EU Institutions Vulnerable as Authoritarian States ‘Weaponise’ Corruption, TI-DS Warns

19th November 2019

November 19, London – Corruption is being harnessed by authoritarian regimes as a foreign policy tool, research by Transparency International – Defence & Security warns – and the West could be at risk unless action is taken to address vulnerabilities in key institutions.

Corrupt practices like bribery and embezzlement of public funds have traditionally been viewed as a means of personal enrichment for individuals and networks, but new research published today reveals how policymakers have overlooked a key issue: corruption can be weaponised to achieve foreign policy goals and could potentially become a tool of hybrid warfare.

Corruption as Statecraft details how ‘corruption with intent’ schemes have already been used as part of the foreign policy arsenal of authoritarian states like Russia. They are often based on a dependence in a strategic sector, such as energy exports or infrastructure investments.

Those dependencies, based on a real need and combined with opaque governance and economic arrangements, can enable cross-border schemes where money is funnelled to decision makers in one country with a view to ensuring foreign policy decisions favourable to another country.

Dr Karolina MacLachlan, Regional Programme Manager for Transparency International – Defence and Security, said:

“Typically practices like bribery, money laundering and embezzlement of state funds are used by a corrupt elite for economic gain, but ‘corruption with intent’ schemes are far more insidious. These strategies are not aimed at making money, but are instead focussed on corrupting decision makers and public institutions in other countries in the pursuit of foreign policy goals.

“The damage corruption causes to individuals, communities and entire countries is well documented – and the poorest in society are inevitably left to suffer the brunt of the impact. This indiscriminate ‘collateral damage’ is what needs to make policy makes pay attention.”

Corruption as a tool of foreign policy can be deployed anywhere there is opaque company and government contracting structures, bribery, lack of oversight, and loopholes in key regulations. This means Europe and the United States are both at risk.

The Parliamentary Assembly of the Council of Europe has already been targeted by a corruption with intent scheme – and its ethics watchdog initially failed to stop it. The European Parliament, unable to fully account for MEPs’ external employment and outside income, is also at risk.

Dr Karolina MacLachlan said:

“While it would be tempting to assume that this weaponising of corruption is only a threat to emerging democracies such as Ukraine or Armenia, our research also highlights a vulnerability at the heart of the Europe Union which malign actors have already exploited – and others that can be exploited in the future.

“Worryingly, there are vulnerabilities in European energy trade and infrastructure investment carried out as part of China’s trillion-dollar Belt and Road Initiative. Large-sale commitments made by a number of countries, alongside limited transparency in international contracts and with legal loopholes, limit countries’ room for manoeuvre and open them up to external pressures and corrupt schemes.

“Despite the warning signs, there is still time for policymakers to address these chinks in the armour. The link between corruption with intent and strategic dependence means that European countries and the US not only need to pay far more attention to their own vulnerabilities and treat corruption as the strategic threat it can be, but also reconsider how they can help other countries fight corruption. Anti-corruption programmes need to be joined with wider political and economic considerations to manage the dependence that corruption schemes can be based on.”

How ‘corruption with intent’ schemes can work:

  1. There is a real or perceived need: infrastructure investment, energy, arms imports
  2. The need is met by an entity from another country (government, state-owned enterprise, a private company linked to government)
  3. The contracting and mode of implementation of the project(s) are opaque, involve intermediaries, are based on unfavourable terms, and create dependence. They are facilitated by local loopholes
  4. Opacity is used to funnel money to elites in the recipient country to secure favourable foreign policy outcomes

 

Contact:

Harvey Gavin
harvey.gavin@transparency.org.uk
+44 (0)20 3096 7695
+44 (0)79 6456 0340