and illegal economies.\n\nNotably, they appear to offer the much-craved anonymity and, indeed, invisibility that organised crime requires. In a strongly regulated formal financial sector, this is increasingly difficult to find.\n\nThis perceived anonymity is the main attraction of cryptocurrency as a medium for laundering the proceeds of crime. Although the main cryptocurrency exchanges exercise Know-Your-Customer (KYC) and due diligence procedures, there are a number of other options to purchase bitcoins or other cryptocurrencies privately between individuals and bypass online exchanges completely.\n\nFortunately, as we will cover during the course, cryptocurrency is not as anonymous as many people imagine. Intrinsic characteristics of the blockchain, coupled with an understanding of users’ habits and the use of sophisticated investigative techniques employed by law enforcement, make it possible to identify users.\n\nPut into the context of grand corruption and organised crime scenarios, the use of cryptocurrencies is an example of the ever-evolving tactics employed by criminals to frustrate financial investigations and launder illicit assets.\n\n### How law enforcement and compliance professionals can keep up\n\nWe now have numerous successful criminal investigations where proceeds of crime, laundered through the use of cryptocurrencies, have been recovered. Contrary to popular belief, what makes Bitcoin and other cryptocurrencies work has significant benefits for law enforcement as well.\n\n*   A public and freely accessible ledger of every transaction ever conducted allows law enforcement to trace transactions in a way that would never have been possible before.\n*   Being borderless, law enforcement can access information without some of the barriers of international cooperation that can hinder cross-border investigations.\n*   Since it is immutable, there is no risk that the data will be unavailable after a few months.\n*   There are various techniques that make attribution a task that is within the reach of not only law enforcement but also compliance professionals in the private sector.\n\n### About the course\n\nThis course is meant to address an audience of law enforcement and professionals dealing, at different levels, with virtual assets. The course will deepen the experience and expertise of practitioners in understanding cryptocurrencies and the risks associated. The participants will explore the legislative frameworks and learn how to trace illicit financial flows channelled through cryptocurrency.\n\nGiven the inevitable overlap between virtual assets and ordinary assets such as fiat currency, real estate, yachts and jewellery, this course also touches briefly on the issue of beneficial ownership. Assets acquired as a result of criminal activity in the form of cryptocurrency may well be exchanged for other assets, thus requiring the identification, tracing and seizure of the proceeds of crime. Determining the beneficial owner of illicit assets remains an integral part of the process, and represents a significant challenge to practitioners across the globe.\n\nThe workshop will be centred around a practical case scenario building on known and potential uses to “clean” stolen assets for integration into the financial system. Participants will be asked to trace transactions through the blockchain.\n\nThis practical exercise will be interspersed with key presentations, starting from the basics of cryptography, exploring how cryptocurrencies work, how to use the blockchain in financial investigations, understanding compliance and due diligence, through to the final recovery of assets.\n\nA presentation on European Union Anti-Money Laundering Directives (EU AMLDs) and Ultimate Beneficial Ownership (UBO) requirements, and the use of layering and direct ownership chains by beneficial owners, will be included.\n\nThe training will also take advantage of an external speaker, Christine Gschwend from MME Legal, a renowned expert on compliance and anti-money laundering. She will cover the compliance and legal aspects of cryptocurrency and virtual assets, and the way the private sector can be compliant with the legislation set forth internationally. \n\n### How to sign up\n\nThe next course will take place in English from 7–10 December 2020 (09:00–12:30 CET each day with a half-hour break). The fee is CHF 500 per person, with a discounted rate of CHF 200 per person available to members of public-sector, international, non-profit and academic organisations, plus independent journalists.\n\n[Find out more and book your space now!](https:\u002F\u002Fbaselgovernance.org\u002Fcourses-and-events\u002Fcryptocurrencies-and-anti-money-laundering-training)","2020-11-23","new-online-course-on-cryptocurrencies-and-anti-money-laundering-1922","New online course on cryptocurrencies and anti-money laundering","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fd0257c81-34ab-434b-95e7-2b2144249399?width=1000&height=650&format=webp&quality=80",[],[169,170,122],"Anti-Money Laundering","Asset Recovery",[172,173],"Courses","Training",[175,179,182,186],{"tags_id":176},{"id":177,"name":178},854,"Virtual assets",{"tags_id":180},{"id":181,"name":173},1372,{"tags_id":183},{"id":184,"name":185},818,"Anti-money laundering",{"tags_id":187},{"id":188,"name":189},1236,"Compliance",1922,[169,192,122],"Asset Recovery and Enforcement",[172,173],[195,196],1203,1204,[],[23],[],"2022-05-26T22:53:52.000Z","2026-05-29T22:21:48.000Z",[],"\u002Fresources\u002Fnews\u002Fnew-online-course-on-cryptocurrencies-and-anti-money-laundering-1922",{"id":205,"body":206,"status":6,"type":34,"date":207,"slug":208,"title":209,"image":210,"countries":211,"topic":212,"activity":213,"tags":214,"nid":219,"topics":220,"activities":221,"authors":222,"images":223,"websites":21,"area":21,"programme":21,"language":105,"translations":224,"translation_of":21,"user_created":68,"date_created":225,"user_updated":70,"date_updated":226,"content":227,"link":236},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",[],[42,43],[45,46],[215],{"tags_id":216},{"id":217,"name":218},982,"Anti-corruption",2945,[61],[45,46],[],[],[],"2026-04-15T22:45:18.000Z","2026-05-07T21:29:58.000Z",[228,229,230,231,232,233,234,235],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":238,"body":239,"status":6,"type":34,"date":240,"slug":241,"title":242,"image":243,"countries":244,"topic":245,"activity":246,"tags":248,"nid":255,"topics":256,"activities":257,"authors":258,"images":260,"websites":261,"area":21,"programme":21,"language":21,"translations":262,"translation_of":21,"user_created":68,"date_created":263,"user_updated":70,"date_updated":264,"content":265,"link":266},9807,"In 2019, Estonia achieved the lowest risk score out of the 125 countries in the Public Edition of the [Basel AML Index](https:\u002F\u002Fwww.baselgovernance.org\u002Fbasel-aml-index), 2.68 out of 10. In fact, Estonia has consistently been among the top performers since 2012, when the Basel AML index was first calculated.\n\nYet Estonia hit headlines two years ago with a massive [money laundering scandal](https:\u002F\u002Fen.wikipedia.org\u002Fwiki\u002FDanske_Bank_money_laundering_scandal): EUR 200 billion of suspicious payments (non-resident money from Russia and other former Soviet states) were channelled through the tiny Estonian branch of Danske Bank between 2007 and 2015.\n\nWith such huge media attention on this scandal, it is understandable that some people question the veracity of the Basel AML Index. If you are one of those people, please read on.\n\n### Reliance upon data sources\n\nThe Basel AML Index Public Edition is a composite index, meaning it provides a simplified comparison of countries’ risks of ML\u002FTF. Each country's risk score is calculated from available data and does not represent an opinion or subjective assessment by the Basel Institute.\n\nIn that sense, we are bound by what the [data](https:\u002F\u002Fwww.baselgovernance.org\u002Fbasel-aml-index\u002Fmethodology\u002Findicators) and [methodology](https:\u002F\u002Fwww.baselgovernance.org\u002Fbasel-aml-index\u002Fmethodology) reveal and cannot tweak individual countries’ risk scores if they don’t match our subjective perceptions. In the same way, a good scientist does not fiddle the results of an experiment if it doesn’t match her initial expectations but instead seeks to understand why it does not.\n\nEstonia receives good scores in reputable data sources – including from the Financial Action Task Force (FATF), Transparency International, the World Bank and the World Economic Forum – dealing with corruption and financial, legal and political risks.\n\nThe Basel AML Index reflects these scores, not the scandals.\n\n### No recent FATF evaluation – and none planned\n\nEstonia’s low risk score is largely driven by its good performance in its [2014 FATF Mutual Evaluation Report](https:\u002F\u002Fwww.coe.int\u002Fen\u002Fweb\u002Fmoneyval\u002Fjurisdictions\u002Festonia) by Moneyval, the regional monitoring body for AML\u002FCFT. FATF Mutual Evaluation Reports are a crucial indicator in the Basel AML Index, as they are the main instrument for assessing and comparing countries’ legal and institutional AML\u002FCFT frameworks.\n\nThe 2014 report, which produces a score of 3.61 out of 10, states that Estonia’s supervisory framework is “broadly sound”, and the authorities “have been effective in confiscating and seizing property in ML and drug related cases”.\n\nEstonia’s score may worsen when it is re-assessed according to the latest FATF methodology, which focuses on the _effectiveness_ of AML\u002FCFT measures and not only technical compliance with the FATF’s 40 Recommendations. Not only is it common for countries to obtain poorer scores when assessed with the latest methodology, but Estonia has been subject to recent criticism of its effectiveness in preventing ML. In fact, this is precisely [what happened to Malta](https:\u002F\u002Fwww.baselgovernance.org\u002Fblog\u002Fmalta-high-risk-or-low-risk-country-money-laundering).\n\nThe FATF does not seem to have scheduled an onsite mission to Estonia in the next three years. Consequently, it will not drastically change its risk score in the Basel AML Index for at least the next three years.\n\n### Skewed perceptions: is what we see all there is?\n\nThe Basel AML Index measures the _risk_ of money laundering, not the actual amount of money laundering. This would be an impossible task given the hidden nature of illicit financial flows.\n\nML\u002FTF risk is understood as a broad risk area in relation to a country’s vulnerability to ML\u002FTF and its capacities to counter it.\n\nIn countries with low risks of ML\u002FTF thanks to strong legislation, high levels of media freedom and sufficient transparency – like Estonia – money laundering offences are clearly more likely to be uncovered than in countries with the opposite conditions. This can lead to the flawed perception that the country has more ML\u002FTF offences simply because they have been brought to light.\n\nA similarly flawed conclusion would be finding a rotten apple in a transparent container of apples, and thinking that apples in the transparent container are more likely to be rotten than apples in the closed container that nobody can inspect.\n\n### No country is free of money laundering risks\n\nEstonia's risk score of 2.68 out of 10 – where 10 equals the highest risk of ML\u002FTF – is still a risk.\n\nThere has never been, and never will be, a country with zero risk of money laundering. Why? Because corrupt officials and criminals are adept at finding ever new and clever ways to launder their proceeds of their crimes.\n\nAnd yes, there are systemic issues with Estonia’s AML\u002FCFT systems. Most of the money laundering scandals hitting headlines in the last two years, including the Danske Bank scandal, date back around 8–12 years and took place over long periods of time.\n\nThe cases raised serious systematic concern about the quality of supervision and effectiveness of public-private efforts related to AML\u002FCFT. They highlight why no country should become complacent when it comes to money laundering.\n\n### Long-term measures vs. short-term cover-ups\n\nWe can expect more money laundering schemes to be uncovered in the next years, including in countries generally regarded as low risk. Part of the reason why the recent scandals were uncovered is thanks to enhanced levels of investigative journalism and data sharing, accompanied by increased public demand for open information globally.\n\nCountries that respond to these positive trends and demands by increasing their levels of transparency and supervision, for example by creating transparent beneficial ownership registries, may see a short-term increase in the uncovering of money laundering schemes.\n\nWe can understand why governments fear lifting up their carpets and revealing what's underneath. But the alternative is to continue providing a hiding place for dirty money from criminals and organised crime networks, so we would encourage them to be brave.\n\n### Can one-off media reports and scandals be taken into account in the Basel AML Index?\n\nEach year the Basel Institute brings together external experts from a diverse set of AML, compliance and risk assessment backgrounds to review the methodology of the Basel AML Index for continued validity and adequacy, and to discuss trends in global AML regulation and practice that may impact its effectiveness.\n\nAt the [2019 review meeting](https:\u002F\u002Fwww.baselgovernance.org\u002Fbasel-aml-index\u002Fmethodology#7), one question discussed was whether the Basel AML Index could and should take into account case-based data on money laundering such as the Panama Papers, Paradise Papers, scandals such as the Danske Bank and Swedbank cases, and other investigations by investigative journalism associations such as the OCCRP.\n\nIt was decided not to include case-based data due to the following reasons:\n\n*   Time lags between real cases and detection. After a number of ML cases, some national regulators increased fines imposed on financial institutions for failing to enforce AML regulations. The resulting penalties were often imposed for transactions that happened many years previously. This huge time lag between real cases of AML misconduct and detection\u002Fsanctioning is problematic for an Index that is updated annually.\n*   No regular updates. ML\u002FTF cases in the media appear without any predictable regularity. It is impossible to provide updates to the data and to change positions of countries.\n*   Countries cannot demonstrate progress. Once a country is labelled a high-risk jurisdiction on the basis of its involvement in a ML media scandal, it is not possible for it to demonstrate progress in this area.\n\n### What other factors should be considered when assessing ML\u002FTF risk?\n\nIn the case of Estonia, the data in the Basel AML index does not reflect the risk of Estonia’s geographic proximity to Russia and the issues that may be associated with this. Estonia has been labelled as one of the first ports of entry for Russian money launderers wishing to gain access to the European financial market.\n\nTrade-based money laundering is another factor to take into consideration. The [FATF identifies three main methods](https:\u002F\u002Fwww.fatf-gafi.org\u002Fpublications\u002Fmethodsandtrends\u002Fdocuments\u002Ftrade-basedmoneylaundering.html) by which criminal organisations and terrorist financiers move money for the purpose of disguising its origins and integrating it into the formal economy: use of the financial system; physical movement of money (e.g. cash couriers); physical movement of goods through the trade system.\n\nThe Basel AML Index focuses mostly on the first two ways, with less coverage of financial crime facilitated by international trade. This is due to a lack of comparable data on trade-based money laundering. We are investigating data sources with a view to covering this aspect in future editions of the Basel AML index.\n\nAn [analysis of recent high-profile money laundering cases](https:\u002F\u002Fwww.baselgovernance.org\u002Fblog\u002Fwhat-can-we-learn-recent-money-laundering-cases), including the Danske Bank scandal, reveals several other red flags for money laundering that financial institutions and companies should take into account in addition to country risk. These include politically exposed persons (PEPs), non-resident legal persons and issues around shell companies in offshore jurisdictions.\n\n_Photo of Tallinn, Estonia by [Maria Geller](https:\u002F\u002Fwww.pexels.com\u002Fphoto\u002Fwhite-and-brown-concrete-building-1803860\u002F) from Pexels._","2019-09-25","how-can-estonia-have-the-lowest-risk-of-money-laundering-in-the-basel-aml-index-1003","How can Estonia have the lowest risk of money laundering in the Basel AML Index?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F9889a925-86e5-45f9-8100-7ebdb892a99a?width=1000&height=650&format=webp&quality=80",[],[169,170,122],[247,47],"Basel AML Index",[249,253],{"tags_id":250},{"id":251,"name":252},879,"Money laundering",{"tags_id":254},{"id":184,"name":185},1003,[169,192,122],[247,47],[259],1256,[],[23,247],[],"2022-05-26T22:55:57.000Z","2026-05-29T22:21:56.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-can-estonia-have-the-lowest-risk-of-money-laundering-in-the-basel-aml-index-1003",{"id":268,"body":269,"status":6,"type":34,"date":270,"slug":271,"title":272,"image":273,"countries":274,"topic":275,"activity":277,"tags":278,"nid":279,"topics":280,"activities":281,"authors":282,"images":284,"websites":285,"area":21,"programme":21,"language":21,"translations":286,"translation_of":21,"user_created":68,"date_created":287,"user_updated":134,"date_updated":135,"content":288,"link":289},9716,"In this article, Juhani Grossmann, IWT Team Leader at the Basel Institute on Governance, explores the role of public-private partnerships in tackling illegal wildlife trade (IWT).\n\nThis is the second article in our short series of perspectives on IWT and financial crime, in collaboration with the [International Academy of Financial Crime Litigators](https:\u002F\u002Fwww.financialcrimelitigators.org\u002F). \n\nWhite elephant or panacea? Public-private partnerships and their role in wildlife protection\n============================================================================================\n\nPublic-private partnerships (PPPs) have tremendous potential in areas where government might not have sufficient resources or know-how to implement an otherwise valuable project. Classic examples are large infrastructure undertakings, where government sees the need for its development, but is not able to commit the required funds.\n\nThe common risks associated with PPPs are that businesses aren’t able to recoup the funds invested and cut costs to the point where services provided are no longer sustainable. Too frequently, we find [huge PPP infrastructure projects abandoned.](https:\u002F\u002Fwww.sciencedirect.com\u002Fscience\u002Farticle\u002Fabs\u002Fpii\u002FS0957178718302546)\n\nIn the case of the illegal wildlife trade (IWT), some PPP challenges are not unique:\n\n*   difficulties in adequately reflecting both the government and the private partners’ interests in contractual language, including predicting long-term trends accurately;\n*   the ability to provide proper oversight over contracts once signed;\n*   unforeseen consequences.\n\n### Can conservation be a business?\n\nThe most visible IWT-specific PPPs relate to the commercial utilisation of wildlife resources through tourism. This frequently includes wildlife park management on behalf of the government by private entities, both non- and for-profit. Their sustainability is a challenge even in good times, with the biggest entity, African Parks, [relying for 86%](https:\u002F\u002Fwww.africanparks.org\u002Fsites\u002Fdefault\u002Ffiles\u002Fuploads\u002Fresources\u002F2019-07\u002FAFRICAN%20PARKS%20-%202018%20Annual%20Report%20-%20Digital%20-%20English%20-%20Final%20V3.pdf) of their needed resources on grant donations.\n\nPPPs also frequently provide vital services beyond the protection of wildlife and habitats for human communities surrounding protected areas, including employment opportunities, loan programs, educational and health initiatives, veterinary services, and conflict prevention and mitigation.\n\nAs with all PPPs, there are pluses and minuses. On the negative side, less scrupulous for-profit operations struggle with their stated conservation objectives or even function as a cover for poaching. On the positive side, [some for-profit consultancies](https:\u002F\u002Fconservation-capital.com\u002Fcase-studies\u002Fcollaborative-management-partnerships) are offering strategic advice to countries on how to manage their parks and maximise profits, while ensuring conservation goals are met.\n\n### No tourists, no protection?\n\nIn light of covid-19 and the almost complete stop of international tourist arrivals, the financial calculations underpinning the wildlife park management PPPs are crumbling. New revenue streams are actively being considered for both public and private park management. These include conservation bonds or the sale of commodities that might be co-located with protected wildlife, such as sand and non-protected plant species.\n\nAs these options are being considered, parks that are important from a conservation perspective, but had previously represented an insignificant contribution to tourism revenue streams, might become more financially viable. Unfortunately, the track record of extractive enterprises operating within and near protected areas or fragile landscapes has largely been unsatisfactory, including the facilitation and enabling of serious wildlife crime.\n\nAny such utilisation will thus have to be preceded by the herculean tasks of:\n\n*   a) strict and well-considered regulation\n*   b) a strengthening of government and civil oversight, as well as\n*   c) bolstering of internal and external anti-corruption defences.\n\n### Covid-19 supercharges reputational risk\n\nAn additional area where cooperation between the private and the public sector has proven exceptionally fruitful is [United for Wildlife](https:\u002F\u002Funitedforwildlife.org\u002F), a coalition of transport and financial firms who are determined to prevent traffickers from accessing their networks, without which they are unable to ply their trade. The members work actively with government (especially law enforcement agencies) to report wrongdoings.\n\nWe at the Basel Institute on Governance have been fortunate to be actively engaged in the process through operating the [information-sharing system](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Fspecial-analysis-how-covid-19-impacts-global-wildlife-trafficking) and see first hand the positive impact that such cooperation can have.\n\nWhile the partnerships are not overtly commercial in nature, members are certainly conscious of the legal and financial risk of IWT. The recent association of IWT with zoonotic diseases and thus covid-19 has caused the reputational risks for companies found to be facilitating the illegal wildlife trade to skyrocket.\n\n### Change is already happening\n\nEven before covid-19, transport firms have been excellent at collaborating through United for Wildlife with local law enforcement agencies to provide valuable information on illegal goods that pass through their logistical networks. Heathrow Airport, itself a PPP through operator BAA Limited, has been utilising data parsed from government seizures to develop an [AI-driven baggage screening system for illicit wildlife products](https:\u002F\u002Fwww.wisetechltd.com\u002Fcase-studies\u002Ftechnical).\n\nFinancial institutions, on the other hand, are increasingly sensitised towards transactions related to IWT and developing sophisticated models to identify and report those to financial intelligence units and other regulatory bodies. The [dismantling of the notorious Kromah trafficking network](https:\u002F\u002Fwww.cbsnews.com\u002Fnews\u002Fwildlife-heroin-trafficking-ring-africa-bust-southern-district-new-york-fish-and-wildlife\u002F) in East Africa was strongly supported by collaboration between law enforcement and financial institutions.\n\nThankfully, this collaboration has not suffered as a result of pandemic-related travel and meeting restrictions. Rather, the partners have quickly embraced the opportunities that technology provides and continue to collaborate actively to disrupt and dismantle criminal networks putting wildlife- and human- communities at risk.\n\n_To view the alternative perspective on this topic by Bruce Zagaris, Partner at Berliner Corcoran & Rowe, and Fellow of the International Academy of Financial Crime Litigators, see [The Academy's website](https:\u002F\u002Fwww.financialcrimelitigators.org\u002Fnode\u002F154) or [download the PDF](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-06\u002FPerspectives2_PPPsagainstIWT.pdf)._","2020-06-29","the-role-of-public-private-partnerships-in-combating-illegal-wildlife-trade-1787","The role of public-private partnerships in combating illegal wildlife trade","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F32b250c3-0d53-4895-850f-e91c1dd4aaa3?width=1000&height=650&format=webp&quality=80",[],[121,276,122],"Green Corruption",[47],[],1787,[121,276,122],[47],[283],1225,[],[23,121],[],"2022-05-26T22:54:42.000Z",[],"\u002Fresources\u002Fnews\u002Fthe-role-of-public-private-partnerships-in-combating-illegal-wildlife-trade-1787",{"id":291,"body":292,"status":6,"type":34,"date":293,"slug":294,"title":295,"image":296,"countries":297,"topic":298,"activity":299,"tags":300,"nid":306,"topics":307,"activities":308,"authors":309,"images":310,"websites":311,"area":21,"programme":21,"language":21,"translations":312,"translation_of":21,"user_created":68,"date_created":313,"user_updated":134,"date_updated":135,"content":314,"link":315},9520,"The [Wolfsberg Group](https:\u002F\u002Fwww.wolfsberg-principles.com\u002F) – an association of 13 global banks that develops frameworks and guidance to manage financial crime risks – became an [independent legal entity](https:\u002F\u002Fwww.wolfsberg-principles.com\u002Farticles\u002Fappointment-new-executive-secretary) in October 2021. Its new home is at the Basel Institute on Governance headquarters in Switzerland.\n\nWe are proud to host what continues to be a ground-breaking Collective Action against financial crime. Our role builds on our support for the Group over the last 21 years, since its first ever meeting at the historic Swiss castle, Château Wolfsberg.\n\nThe Wolfsberg Group’s new Executive Secretary, Alan Ketley, has been involved with the Group for most of his 19-year career in anti-money laundering compliance at European, US and Japanese banks. In this short interview, Alan explains how the Wolfsberg Group evolved, some important ways it has contributed to global financial crime risk management, and its members’ plans for the future.\n\n### The Wolfsberg Group is already an influential voice on the management of financial crime risks in banking – what are the benefits of becoming an independent legal entity?\n\nThe Wolfsberg Group has seen sustained and committed collaboration from the members ever since our first meeting in 2000, even without being a formal entity.\n\nSince publishing our first standard – the Wolfsberg Anti-Money Laundering (AML) Principles for Private Banking, [revised most recently in 2012](https:\u002F\u002Fwww.wolfsberg-principles.com\u002Fsites\u002Fdefault\u002Ffiles\u002Fwb\u002Fpdfs\u002Fwolfsberg-standards\u002F10.%20Wolfsberg-Private-Banking-Prinicples-May-2012.pdf)  – we have issued numerous principles, standards, guidance documents, questionnaires and FAQs on a wide range of topics relevant to know-your-customer (KYC), anti-money laundering (AML) and counter financing of terrorism (CFT) in the banking sector.\n\nUntil October, the Secretariat function was housed in one of its member banks (first UBS and then HSBC) and Tracy Paradise, of HSBC, provided fantastic leadership as Executive Secretary for 18 years. Yet establishing ourselves as a legal entity creates a more solid, sustainable and independent platform to consolidate our work for the future.\n\nOur new formal independence will help us to continue to act as a credible and authoritative private-sector voice in policy circles, and to strengthen the impact of our guidance on financial crime risk management among the 30,000 or so banks that exist around the world.\n\n### Why did you decide to house your Secretariat at the Basel Institute?\n\nThe Basel Institute is a natural home for the Wolfsberg Group. The Institute’s President Mark Pieth was present at the very first meeting of banks and civil society representatives. Hans-Peter Bauer, a co-founder of the Wolfsberg Group, is a former Board member of the Basel Institute and senior advisor to the Basel AML Index and related matters.\n\nImportantly, the Basel Institute’s [Collective Action](https:\u002F\u002Fbaselgovernance.org\u002Fcollective-action) team has continued to provide invaluable support and guidance to the Group during the last 21 years, including attending our annual forum and contributing substantively to some of the earlier documents. It has been an especially close relationship in the last few months as the Institute has taken on HR, IT and Finance Department support for the Wolfsberg Group, which has two staff located at the Steinenring office.\n\n### Who is in the Group and how do you interact?\n\nThe Wolfsberg Group represents 13 global banks, as listed on our [website](https:\u002F\u002Fwww.wolfsberg-principles.com\u002F). Those sitting around the table at our quarterly meetings are generally the heads of the banks’ financial crime compliance programmes and their deputies.\n\nThis size and seniority – 26 individuals with strong practical experience and decision-making power, plus the Secretariat – is our sweet spot right now. This is partly for practical reasons. Decisions are consensus-based, and members commit to aligning their own banks’ compliance programmes in accordance with the standards and guidance that we publish.\n\nOn a relationship level, Collective Action is all about trust and open discussion of shared problems, which you can achieve in this kind of collegial environment. Our meetings are always subject to strict competition law guidelines and do not include business staff, vendors, consultants or the press. The publications and comment letters we provide are focused on making financial crime compliance more effective and clearer, as befits an organisation of practitioners developing guidance for other practitioners and providing expert input to regulators and standard setters.\n\n### What achievements stand out over the last 21 years?\n\nIt seems incredible to say this now, with the close public and policy attention on banks and money laundering, and the billions of dollars of resources that banks spend every year on financial crime compliance programmes. But back in 2000, when the Group first met, I believe this was the first time that a group of bank representatives got together and acknowledged the benefit of collaborating to protect themselves and society from financial crime risks, rather than competing on the basis of looser compliance standards.\n\nThe [Collective Action approach](https:\u002F\u002Fbaselgovernance.org\u002Fb20-collective-action-hub) was also innovative back then. It has since become a globally recognised tool to address corruption challenges in and with the private sector, in large part thanks to the Basel Institute’s work in this area. But none of those at Château Wolfsberg thought of it as Collective Action – the members were purely focused on hammering out the Private Banking Principles and did not expect the collaboration to continue after the press conference in Zurich at which they were announced.\n\nBut continuing to interact in a sustained and controlled way over the next 20 years has allowed the Wolfsberg Group to shift the needle in some important matters affecting global financial crime risk management.\n\n### For example?\n\nOne example is our [Trade Finance Principles](https:\u002F\u002Fwww.wolfsberg-principles.com\u002Fsites\u002Fdefault\u002Ffiles\u002Fwb\u002FTrade%20Finance%20Principles%202019.pdf), which outlines the role of financial institutions in managing processes to address financial crime risks associated with trade finance activities. The Principles also aid compliance with sanctions, embargoes and UN requirements on the non-proliferation of weapons of mass destruction. We have updated these most recently in 2019, in cooperation with the International Chamber of Commerce and Bankers Association for Finance and Trade (BAFT). Several countries reference these in their regulations.\n\nAnother is our [Correspondent Banking Due Diligence Questionnaire](https:\u002F\u002Fwww.wolfsberg-principles.com\u002Fwolfsbergcb) or CBDDQ, the successor to the Wolfsberg AML Questionnaire. This [interview with Financial Crime News](https:\u002F\u002Fthefinancialcrimenews.com\u002Finterview-with-alan-ketley\u002F) explains the history and evolution of the questionnaire, which seeks to harmonise and increase the effectiveness of due diligence in correspondent banking relationships. After a complete update in 2016–18, and the effort and dedication of a standing committee, the questionnaire expanded from 28 to 110 questions. This expansion partly reflects the evolution of financial crime compliance since its first edition in 2004. as well expanding coverage from AML to include sanctions, anti-bribery and corruption, and other elements of a financial crime compliance programme.\n\nThe CBDDQ is now widely accepted by policy entities and banks as the de facto industry standard for reasonable (not minimum) due diligence in higher-risk correspondent banking relationships. Its accompanying guidance, FAQs, videos and other training materials provide a useful reference to banks in this area, especially smaller institutions with fewer internal compliance resources.\n\n### How else does the Wolfsberg Group contribute to financial crime risk management?\n\nWe also engage in dialogue with public-sector entities and policymakers. This includes submitting comments on behalf of the Wolfsberg Group to public consultations on changes to financial crime regulation, for example those issued by the Financial Action Task Force, the Financial Stability Board, the EU, UK and FinCEN. Our aim is to ensure that regulations on financial crime are as effective as possible and we have sought to define what “effectiveness” means. Thanks to our industry expertise, we can also identify when new policies might have unintended consequences.\n\nAs an aside, when the Wolfsberg Group first engaged in this form of policy dialogue and consultation (on the risk-based approach in 2004­–2005) it was in fact the first time that the FATF had consulted with the private sector at all.\n\nLooking ahead, financial crimes facing the banking sector have become increasingly complex, and the space is more and more contested. There are still lots of open questions in the financial crime sphere in which the Wolfsberg Group, through our discussions and contributions, can play a highly relevant role.\n\n### What’s on the agenda now?\n\nThe agenda is set by members, so priorities depend on what we are seeing on the ground.\n\nSome topics never go away – correspondent banking and payment transparency continue to require close attention.\n\nThe rise of new payment methods, including virtual assets, is also a hot topic, especially as regards payment service providers that are not regulated the same way as banks. This is not least because of the risk of dirty money flowing from the highly regulated banking sector to differently or unregulated new payment service providers.\n\nEnvironmental, social and governance (ESG) topics are also at the forefront of attention these days. The movement of money relating to crimes like trafficking in humans, wildlife, timber, etc., has long been illegal. Many of these problems are complex and really need Collective Action to treat them at source, involving all stakeholders including governments, financial institutions, other private-sector firms and civil society.\n\nThe concept of “effectiveness” is one that Wolfsberg will continue to pursue. This includes continuing efforts to define what it means, and by giving examples of where current practices are overly focused on technical compliance rather than the outcomes. We will also continue to submit responses to competent authorities as they seek to revise their thinking, such as our [response](https:\u002F\u002Fwww.wolfsberg-principles.com\u002Fsites\u002Fdefault\u002Ffiles\u002Fwb\u002FFinCEN%202021.0008%20Comments%20on%20RFI%20for%20modernising%20AML%20CFT%20regulations.pdf) to the US financial intelligence unit (FinCEN)’s request for information on how to modernise the country’s AML\u002FCFT regime.\n\n### Looking ahead\n\nOne question always on the agenda: “What keeps you up at night?” This question helps us keep a forward-looking approach. Criminals who engage in financial crime are smart. They read the same guidance documents and press releases. They pay attention to industry developments and have a strong incentive to evolve fast.\n\nWe believe the Wolfsberg Group, as an independent legal entity, will continue to play an important role in setting standards that help banks to address the risks of financial crime. It will also continue to provide a forum for key regulators to join the dialogue. We all need to keep up with the ongoing evolutions in the financial sector and contribute to building a harmonised, committed approach to financial crime risks.","2022-03-22","collective-action-in-banking-the-wolfsberg-groups-role-in-a-fast-evolving-industry-2202","Collective Action in banking: The Wolfsberg Group’s role in a fast-evolving industry","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F672086dc-b48c-46ef-80e7-bd332cd7a90c?width=1000&height=650&format=webp&quality=80",[],[169,121,122],[47],[301,303],{"tags_id":302},{"id":184,"name":185},{"tags_id":304},{"id":305,"name":121},909,2202,[169,121,122],[47],[],[],[23,121],[],"2022-05-26T22:51:54.000Z",[],"\u002Fresources\u002Fnews\u002Fcollective-action-in-banking-the-wolfsberg-groups-role-in-a-fast-evolving-industry-2202",{"left":317,"top":317,"width":318,"height":318,"rotate":317,"vFlip":319,"hFlip":319,"body":320},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>",1780676463228]