[{"data":1,"prerenderedAt":214},["ShallowReactive",2],{"topics-index":3,"topic-stories-defence-integrity-1":102,"topic-events-defence-integrity-1":104,"topic-publications-defence-integrity-1":106,"topic-news-defence-integrity-1":108,"topic-links":206},[4,13,28,33,42,50,60,64,73,79,86,98],{"slug":5,"name":6,"label":6,"total":7,"stories":8,"storyIds":9,"news":10,"publications":11,"events":12},"anti-money-laundering","Anti-Money Laundering",241,0,[],153,65,23,{"slug":14,"name":15,"label":15,"total":16,"stories":17,"storyIds":18,"news":25,"publications":26,"events":27},"asset-recovery-and-enforcement","Asset Recovery and Enforcement",677,6,[19,20,21,22,23,24],7,13,4,5,8,10,484,131,56,{"slug":29,"name":30,"label":30,"total":31,"stories":8,"storyIds":32,"news":31,"publications":8,"events":8},"basel-aml-index","Basel AML Index",38,[],{"slug":34,"name":35,"label":36,"total":37,"stories":8,"storyIds":38,"news":39,"publications":40,"events":41},"business-integrity-ethics-and-compliance","Business Integrity Ethics and Compliance","Business Integrity, Ethics and Compliance",411,[],325,51,35,{"slug":43,"name":44,"label":44,"total":45,"stories":8,"storyIds":46,"news":47,"publications":48,"events":49},"collective-action","Collective Action",364,[],269,79,16,{"slug":51,"name":52,"label":52,"total":53,"stories":54,"storyIds":55,"news":20,"publications":58,"events":59},"corruption-prevention-and-public-governance","Corruption Prevention and Public Governance",136,3,[17,56,57],9,11,118,2,{"slug":61,"name":62,"label":62,"total":22,"stories":8,"storyIds":63,"news":22,"publications":8,"events":8},"defence-integrity","Defence Integrity",[],{"slug":65,"name":66,"label":66,"total":67,"stories":68,"storyIds":69,"news":70,"publications":71,"events":72},"green-corruption","Green Corruption",235,1,[24],116,58,60,{"slug":74,"name":75,"label":75,"total":76,"stories":59,"storyIds":77,"news":78,"publications":8,"events":8},"learning-and-training","Learning and training",228,[20,21],226,{"slug":80,"name":81,"label":82,"total":83,"stories":8,"storyIds":84,"news":85,"publications":72,"events":56},"prevention-research-and-innovation","Prevention Research and Innovation","Prevention, Research and Innovation",195,[],126,{"slug":87,"name":88,"label":88,"total":89,"stories":17,"storyIds":90,"news":96,"publications":97,"events":54},"public-financial-management","Public Financial Management",84,[91,92,93,94,95,49],17,18,12,14,15,47,28,{"slug":99,"name":100,"label":100,"total":95,"stories":59,"storyIds":101,"news":17,"publications":19,"events":8},"ukraine","Ukraine",[20,17],{"items":103,"total":8},[],{"items":105,"total":8},[],{"items":107,"total":8},[],{"items":109,"total":22},[110,133,148,171,187],{"id":111,"title":112,"slug":113,"date":114,"type":115,"language":116,"topics":117,"body":118,"image":119,"tags":121,"translations_news":130,"translations":131,"content":132},10618,"Operational credibility is a strategic asset in the defence industry. What does that mean for Ukraine and its partners?","operational-credibility-is-a-strategic-asset-in-the-defence-industry-what-does-that-mean-for-ukraine-and-its-partners-2965","2026-05-13","Blog","English",[100,62],"_Europe’s defence sector is changing fast. More money, political attention and international partnerships are flowing into the industry. At the same time, defence companies face growing pressure to show not just what they produce, but how they operate._ \n\n_In this blog, Yuliia Brusko explores why transparency and operational credibility are becoming more important – especially for Ukraine’s wartime-built defence industry. The article builds on the Basel Institute’s ongoing work in Ukraine, including with defence-sector stakeholders on governance, integrity and operational resilience under wartime conditions._ \n\n## Defence companies are entering a new era of scrutiny\n\nEuropean defence companies are attracting unprecedented levels of capital, political attention and strategic relevance. Yet alongside this growth comes a level of external scrutiny many firms were never built for.\n\nA recent public dispute involving Czech defence company Czechoslovak Group (CSG) illustrates this shift. A [report](https:\u002F\u002Fhntrbrk.com\u002Fcsg\u002F) published by Hunterbrook Media questioned aspects of CSG’s production claims, business model and corporate structure. Among other issues, the report raised questions about the transparency of certain ownership and subsidiary structures, the company’s reliance on intermediary and external procurement arrangements, and the extent to which publicly communicated production and business claims could be independently substantiated by external actors. \n\nWhile the company strongly [rejected](https:\u002F\u002Fcsg.com\u002Fen\u002Fnews\u002Fcsg-sets-the-record-straight-in-response-to-short-seller-allegations) the allegations, the case reveals a broader structural change: the increasing demand for operational verifiability.\n\nIn the booming defence industry, investors, procurement actors and international partners are no longer relying on growth narratives or high-level political positioning. Increasingly, they are trying to independently verify how companies actually operate, including: \n\n*   Where key dependencies sit\n*   How production is organised\n*   Whether public claims align with realities\n\nThis shift is partly driven by the changing structure of the defence market itself. Alongside traditional defence primes, the sector now includes rapidly scaling private manufacturers, drone producers and venture-backed technology firms. \n\nMany are entering international financing and export ecosystems that expect a level of operational accountability historically uncommon in parts of the defence sector.\n\n## Bridging wartime pragmatism and market expectations in Ukraine\n\nThis demand for clarity creates a unique challenge for Ukraine’s defence industry. Developed under wartime conditions, Ukrainian companies have prioritised speed, adaptability and survivability over externally defensible corporate structures. \n\nDistributed manufacturing, fragmented supply chains and parallel operational entities are practical wartime adaptations, not signs of weak governance.\n\nHowever, as the sector seeks deeper integration with European partners, these same features can create friction. Documentation and traceability systems built under the urgency of survival often struggle to meet the requirements of international financing and export ecosystems.\n\nThe problem is not necessarily the complexity or the inherent opacity of these arrangements; it is the inability to credibly explain and defend them to external stakeholders who can no longer rely on informal trust alone.\n\n## Operational credibility is becoming a strategic requirement\n\nAs scrutiny becomes more operational, companies are increasingly assessed not only on what they produce, but on whether their operational realities can withstand external examination. When structures are too opaque to confidently assess, perceived risk can outweigh strategic value.\n\nThis creates pressure not only for Ukrainian manufacturers, but also for European defence companies navigating a rapidly changing market. For those seeking long-term integration into international financing, procurement and partnership ecosystems, the ability to defend operational realities is becoming a core business capability.\n\n## A shift from trust-based networks to verifiable systems\n\nThe transition from relatively closed government and industry networks toward a more financialised and internationally interconnected market is reshaping how defence companies are assessed. Shifting to this next step is crucial as deftech companies move from niche producers to systemically important security providers. As their technology increasingly moves independently from the large defense primes, the obvious question arises of “going it alone.” While technologically, the choice is obvious, providing sufficient assurance for direct competitive government procurements will require solid systems. \n\nThe challenge is not eliminating operational complexity or wartime opacity. In many cases, these are unavoidable features of how modern defence industries function under pressure. The challenge is whether companies can credibly explain and defend those realities once they enter ecosystems built around external review, institutional accountability and sophisticated due diligence.\n\nFor many defence companies, this will require the ability to clearly explain aspects like: \n\n*   How production is organised\n*   How supplier and partnership structures operate in practice\n*   How key decisions are documented under wartime conditions\n*   How public production claims can be substantiated when questioned by investors, procurement actors or international partners. \n\nThis is likely to require more structured approaches to documentation, traceability and internal oversight – not to replicate peacetime bureaucracy, but to ensure that wartime realities can be credibly defended when scrutiny arises.\n\n## Adaptability alone will no longer be enough\n\nIn this environment, the ability to combine wartime adaptability with institutional credibility may increasingly determine which companies are able to scale, attract financing and secure long-term positions within international markets.\n\nThis increases the importance of building credible systems for transparency, documentation, internal oversight and operational accountability in individual companies and across the defence ecosystem. \n\nAchieving this is no easy task. It will require sustained cooperation between Ukrainian defence companies, international partners, investors, procurement actors and policymakers – indeed, any actor keen to see Ukraine’s phenomenal defence capabilities more deeply integrated into international markets and partnerships. \n\nAt the Basel Institute, we are increasingly working directly with Ukrainian defence companies and their associations to strengthen compliance on an individual or collective basis and welcome new partners. \n\n_The Basel Institute's work on Ukraine's defence integrity is supported by Norway. This blog represents the views of the author only._",{"id":120},"6e5fbb34-c87f-4281-94cb-55f2cd75b3a0",[122,126],{"tags_id":123},{"id":124,"name":125},1113,"Infrastructure",{"tags_id":127},{"id":128,"name":129},1376,"Defence and security",[],[],[],{"id":134,"title":135,"slug":136,"date":137,"type":115,"language":116,"topics":138,"body":139,"image":140,"tags":142,"translations_news":145,"translations":146,"content":147},10600,"Europe's defence windfall: will it survive the corruption test?","europes-defence-windfall-will-it-survive-the-corruption-test-2931","2026-02-18",[62],"_Reflections by Francesca Grandi, PhD (Transparency International Defence & Security), Elizabeth Andersen and Juhani Grossmann (Basel Institute on Governance) from the Munich Security Conference 2026._\n\nEurope’s ambitious defence spending plans will only pay off if corruption risks are taken seriously. At our joint roundtable at the Munich Security Conference, industry and political leaders agreed: transparency and strong anti-corruption safeguards are essential if higher spending is to deliver technological innovation, real security gains and voter trust. It is time to place integrity at the centre of Europe’s defence agenda.\n\nAt the 2026 Munich Security Conference, political leaders spoke with urgency about readiness, deterrence, industrial capacity and the need to mobilise unprecedented levels of public and private financing. The tone was sober, the geopolitical risks real and the commitments delivered with a sense of urgency. \n\nThe presence of the defence industry was impossible to miss. Private sector actors were actively engaged in shaping the debate, not only across panels and more informally, but also with a [gigantic billboard](https:\u002F\u002Fwww.gettyimages.nl\u002Fdetail\u002Fnieuwsfoto%27s\u002Fan-advertisement-for-helsing-gmbh-near-the-venue-for-the-nieuwsfotos\u002F2260760403) “We Got This” directly in front of the conference venue. \n\nWhat we _didn’t_ get was much focus on governance.\n\n## With money comes responsibility – and corruption risks\n\nEurope’s defence architecture is being reshaped at historic speed and scale. As we convened our joint [roundtable](https:\u002F\u002Fti-defence.org\u002Fti-ds-munich-security-conference-2026\u002F), _Get the Balance Right: Capability, Integrity and Effectiveness in Europe’s Emerging Defence Architecture_, one theme stood out: this build-up is vital to European security. But it is also a systemic governance test.\n\nThe scale of financing under discussion is enormous. Meeting Europe’s defence commitments is estimated to require additional financing of around 2 percent of EU [GDP](https:\u002F\u002Fwww.ecb.europa.eu\u002Fpress\u002Fblog\u002Fdate\u002F2025\u002Fhtml\u002Fecb.blog20250725~f26b4ef0f3.en.html). At this magnitude, even small governance gaps could translate into billions lost to misallocation, corruption, or fraud. Governance infrastructure must scale in line with spending.\n\nAccelerated procurement, emergency procedures and exceptional budgetary tools are being justified with the urgency of the task, which is understandable. But without enhanced safeguards, they risk:\n\n*   heightening fragmentation, overpricing, undue influence, and fiscal distortion; \n*   weakening transparency and reducing opportunities for civic monitoring; and \n*   limiting the parliamentary and independent oversight that is necessary to maintain the democratic legitimacy of defence investments.\n\n## More spending doesn’t mean more security\n\nThe lesson from past [crises](https:\u002F\u002Fwww.cambridge.org\u002Fcore\u002Fjournals\u002Fjournal-of-public-policy\u002Farticle\u002Fcan-bigger-health-budgets-cushion-pandemics-an-empirical-test-of-covid19-deaths-across-the-world\u002F34DA705F15995903F26A72C4E33C9DDE) is clear: spending more does not automatically deliver more security. Defence build-up without governance produces predictable and avoidable [risks](https:\u002F\u002Fti-defence.org\u002Fgdi\u002F). Transparency and oversight are not luxuries – they are force multipliers.\n\nThis is not a marginal issue. Weak governance undermines defence readiness as surely as underinvestment does. It erodes public trust. It fuels political polarisation. It creates openings for foreign interference and [strategic corruption](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fqg37). And it risks turning today’s security investments into tomorrow’s legitimacy crises.\n\nAcross panels and side conversations, we repeatedly heard that “the money is there.” What remains contested is how to spend it wisely. How to balance speed with scrutiny? How to ensure that urgent injections of capital do not come at the expense of robust internal controls? How can transparent spending foster flexibility and innovation in defence technology?\n\n## Acknowledging the problem is the first step to solving it\n\nAt our event in Munich, participants spoke candidly about the tension between scaling production and modernising compliance systems, the political consequences of potential scandals and the perceived trade-offs between oversight and urgency. \n\nIn separate [conversations](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fukraines-place-europes-defence-industry-could-compliance-catalyse-integration), Ukrainian partners described the dual challenge of mobilising wartime production at the same time as they are strengthening anti-corruption standards, all the while living and working under existential threat. \n\nOne structural risk clearly stands out: no single authority is responsible for safeguarding integrity across Europe’s evolving defence ecosystem.\n\nBut how do we embed integrity into the EU's defence architecture?\n\n*   First, protect a transparency baseline, even under urgency. Accelerated procedures cannot mean suspended scrutiny. Parliamentary access to information, audit trails, and structured civilian oversight must remain operational. Where secrecy is required, tailored transparency can still reinforce accountability, especially when normal procurement rules are set aside. \n*   Second, hardwire integrity into new defence financing tools. From day one, EU and national instruments should require machine-readable procurement data, beneficial ownership disclosure, conflict-of-interest controls, and interoperable oversight systems. \n*   Third, regulate influence where money and policy meet. Public–private cooperation should not blur lines of accountability. As industry access expands, so must lobbying transparency, cooling-off periods, and enforceable revolving-door rules. \n*   Fourth, align regulation with effectiveness. Smart, predictable standards reduce risk premiums, limit market distortion, and create fair entry points to stimulate innovation.\n*   Fifth, designate a clear political authority responsible for governance of Europe’s defence architecture. A harmonised anti-corruption framework requires defined leadership. Otherwise, oversight will continue to fall between institutions and funding mechanisms.\n\n## Is Europe serious about governance and democratic accountability?\n\nMSC 2026 demonstrated that Europe is serious about rearmament. The question now is whether it is equally serious about governance.\n\nEuropean citizens will only support sustained defence spending, and the social trade-offs that come with it, if they trust that resources are used strategically and with integrity. That trust can only be secured through robust oversight, transparency, and accountability. \n\nIf we are committed to long-term security – beyond the announcements and beyond Munich – then integrity must move from the margins to the centre of the agenda.\n\nThe task ahead is clear: get the balance right, and make governance a core pillar of Europe’s emerging defence architecture.\n\n_We are grateful to Norway for supporting this roundtable and [related programming](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fstrengthening-integrity-ukraines-natural-resources-energy-and-defence-sectors-norways-support)._\n\n_This blog and additional photos are also published on the Transparency International Defence & Security website [here](https:\u002F\u002Fti-defence.org\u002Feuropes-defence-windfall-will-it-survive-the-corruption-test\u002F)._",{"id":141},"737092c2-e1b7-4580-ab14-4ce24e90ee8d",[143],{"tags_id":144},{"id":128,"name":129},[],[],[],{"id":149,"title":150,"slug":151,"date":152,"type":115,"language":116,"topics":153,"body":154,"image":155,"tags":157,"translations_news":168,"translations":169,"content":170},10578,"Ukraine’s place in Europe’s defence industry: could compliance catalyse integration?","ukraines-place-in-europes-defence-industry-could-compliance-catalyse-integration-2868","2025-11-06",[100,62],"_Ukraine is already central to Europe’s security. Its defence manufacturers are increasingly eligible for participation in the rapidly growing EU defence procurements. However, unless Ukraine’s defence manufacturers are able to meet strict EU anti-corruption and ESG standards, they risk being shut out of EU supply chains. Europe needs Ukraine’s battlefield-tested innovation and production capacity, yet compliance gaps and unclear expectations are slowing integration. Juhani Grossmann, who leads the Basel Institute’s anti-corruption programme in Ukraine, explains how joint actions to overcome compliance barriers can help secure Ukraine’s place in Europe’s defence ecosystem and strengthen our collective security._\n\n## Ukraine’s central role in EU defence\n\nThe last three and a half years have been hard fought in Ukraine. Ukrainian resilience on the battlefield is legendary. The unparalleled military support from Ukraine’s allies, fused with its own relentless technical innovation, have forged bonds that could define Europe’s emerging security infrastructure.\n\nDaring political decisions by Ukraine and its allies have hastened this integration. Among them: the European Union has adopted the Security Action For Europe ([SAFE](https:\u002F\u002Fdefence-industry-space.ec.europa.eu\u002Feu-defence-industry\u002Fsafe-security-action-europe_en)) mechanism, using its combined fiscal firepower to raise low-cost loans on capital markets to encourage joint military procurement.\n\nSAFE explicitly includes Ukrainian firms in its stringent corporate and sourcing geographical origin requirements, which are designed to stimulate a native European defence industry. This recognises both Ukraine’s ongoing contribution to Europe’s security and the value of the country’s combat-driven technical innovations. From this angle, Ukraine’s defence industry is now even more critical to the EU than the UK, historically the continent’s dominant player.\n\n## Europe is vulnerable – but can’t meet its demand for defence hardware\n\nThe United States’ interest in taking responsibility for European and global security is waning, while Russia continues to probe Europe’s hard and soft defences.\n\nFeeling justifiably vulnerable, European nations have therefore committed to a huge increase in defence spending, which could reach [EUR 2 trillion](https:\u002F\u002Fwww.consilium.europa.eu\u002Fen\u002Fpolicies\u002Fdefence-numbers\u002F) over the next five years.\n\nYet EU defence industry leaders struggle to manufacture defence equipment in sufficient quality and quantity to meet the unprecedented demand and lack the battlefield-tested innovations that are at the core of Ukraine’s industry.\n\n## Ukraine could help meet demand for military equipment\n\nPartly due to the above dynamics, deep public debates are taking place in Ukraine about lifting a _de facto_ ban on the export of military goods in place since the full-scale invasion. The government is establishing [defence production offices in Berlin and Copenhagen](https:\u002F\u002Fkyivindependent.com\u002Fukraine-to-open-defense-production-offices-in-berlin-copenhagen-this-year-zelensky-says\u002F) to facilitate limited export.\n\nThis sounds counterintuitive, considering the devastating shortage of materiel at the front. Yet the truth is: Ukraine’s military is simply unable to afford all the weaponry that its manufacturers can deliver. So, the economic argument for export is strong:\n\n*   Selling excess capacity for a profit could generate significant revenue.\n*   That revenue could be used for economies of scale in production as well as for research and development.\n*   The resulting taxes would allow the state to increase the procurement of materiel for its own troops.\n\nIn a confirmation of the compelling market forces, Ukrainian drone manufacturers have started investments in Europe to set up production outside of Ukraine.\n\nThey certainly have products that would be marketable: their innovation has resulted in weekly software updates and continued hardware improvements. The more traditional howitzers, tanks and armoured personnel carriers are cost competitive and highly scalable. Battlefield command and control software is reported to be top notch.\n\n## What could derail Ukraine’s integration in EU defence markets\n\nOn the surface, the pieces of the puzzle of European defence are aligning neatly. But one major obstacle needs to be cleared for a healthy and thriving trade: Ukrainian defence manufacturers must meet EU standards on anti-corruption compliance and related environmental, social and governance (ESG) matters.\n\nThese include issues such as sustainable sourcing of aviation fuel, employee protections and human rights across the supply chain, as well as good governance of these topics. They also include regulations and standards on integrity and anti-corruption.\n\nThe defence sector globally is struggling to meet many of these requirements. And Ukraine’s fast-growing innovators have understandably not prioritised such matters over the wartime need to deliver at speed.\n\nWithout a rapid move to address this shortfall, Ukraine’s innovators could be shut out from European markets. The EU defence industry – and its citizens – would in turn be deprived of crucial expertise, leaving all allies weaker and poorer. Temptations would mount to soften standards, as is already the case with [fiscal probity requirements](https:\u002F\u002Fwww.consilium.europa.eu\u002Fen\u002Fpress\u002Fpress-releases\u002F2025\u002F10\u002F10\u002Feconomic-governance-council-approves-germany-s-fiscal-expenditure-path-and-its-flexibility-to-increase-defence-spending\u002F) when it pertains to military spending.\n\nThat would be a mistake for both Ukraine and its European allies. Instead, overcoming these challenges could be a boost for both the EU and the Ukrainian defence industry and further cement their partnership.\n\n## Robust internal controls bring many benefits\n\nThe measures required to attain EU standards on anti-corruption compliance and related ESG topics are no doubt arduous. Solid internal control systems, which can produce verifiable data, will need to be established.\n\nBut that brings solid benefits. Information from internal control systems will help to convince customers that the products they are literally entrusting their lives to are reliable, safe and effective. It will provide the basis for ESG reporting in future.\n\nAnd while the effectiveness of Ukraine’s defence systems is convincingly demonstrated through frontline usage, as its defence industry matures, it could greatly benefit from the efficiencies that robust internal control systems bring. \n\n## Challenges meeting EU regulations\n\nEuropean defence firms are eager to work with Ukrainian partners, yet are finding it difficult to meet their own regulatory obligations at the same time. We see several reasons for this:\n\n*   Sourcing of components is swift, creative and results driven. Without control systems, companies might struggle to verifiably certify their ability to meet the SAFE requirement that 65 percent of the weapon’s value must originate from EU\u002FEEA\u002FEFTA member states or Ukraine.\n*   Corporate ownership structures in Ukraine can be challenging for due diligence – particularly when it comes to establishing ultimate beneficial owners of companies.\n*   There is a lack of consensus on what good anti-corruption and ethics policy implementation looks like. This leaves Ukrainian partners unsure of the priorities, direction and speed of any required internal reforms.\n*   Track and trace measures are insufficiently robust. This makes it hard to reliably avoid sanctions violations in the procurement of components and to ensure environmentally sustainable sourcing of raw materials.\n*   Wartime lack of physical access to sites makes traditional verification mechanisms impossible.\n\nThese obstacles are formidable and have the potential to threaten otherwise promising partnerships.\n\n## There is a joint path forward\n\nThankfully, we see a strong desire on both sides to navigate a path through these obstacles.\n\n*   Reforms are progressing fast. Ukrainian Defence Industry, the holding company for the majority of state-owned defence manufacturers, has made impressive strides in adopting reforms at the top level. It is gradually cascading these down to the 50+ companies under its purview, including the producers of such notable products as the _Lyutii_ drone, the _Neptune_ subsonic cruise missile_,_ the _Bohdana_ howitzer and the _Stugna_\u002F_Skif_ anti-tank missile. While a long road remains to reform these highly traditional producers, the political will and technical capacity at the top are formidable.\n*   Anti-corruption policies are being implemented. The more established private manufacturers are increasingly adopting and publicising ethics and anti-corruption policies. They are also implementing and developing channels for reporting violations of integrity standards, and organising contractual activities based on ethical and compliance requirements.\n*   Engagement is strengthening. European manufacturers, who act as both suppliers and potential customers, are keen to engage more closely with their existing or potential Ukrainian partners to smooth the compliance obstacles as their relationships develop. These manufacturers are also keen to bolster their own contextual understanding of the operating environment in Ukraine, allowing them to manage the reputational and legal risks more professionally.\n*   Corruption is being investigated and prosecuted. Ukraine’s National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO) are making significant headway in pursuing officials and company representatives who are willing to use criminal behaviour, including corruption, to personally benefit from wartime deprivations.\n*   Risk prevention measures are underway. The National Agency on Corruption Prevention (NACP) is leading the process of conducting a comprehensive risk assessment in the defence sector.\n*   International support is there. Increasingly, Ukrainian and international policy and advisory supporters are engaging in the sector. This includes the International Forum on Business Ethical Conduct for the Aerospace and Defence Industry ([IFBEC](http:\u002F\u002Fifbec.info\u002F)), NATO’s [Building Integrity](https:\u002F\u002Fwww.nato.int\u002Fcps\u002Fen\u002Fnatohq\u002Ftopics_68368.htm) programme and Norway’s Centre for Integrity in the Defence Sector ([CIDS](https:\u002F\u002Fwww.regjeringen.no\u002Fen\u002Ftopics\u002Fdefence\u002Fcentre-for-integrity-in-the-defence-sector-cids\u002Fid3114785\u002F)). The Basel Institute on Governance has recently commenced efforts in this space through funding from Norway.\n\nTogether, these efforts have the potential to make significant progress in overcoming obstacles.\n\n## How to accelerate progress\n\nWhile progress is happening, it is still insufficient given the urgency of the security situation in Europe. That is why we propose the following five catalysts:\n\n*   Set clear compliance requirements. EU member states at the forefront of defence procurement should spell out their internal control and anti-corruption requirements in plain and detailed terms. This would enable Ukrainian firms to participate in projects, either in collaboration with EU partners or independently. Providing early support and education would help potential Ukrainian partners meet these standards quicker.\n*   Improve implementation and verification systems. Industry associations should strengthen their anti-corruption standards and\u002For guidance by creating clear systems for implementation, verification and measurement.\n*   Allow time to comply. Companies should share their subcontracting compliance requirements with prospective partners well ahead of procurement deadlines, and work with them to build the systems needed to meet these standards.\n*   Share risk insights. Independent corruption risk assessment findings in the defence manufacturing sector, in both Europe and Ukraine, should be shared widely within the professional community.\n*   Collective integrity standards. Private manufacturers in Ukraine should create joint anti-corruption standards, ideally through a [Collective Action](https:\u002F\u002Fcollective-action.com\u002F) approach – i.e. involving all relevant stakeholders working together in a trust-based environment over a sustained period of time. This would help stop individual companies using corrupt practices while others play fair, and reduce compliance costs for individual companies.\n\nAt the Basel Institute we are proud to continue and expand our work in this space with the generous support of Norway. We welcome partners to join these efforts and help ensure Ukraine’s defence innovation becomes a permanent pillar of Europe’s security.",{"id":156},"c5b007eb-82d5-4cda-a6e1-773cfa16ad5d",[158,160,164],{"tags_id":159},{"id":128,"name":129},{"tags_id":161},{"id":162,"name":163},982,"Anti-corruption",{"tags_id":165},{"id":166,"name":167},1303,"Environment",[],[],[],{"id":172,"title":173,"slug":174,"date":175,"type":115,"language":176,"topics":177,"body":178,"image":179,"tags":181,"translations_news":184,"translations":185,"content":186},10421,"The changing face of corruption and security: Munich Security Conference 2024","the-changing-face-of-corruption-and-security-munich-security-conference-2024-2588","2024-02-21",null,[62],"Corruption was on the main programme of the [Munich Security Conference](https:\u002F\u002Fsecurityconference.org\u002Fen\u002F) on 16–18 February 2024 for the first time.\n\nGretta Fenner, Managing Director of the Basel Institute on Governance, moderated a panel discussion featuring Bernardo Arévalo, President of Guatemala, Nikolai Denkov, Prime Minister of Bulgaria, Ketakandriana (Ke) Rafitoson, Vice Chair of Transparency International and Sheldon Whitehouse, U.S. Senator and Chairman of the Senate Committee on the Budget.\n\nThe main challenge in Gretta Fenner’s closing words, referring to the theme of this year’s [conference report “Lose-Lose](https:\u002F\u002Fsecurityconference.org\u002Fpublikationen\u002Fmunich-security-report-2024\u002F)”:\n\n> If we do not understand, acknowledge and then act accordingly in relation to the critical role of corruption undermining everything to do with stability, global governance and international law, we will have a lose-lose situation. And we cannot allow that to happen.\n\n## Beyond classical corruption\n\nThe Munich Security Conference's decision to include corruption as a “spotlight” in the conference programme, together with other non-traditional security topics such as sexual violence, climate finance and mineral supply chains, was highly welcome. It coincides with a rise in recognition and concern over strategic or \"weaponised\" corruption as a threat to national, regional and global security and peace.\n\nAs Fenner emphasised at the outset, corruption even in the narrow sense of bribery must be of great concern to the defence and security community. When kickbacks or other bribery schemes lead to the purchase of the wrong military equipment, to the construction of substandard infrastructure, or to half the ordered ammunition missing, it has direct and potentially deadly consequences.\n\nWhat we must also talk about more is the use of corruption for longer-term (geo) strategic goals. In other words, when corruption is used as an instrument – indeed a weapon – of power and influence at home and abroad. And when, as a consequence, it completely evades and thereby undermines global governance and international law.\n\nThe result, in the words of Ke Rafitoson, is _“an escalation of violence and conflicts around the world.”_ Corruption has long been seen as a _“soft governance”_ issue, she said, but now: \n\n> We have to recognise that corruption has become a global threat.\n\n## Vicious cycle: state capture and transnational organised crime\n\nTake just about any case of state capture – when power is consolidated in the hands of a few elites, who misuse state institutions to serve their own narrow purposes – and you can trace how [corruption is wielded as a highly functional tool](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fhow-strategic-corruption-fuels-insecurity-affecting-power) to gain and preserve power and influence.\n\nThat pattern is clearly visible in Guatemala, where President Arévalo’s recent election success owes much to popular unrest over corruption and to his personal anti-corruption campaigning. Corruption has penetrated every arm of the state over the last 20 years, he explained. Money stolen through corruption is used to empower criminal elites, who then further capture the political system in order to extract more rents – and on it goes in a vicious circle.\n\nThat has serious implications on peace and stability far beyond Guatemala as it emboldens and empowers transnational organised crime, he said, including the trafficking of drugs, humans and wildlife.\n\n> When you have corrupt officials, they are quite open to the type of big-money incentives that transnational organised crime can put on the table. On the other hand, transnational organised crime is interested in pushing politicians into office.\n\nIn the end, you find the entire governance of countries is in the hands of corrupt actors and of criminal groups. Driven by the transnational nature of organised crime, this can quickly lead to entire regions descending into a vicious circle of illegitimate governance and crime, and eventually into ever greater instability and violence.\n\n## Control over critical sectors\n\nMuch concern over strategic uses of corruption for geopolitical purposes also centres on foreign states gaining influence over sectors that are critical for sovereignty, security and stability, such as energy, water and minerals. Historical links and geographical proximity to kleptocratic states increase a country’s vulnerability.\n\nBulgaria has recently struggled with exactly that phenomenon. Noting parallels with Guatemala’s experience of state capture and organised crime, Prime Minister Denkov emphasised that corruption was not just used as a way for individuals to make money for narrow personal gain:\n\n> Along with classical corruption schemes, you have another type of corruption at a huge scale that affects all aspects of our lives.\n\nRussia-related energy deals in Bulgaria have wasted more than a billion euros, Denkov said, and resulted in little except total energy dependence on the aggressive autocratic Russian regime. It is clearly a security concern when corrupt deals result in a foreign state gaining power over critical sectors such as energy – not least when they involve sensitive installations such as nuclear power plants.\n\nOn the positive side, an anti-corruption focus is leading Bulgaria towards a much brighter future, not only in terms of its energy independence but also more broadly in terms of the quality of its governance, of rule of law and of its role in protecting the Euro-Atlantic alliance. In the last two years, with parties in government who subscribe to the fight against corruption, the country has succeeded in removing oil and gas dependence with strategic and transparent energy arrangements. It is also working persistently towards freeing other sectors from state capture.\n\nBulgaria’s example shows how political commitments to transparency, participation and anti-corruption can help countries loosen the grip of corrupt states on sectors critical to their security.\n\n## How anti-corruption and security communities can join forces\n\nAnti-corruption and defence\u002Fsecurity communities often work in bubbles, but closer collaboration could bring benefits to both sides.\n\n### Anti-corruption tools and knowledge\n\nDespite legitimate concerns about foreign power and influence through corruption, it’s not helpful to see corruption purely as a foreign threat. Many countries need to do more to prevent corruption and illicit financial flows _domestically,_ since these ultimately threaten both their own and global security.\n\nTried and tested anti-corruption tools are essential to get one’s own house in order. Senator Whitehouse gave a powerful description of how the U.S. introduced a series of anti-corruption reforms following the realisation that:\n\n> We were the problem. The greatest location for hiding corruptly obtained assets was the United States of America. So we began to take that apart.\n\nApart from basic transparency measures like beneficial ownership registers, priorities for many states should include cracking down on enablers such as unscrupulous lawyers and accountants. These are often based in high-income jurisdictions but are key to [enabling corruption in other countries](https:\u002F\u002Fwww.transparency.org\u002Fen\u002Fpublications\u002Floophole-masters).\n\nSenator Whitehouse also testified to the usefulness of working with civil society in devising and implementing the anti-corruption reforms.\n\nLikewise, in general security policy making could benefit greatly from the knowledge and analysis of specialist anti-corruption organisations whose understanding of connections between corruption and security, and related data, facts and [reports](https:\u002F\u002Fti-defence.org\u002F), can support security-related decision making.\n\n### Embedding anti-corruption across the functions of state\n\nBeyond applying tools in specific areas, panellists concluded that states need to embed anti-corruption as a strategic priority across all aspects of security in its widest sense – from procurement to peace building to the development of strong and independent institutions.\n\nThe [U.S. designation of corruption as a core national security issue](https:\u002F\u002Fwww.whitehouse.gov\u002Fbriefing-room\u002Fpresidential-actions\u002F2021\u002F06\u002F03\u002Fmemorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest\u002F) has helped to _“put corruption higher up the agenda,”_ said Senator Whitehouse. This is vital because, as President Arévalo also emphasised:\n\n> We were used to corruption being a problem of bad administration…. Now we are seeing political criminal cliques organising to take control of state institutions in order to make them work for corruption. This is a fundamental threat to the viability of democratic states. It is beyond a threat to the security establishment.\n\nUkraine’s experience also shows that anti-corruption needs to be elevated as a core and state-wide security issue. Reacting to the panel discussion, Ukrainian anti-corruption activist Hanna Hopko explained that while Ukraine has made significant progress on fighting corruption since the 2014 Maidan Revolution, the illegal invasion of Ukraine by Russia has propelled corruption to the top of the country’s priorities:\n\n> Russia’s aggression against Ukraine has redefined the struggle against corruption. In the past, we considered the fight against corruption to be about… eliminating kickbacks, \\[money laundering in\\] offshore jurisdictions, vanity construction projects… \\[Now\\] it is crystal clear that without strong institutions, producing strong policies and implementing them, anti-corruption means nothing.\n\nIn other words, Ukraine can only win this war if it wins the war against corruption and builds strong, independent institutions resilient to external attempts to corrupt and control them.\n\n## A tough fight ahead\n\nGuatemala and Bulgaria are just two countries facing a tough fight ahead to dismantle corrupt systems and create a well-governed state that works for the people. Legal reforms are important but not sufficient, stressed Denkov.\n\n> You have to have the people. It is not only the leaders. In every position you have to have a person who is willing to fight every day.\n\nThose people will need a lot of energy, said Senator Whitehouse:\n\n> For the corruption machine, maintaining corruption is life or death. You take away their corruption, there goes their money, there goes their power, their limousines, there goes everything. So they fight to defend it with determination…. The energy and persistence and determination of the corrupt needs to be matched by similar energy, persistence and determination of those trying to root out corruption.\n\nAnd that energy can only come from the recognition that corruption is, according to _“is no longer \\[just\\] a nuisance. It is a direct political threat,”_ according to President Arévalo.\n\n> Until we do not recognise that, we are not going to really be able to muster the energy, imagination and commitment at the international level to fight corruption effectively.\n\n## Learn more\n\n*   See the [full recording](https:\u002F\u002Fsecurityconference.org\u002Fmsc-2024\u002Fagenda\u002Fevent\u002Fspotlight-corruption\u002F) on the Munich Security Conference website.\n*   See related articles on [corruption and peace building](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Ffighting-corruption-promote-peace-and-security-basel-peace-forum-2024) and on [how corruption fuels insecurity by affecting power](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fhow-strategic-corruption-fuels-insecurity-affecting-power).",{"id":180},"206ae2d8-12c3-44d3-a203-8fdd1171bdde",[182],{"tags_id":183},{"id":128,"name":129},[],[],[],{"id":188,"title":189,"slug":190,"date":191,"type":115,"language":176,"topics":192,"body":193,"image":194,"tags":196,"translations_news":203,"translations":204,"content":205},10418,"How (strategic) corruption fuels insecurity by affecting power","how-strategic-corruption-fuels-insecurity-by-affecting-power-2582","2024-02-13",[81,62],"How do corruption and security intersect? What is _strategic_ corruption and what can we do about it?\n\nThese were two fundamental questions tackled at the Countering Strategic Corruption workshop at the [2024 Basel Peace Forum](https:\u002F\u002Fbasel-peace.org\u002Fbpf-2024\u002F). Claudia Baez Camargo, Head of Prevention, Research and Innovation at the Basel Institute on Governance, spoke at the event. Together with her colleague Saba Kassa, the team’s Deputy Head, she highlights two key ideas:\n\n*   Using the lens of power helps us to better understand how corruption impacts security_._ Corruption changes power dynamics, which in turn affect security.\n*   We need to see how corruption is a highly functional tool for those seeking not just private benefits but – in the case of strategic corruption – geopolitical goals.\n\n## Power: at the heart of corruption and security issues\n\nCorruption fuels insecurity in many ways, directly and indirectly. But the big picture is that corruption affects the exercise of power by undermining it, or by strengthening it in a particular person or group’s favour.\n\nChanges in power in turn affect all forms of human security, including a country’s ability to defend itself against internal or external threats.\n\nIt is useful to think of three different types of corruption:\n\nCorruption State power Implications Insecurity Endemic corruption Weakens ability to serve citizens.\n\nErodes trust. \n\nIncreases inequalities and poverty.\n\nFuels insecurity.\n\nErodes performance of security institutions.\n\nState capture\n\nRepressive capacities are instrumentalised. State institutions serve elites. \n\nConsolidates power in hands of political elites.\n\nImpunity is the norm.\n\nEnables discretionary and abusive control of security apparatus.\n\nFuels radicalisation of oppressed groups. \n\nStrategic corruption State powers abused and weaponised to achieve a geopolitical goal.\n\nFunds conflict, weapons.\n\nInfluences or destabilises other countries.\n\nContributes to polarisation.\n\nEmboldens populists, authoritarian or violent groups.\n\n## Endemic corruption: weakening institutions and trust\n\nWidespread and systemic corruption affects the ability of the state to serve citizens. Consider the theft of public funds earmarked for hospitals or medicines, which affects citizens' access to good health care. Consequences include higher inequality and poverty, as well as an erosion of trust in government and public institutions. This is where security risks come in. [Popular protests may spur violence](https:\u002F\u002Fcarnegieendowment.org\u002F2018\u002F04\u002F12\u002Ffighting-hydra-lessons-from-worldwide-protests-against-corruption-pub-76036) and conflict as tensions rise.\n\nIn conflict-afflicted and fragile contexts, theft of humanitarian aid or resources dedicated to strengthening legitimate state actors and institutions can undermine the prospects for sustainable peace.\n\nA related problem is the systematic erosion of defence and security institutions. Corrupt procurement deals and embezzlement leave institutions with underpaid and underequipped staff while draining national budgets.\n\nThis makes it very challenging to respond to domestic and external threats, and organised crime and terrorism can get a stronger foot in the door. For example, research in [Nigeria](https:\u002F\u002Fwww.tandfonline.com\u002Fdoi\u002Fabs\u002F10.1080\u002F09592318.2020.1672968) has shown that corruption in the military affects the ability to respond effectively to the militant group Boko Haram. In other words, corruption undermines the most basic responsibility of states: protecting citizens from violence and conflict.\n\n## State capture: centralising power\n\nState capture is a systemic form of corruption in which political elites, often together with economic elites, control state institutions for their narrow purposes. It is more than about siphoning off state resources with impunity. It can be about getting laws, such as procurement rules, just right for those political elites and their associates to win lucrative contracts or control valuable natural resource sectors.\n\nThe unchecked ability to shape laws and direct state intuitions puts a lot of power in the hands of a few people. For example, they can instrumentalise enforcement institutions such as the police or courts to neutralise opponents and ensure impunity for their circle. All this strengthens their power base. And it shows again that corruption can be a highly functional tool.\n\nThe citizens of a country suffering from state capture understand that power is exercised discretionarily and that the rules apply to some and not to others. Fear and powerlessness often close the door to challenging the situation through democratic means.\n\n## Strategic corruption: a powerful geopolitical tool\n\nStrategic corruption goes beyond the kind of narrow personal benefits implied in the common definition of corruption as “the abuse of entrusted power for private gain”. Here, corruption is weaponised to help change power dynamics on the geopolitical stage.\n\nIn this cross-border and global context, states can use corrupt means and divert public resources to fund their geopolitical objectives. For an in-depth case study of strategic corruption, see the _[Kremlin Playbook](https:\u002F\u002Fwww.csis.org\u002Fprograms\u002Feurope-russia-and-eurasia-program\u002Fprojects\u002Frussia-and-eurasia\u002Fkremlin-playbook)_ series.\n\nLooking at examples of strategic corruption again highlights the _functionality_ of corruption. It’s used not only to gain money and control of resources but because it gives people the power to achieve their goals.\n\nThat functionality goes both ways. Even in democratic contexts, politicians can use [accusations of corruption](https:\u002F\u002Fedition.cnn.com\u002F2023\u002F08\u002F09\u002Fpolitics\u002Fhouse-oversight-republicans-hunter-biden\u002Findex.html) to erode trust in opponents or public institutions and weaken their legitimacy. On the other hand, politicians with a strong anti-corruption platform can see success in the polls, as [Guatemala](https:\u002F\u002Fwww.wsj.com\u002Fworld\u002Famericas\u002Fleftist-sociologist-to-take-office-as-guatemalas-new-president-1a378380) and Bulgaria have recently demonstrated.\n\n## What we can learn from corruption’s power and functionality\n\nThe main takeaway? Looking at power and functionality helps us better understand how corruption affects security and at why strategic corruption is increasingly becoming a concern.\n\nThe main lesson? That we need to fight (strategic) corruption by disrupting its functionality, i.e. making it less of an effective strategy for obtaining power and achieving other illicit goals. And to do that, we need to ensure that anti-corruption efforts are strategic, coordinated and effective.",{"id":195},"a57ab670-9908-41dd-81ed-6a68124ff94b",[197,199],{"tags_id":198},{"id":128,"name":129},{"tags_id":200},{"id":201,"name":202},973,"Corruption",[],[],[],{"Asset Recovery and Enforcement":207,"Corruption Prevention and Public Governance":208,"Business Integrity Ethics and Compliance":209,"Green Corruption":210,"Public Financial Management":211,"Ukraine":212,"Defence Integrity":213},"\u002Fwork\u002Fenforcement","\u002Fwork\u002Fprevention","\u002Fwork\u002Fbusiness","\u002Fwork\u002Fprogrammes\u002Fgreen-corruption","\u002Fwork\u002Fprogrammes\u002Fpublic-financial-management","\u002Fwork\u002Fprogrammes\u002Fukraine","\u002Fwork\u002Fprogrammes\u002Fdefence-integrity",1794564796229]