Private enterprise by military and civilian personnel is not banned. The legislation does ban personnel from pursuing these activities during working hours. The Law on Discipline in the Armed Forces spells out limitations for conducting non-professionally related activities during working hours, but no restrictions are provided in the Law on Private Enterprise [1]. Similarly, in the article that sets out the prohibitions to the active military personnel the Law on the Status of the Personnel of the Armed Forces does not have a ban on private enterprise [2]. The Law on Civil Servant’s obliges civilian personnel to declare private interests but does not ban private enterprise [3]. The Law on Ethics in the Public Administration also does not provide for any limitation or prohibition on private enterprise, except for the involvement in activities that hinder the performance of official duties [4]. Furthermore, the bylaws also provide no bans or restrictions on private enterprise [5]. The same applies to the intelligence services personnel. According to the Law on the Status of the SHISH Personnel, employment outside working hours is prohibited without the approval of the State Intelligence Service (SHISH) Director [6].

This indicator has been marked Not Applicable. As there is no ban on private enterprise, no data is collected on the level of involvement of defence sector employees in private enterprise. Some cases of private enterprise by family members of active or former defence officials have been reported by the media, but the reports have reported on the potential of a conflict of interest concerning these officials rather than on the legitimacy of these businesses [1, 2].

The Algerian government explicitly outlaws private enterprises by military personnel who are actively serving in the armed forces. It is unclear what kind of sanctions are in place. According to Art. 34 of the Statute of Military Personnel of 2006 a member on duty shall devote all his professional activity to the performance of the tasks assigned to him and shall be prohibited from engaging in any private gainful activity (1). No possible sanctions with regards to this issue could be found in the Statute of Military Personnel or the Code of Military Justice (2).

Information has been found that suggests defence employees are engaged in private enterprises. One report alleges that top army officers are running up to 30 private companies each, which might be owned by themselves or members of their families (1). A recent report from the ICG noted that Algerian’s rentier economy has produced a “private sector in which state contracts are awarded based on personal connections, rather than merit or efficiency” (2). Another article has claimed that sons of the elite run lucrative businesses; i.e., the son of the head of the DSS (3). Researcher Mohammed Hachemaoui noted that there have been connections between companies and the DRS (4). No information was found on whether these companies have been authorized.

The 2010 Law on Public Probity, as well as previous legislation, explicitly prohibits public servants from receiving money or gifts from private business deals; however, the law has been poorly enforced (1).

The Angolan journalist Rafael Marques has documented numerous examples of impunity of violations of the public probity law by public officials on the anti-corruption blog Maka Angola. These include many cases of senior military officials, and particularly from the president’s Security Bureau, illicitly engaging in private businesses that pose a clear conflict of interest (2), (3), (4).

Senior military officials, including top officials of the president’s Security Bureau under Dos Santos, reportedly have declared or beneficial ownership in major private security companies, diamond and oil companies and other private businesses, despite flagrant conflicts of interest outlawed by the public probity law. The private security business has been dominated by senior military officials. The 2014 law on private security companies establishes mandatory licensing, background checks and professional training for staff, yet does not elaborate on illicit ownership by public servants (1), (2), (3).

In Argentina there is currently no legislation that prohibits private companies of military composition. Nor is there evidence of the existence of private companies developed by the military, nor that external companies operate in the country. In this sense, there is no specific policy or legislation in this area. It should be noted that the discipline code of the Armed Forces establishes that “Incompatible Businesses” is a serious offense: a member of the military who delivers services, associates, directs, manages, advises, sponsors, or represents natural or legal persons who are suppliers or contractors of the armed forces up to two years, even after having retired, is not allowed. However, it is worth mentioning that there is a National Necessity and Urgency Decree in relation to private security and custody services (Decree 1002/99) that is mainly in the framework of Internal Security and not Defence, and that even includes the Argentine Chamber of Security and Research Companies. There is only state supervision over private security companies (surveillance), not companies developed by the military. With respect to the former, each province has specific legislation applicable under Decree 1002 of 1999. In turn, the aforementioned decree establishes the Ministry of Interior Security of the Ministry of Interior as an oversight authority, keeping a record of those companies, measuring the cost of the fulfillment of staff requirements, and granting credentials. [1] [2]

There are currently no unauthorised private companies operating in the Argentine territory. Even so, there may be cases where ex-military and ex-members of the police start private ventures in the security field and, although they are not military service providers, use their experience in the civilian field. [1] Also, by not having a regulatory framework at the national level regarding private security companies, each province has its own legislation. [2]

According to Clause 3 of Article 3 of Law on Public Service of 23 March 2018, the military service is included in public service. According to Article 31, public service officers are prohibited to conduct business activity or occupy any other position in a commercial organization, to have another paid position other than research, education or creative work [1]. The same provision is included in the Law on Military Service and Status of Servicemen. Clause 7 of Article 8 stipulates that military officials are prohibited to conduct business/commercial activity [2].

There are few reports of unauthorised private enterprise by the military and employees of the MoD. According to a news.am report, an Armenian general established a business in partnership with a director of the cheese factory and later seized the joint business [1]. Express.am reports that crayfish export licenses have been given to only two companies, one of which – Aquatic – belongs to the then Deputy Chief of the General Staff of the Armenian Armed Forces Lieutenant General Haykaz Baghmanyan [2]. Another company, “Intermed” LLC, is linked to former Secretary of the National Security Council, Yuri Khachaturov and Khachaturov’s accounting company also oversees all of the ministry’s suppliers [3]. The “Martik” foundation’s director was an employee of the MoD. It was a paid position meaning that a clause of Law on Public Service was violated as a public service officer is prohibited from having another paid position other than research and education positions [4].

Defence strictly regulates work its personnel may carry out outside of on-duty hours. The Military Personnel Policy Manual (MILPERSMAN) [1] provide that defence personnel must seek permission for outside volunteering and work, as well as circumstances under which permission should and will be denied. Defence personnel defying restrictions laid out by and orders as a result of MILPERSMAN face administrative action, dismissal, and, if the action is an offence under the Criminal Code Act 1995 or Defence Force Discipline Act 1982, imprisonment. Disobeying a lawful command [2] and failing to comply with a general order [2, s. 29] are both offences under the Defence Force Discipline Act 1982, punishable by up to one and two years in prison, respectively; while the Criminal Code Act 1995 makes abuse of public office an offence punishable by up to five years in prison [3].

It is unclear to what extent defence personnel are engaged in unauthorised private enterprise, but given the strict prohibition on the practice (see Q33A) and lack of media reports [1] of serious breaches, it appears that unauthorised private enterprise is either rare or does not occur at all. Interviewees with close exposure to defence issues say that their impression is that Australian defence personnel generally act with a very high level of integrity and do not see this form of corruption as a prevalent issue [2, 3].

There are legal restrictions on defence institutions or individuals having controlling or financial interests in businesses. According to the Law on the Status of Military Servants (Article 23.v), military servants are prohibited from engaging in private entrepreneurial activity or having salaried staff positions in cooperatives engaged in production and mediation activities (1). However, many security and defence officials have their businesses documented in the names of those who are close to them, it is difficult to find the truth (2).
At various points, there have been reports that officials from several military institutions were engaged in business activities. Though the law prohibits it. Meanwhile, there is information on business activities of officials from the Ministry of Emergency Situations and the Ministry of Defence. According to the expert (3), Gilan Holding (4), which belongs to the son of the head of the Minister of Emergency Situations Kemaleddin Heydarov, is one of the giant businesses in the country.
The Azerbaijani press publishes articles about Kamaladdin Heydarov’s business activities (5). Additionally, the Azersum Holding, which supplies the army with food, is linked to the president’s daughter. Azersun Holding has large contracts with the defence and security sector (6). At the same time, there is no precise evidence to say that an unauthorized private enterprise is owned by individuals in the defence sector. However, government officials have been reported as being involved in unauthorized private sector activity as individually. Relevant laws prohibit ownership of private businesses, but in reality, this practice is widespread among senior officials.

It is no secret that several officials in the defence and security sector are engaged in business activities. However, the authorities do not punish these people. “These people will be punished when they hide what they’ve illegally earned or put their political ambitions out,” said the expert (1, 2). At the same time, unauthorized private enterprise ownership is a problem with a few select individuals or institutions.

According to the Personnel Military Law of Bahrain (Articles 45-49), personnel are not allowed to have other jobs or work without official approval from the commander in chief [1].

According to sources, many unauthorized businesses are run and managed by high-ranking officers, but they are not registered under their names [1]. According to an army officer, they tend to disclose the enterprises under their spouse’s name to avoid legal actions [2]. As for prevalence, there is no available data online or from sources consulted.

The Army Chief, for example, is the default Chairman of Trust Bank Ltd. Serving officers also occupy the positions of Vice-Chair and Directors at this bank [1], which is owned by the Army Welfare Trust. This indicates that there is no prohibition on military officials becoming part of private enterprises.

Unauthorised private enterprise is limited in nature and practised by a select group of powerful officials, especially from intelligence agencies [1].

Private enterprise is, in general, not permitted for military personnel. Any member of the Belgian Defence wishing to perform a private enterprise has to receive the preliminary approval from the Minister of Defence [1].

Unauthorised private enterprise does not occur [1]. During the process of obtaining a security accreditation, the intelligence services investigate if the person concerned performs a private enterprise, and a security accreditation will be withheld if such private enterprise is unauthorised [2].

In Bosnia and Herzegovina, there are law and by-laws that regulate private enterprise.
Businesses the Ministry of Defence (MoD) and BiH Armed Forces (AFBiH) go into with other business entities are subject to the strict application of the BiH Law on Public Procurement [1]. Concluding business between the MoD and the AFBiH with companies or other business entities led by persons employed at the MoD and AFBiH would represent a conflict of interest and is subject to disqualification per Article 52 of the Law on Public Procurement.
Article 22 of Instruction on Preparing of Tender Documentation [2] stipulates the obligation of signing the statement by all participants in public procurement that guarantee the adherence to Article 52 of the Law on Public Procurement, related to the conflict of interest.
For military personnel within the Ministry of Defence (MoD) and the armed forces, the mentioned activities are regulated by the Law on Defence [3], Chapter VI, related to conflict of interest and professionalism and by the Law on Service in BiH AF [4]. In case of violation of provisions of the Law related to the conflict of interest and professionalism, military personnel is subject to disciplinary responsibility that is regulated by the Law on Service in BiH AF, article 33, as well as disciplinary sanctions defined by the Chapter XVII of the same Law. The same issue is regulated in more detail by Ethic Code of Conduct of Military Personnel in BiH MoD and AF. In case of other violations, military personnel is held accountable according to the general regulations on offences, which is also regulated by the Law on Service in Bosnia and Herzegovina Armed Forces, Article 32. For civilian personnel in the MoD (appointed persons, civil servants, persons employed by the AFBiH), the same issue is regulated by the Law on Conflict of Interest in BiH Institutions [5], the Law on Civil Service in BiH Institutions [6] and the Code of Conduct for Civil Servants in BiH Institutions [7].
Article 47 of the BiH Law on Defence [3] prescribes the following: (Conflict of Interest) Professional military personnel at the service of the Armed Forces will not:
a) have a financial interest that is in conflict with the conscientious performance of their duties,
b) have employment outside the Armed Forces or perform any other activity that conflicts with their duties and responsibilities.

A search across the media, together with other documentary sources, did not provide any evidence of unauthorised private enterprise by military or other defence ministry employees [1].

There is no express provision in the law that either permits or prohibits private enterprise by military and defence personnel [1]. However, Article 147 does not allow any unauthorised engagement in trade or business for-profit purposes (see BDF Law Chpt 21:05). This leaves the door open to engaging in trade or business in instances where such authorisation has been granted. What is clear in practice is that there must not be any conflict of interest or corrupt practices in that private enterprise [2]. For example, the former Director of the Directorate on Intelligence Services, Isaac Kgosi, has been embroiled in corruption involving companies that he was involved in whilst he was head of that department [2]. Sanctions for unauthorised private military enterprise is found in the criminal justice system.

There is no evidence of unauthorised private enterprise by the military, during the research period [1,2]. Howver, this does not mean that such activities do not exist if media reports are anything to go by. Given the lack of substantive evidence, this indicator is not scored and is marked ‘Not Enough Information’.

According to the Ministry of Defence Transparency Report, the Public Procurement Law prohibits the participation of any public official in public biddings (Article 9, III). Accordingly, the Public Servants’ Regulation [1] and the military statutes [2] also prohibit this practice. Law 8.112/1990 prohibits all civil servants from participating in the management of any public limited company, except in the role of shareholder [1].

There are some reported cases by the media involving unauthorised private enterprises by the military, such as the case of Minister Marcos Pontes, who denied to be the owner of an enterprise while working for the Air Force, and assumed as the owner of the company when the investigation expired its validation [1]. As private enterprises by the military are forbidden by the Military Criminal Code, transgressions would be prosecuted and eventually punished by the Supreme Military Court [2].

Law N° 037-2008 (2008) and Decree N° 94-159 (1994) prohibits commercial activities conducted by members of the armed forces (1), (2). However, the government encounters many difficulties in fully implementing this legislation. Hence, some defence ministry employees are directly or indirectly running private enterprises. According to Gondé, Burkina Faso’s defence institutions are involved in the political, economic and social arena since the country achieved independence. These activities are not part of the classic missions of the defence sector. Although they are illegal the government has done nothing to shut them down (3).

Analyzing what should be the new role of the military in Burkina Faso, Gondé claims that the Burkina Army has infiltrated non military roles including taking membership in political parties, associations, trade-unions; construction of roads, dams, buildings; making profits through agriculture, health, education and water, even though the legislation prohibits these activities (1), (2), (3). To monitor funds derived from these activities, the Constitutional Council created commissions to check out asset deposits by government officials, including in the military (4).

There is no legislation which authorises private enterprise by military personnel or personnel of the Ministry of Defence. According to the General Rules and Regulations governing Service and Establishments in Cameroon, civil servants are not allowed to operate private businesses [1]. However, there are several military personnel who are not only involved in their own personal enterprises but use the resources of the Ministry for their own personal purposes [2].

Some military personnel are involved in small-scale business like the production and sales of books and the purchase and sales of land [1].

It is reported by ICI CEMAC that some top-ranking military officers are involved in some form of commercial activities that are linked with the Ministry of Defence. There are several military personnel who are not only involved in their own personal enterprises, but use the resources of the Ministry for their own personal business [2].

According to ICI CEMAC, the electronic journal The Young Observer reveals the market value of the arsenal amassed by Edgar Alain Mebe Ngo’o: 20 dump trucks (20 million / unit – 400 million FCFA), 3 Bulldozers D7 (130 million / unit – 390 million FCFA), 4 graders (100 million / unit – 400 million FCFA), 4 compactors (60 million / unit – 240 million FCFA) and 3 loader excavators (80 million / unit – 240 million FCFA). As a prudent man, he also invests, especially in real estate. The fortnightly Le Jeune Observateur also revisits Mindef’s relationship with Mag-Force. The overcharging of this company is unveiled, and it is flagrant. For example, regarding combat suits, the former suppliers sold each at 18,285 FCFA while Mag-Force was offered 22,350 FCFA. The berets were provided by the former suppliers at 5,452 FCFA each, while Mag-Force supplied them at 8,855 FCFA each… Alain Mebe Ngo’o directed the money allocated to the fiftieth anniversary ceremonies of the armies to his personal enterprises; even the restaurant was run by his sister-in-law, Mrs Baoro, who had done such a great job in the minesec hijacking business. He named a certain “Akono”, the brother of his wife, head of the Markets Department. The contract for the “repair of Bamenda airport was passed to his friends in Deco-Center who had already worked with him on the refurbishment of his office that had swallowed nearly 350 million FCFA…” [2]

The CAF Code of Values and Ethics prohibits any activity, including financial or commercial, that would conflict with the mission of the Canadian Armed Forces (CAF), or would put the individual’s interests before those of the CAF. This Code provides for disciplinary measures, including separation from the force and criminal charges for violations. [1] All potential conflict of interest, including financial or commercial but also volunteering or political activity, must be proactively reported and assessed as to whether it presents a conflict of interest, meaning that military or defence employees may not exercise discretion about this. [2] This is addressed in part by the federal law on conflict on interest and the public sector, which applies to the Department of National Defence (DND) and the CAF. [3]

A database search of LexusNexus, and of Proquest, for Canadian news media in the last five years looking for (“Canadian Armed Forces” OR “CAF” OR “National Defence” OR “DND” or “military”) AND (“corruption” OR “illegal” OR “conflict of interest” OR “private business” or “private enterprise”) turned up no entries on this activity, although it did turn up references to other forms of corruption or illegal activity in the CAF, and references to unauthorised private enterprises in the militaries of other countries.

There are no known instances of such activity. [1]

There are dispersed legal prescriptions that refer to the duties of public servants and the ethics of the members of the military forces, but these sources do not specify norms that explicitly outlaw private enterprise in the state’s defence and security operations. The Penal Code establishes penalties for crimes and offences committed by public employees in the performance of their duties [1, 2]. For example, it prescribes penalties for public servants who, in the exercise of their positions, obtain a significant and unjustified enrichment, the penalty being equivalent to the amount of the undue patrimonial increase and the temporary disqualification for the exercise of public positions (Penal Code, Art. 241bis). On the other hand, the Code of Military Justice does not mention the issue, except for the illegal selling of military equipment (Penal Code, Art. 333). The disciplinary statutes of each branch of the armed forces only partially allude to the subject in question (Decretos 1445 y 1232). Disciplinary faults, when they do not constitute a crime, may include the selling, pawning, changing, rendering or donating materials and the misuse of the position for private benefit [3, 4]. Dedicating an important part of the workday to particular matters and without justification is considered serious misconduct (Art. 205), and the selling of articles of fiscal origin without authorisation is an extremely serious case of misconduct (Art. 206).

Unauthorised private companies have been reported in several cases in the armed forces, particularly in the army. The cases are mainly related to the use of intermediaries in the acquisition of war material and the duplication of false invoices [1, 2, 3, 4, 5]. However, there are also specific cases that involved illegal arms sales to drug trafficking groups [6]. What was initially conceptualised as a problem with some selected people or institutions, later developed a series of investigations of illicit practices that were institutionalised in several branches of the armed forces.

The Chinese Civil Service Law [1] explicitly forbids all public employees from engaging in private businesses (Article 53) and stipulates specific time gaps between retirement/resignation and employment in the private sector (Article 102). Punishments include: warning, demerit, gross demerit, demotion, dismissal from post and expulsion (Article 56).

There has been evidence of poorly regulated businesses and use of military units and equipment for private gain. Following two divestitures in 1998 and 2016 [1,2,3,4] the CCP has ordered the PLA to give up any remaining businesses. However, given the absence of transparency and independent scrutiny, it is impossible to know the exact extent of enforcement.

A review of Colombia’s laws reveals that there is no legislation either permitting or prohibiting private enterprise by military or defence personnel.

Through a review of media and legal sources, no evidence of any private enterprise by military or other defence ministry employees, including corresponding reactions or potential penalties could be found. However, given that it not outlawed, it is likely that such enterprise could take place without attracting any attention. For this reason, this indicator is marked ‘Not Enough Information’.

No explicit legal provision ban MoD officials from operating an unauthorized commercial business. There is ample and longstanding evidence of illicit trafficking in commodities and natural resources by military commanders, particularly at artisanal gold-mining sites. Though the Mining Code was revised in 2014 to combat illicit sites, the administration of President Alassane Ouattara has been ineffective in fighting unauthorized private ventures by military personnel because of the threat to domestic political stability. The Ministry of Industry and Mines regulates artisanal mining (orpaillage) and demands the disclosure of beneficiary ownership when an application is submitted for an artisanal mining permit, as per the 2014 Mining Code and Decree No. 2014-397.

According to the 2014 Mining Code (Portant Code Minier) (1) and Decree No. 2014-397 (Déterminant les modalites d’application de la Loi No. 2014-138) of June 25, 2014 (2), Côte d’Ivoire now regulates artisanal mining operations. The objective is to end illegal operations by extending official permits (autorisations d’exploitation) and forcing applicants to comply with basic safety, environmental and disclosure regulations. Though the government has closed down 400 illicit mining sites since the 2014 Mining Code was introduced, the measures have proven largely ineffective and international mining companies suspect government laxity vis-a-vis the military commanders who run the illicit operations (3). In July 2017, Jersey-registered Randgold Resources announced a five year USD 300 million investment in gold mining in West Africa, including Côte d’Ivoire. CEO Dennis Marc Bristow complained to the authorities in Abidjan about the thousands of artisanal miners that operated within its permit at the site of Boundiali stating that the miners appeared to enjoy the “protection” of local military commanders (4), (5). Bristow said, “there is an obvious complicity with people that involves a certain degree of responsibility. It is urgent that a radical government decision be taken,” said the boss of the Tongon mine. The man also called for a distinction between traditional and organized gold panning (orpaillage traditionnel) that has long been codified by the mining code and the current clandestine mining that takes place chaotically” (4).

There is no evidence of unauthorized private enterprises openly operated by the MoD officials. However, there is ample and longstanding evidence of illicit trafficking in commodities and natural resources by military commanders, particularly at artisanal gold-mining sites. The evidence of illicit artisanal gold mining operations points to former rebel leaders of the Forces Nouvelles (FN), who sided with President Alassane Ouattara during the 2010-2011 post-electoral crisis. Known as COMZONES, they usually have hundreds of soldiers under their command supplementing their MoD wages by trafficking. The government is reticent to address this issue due to the history of soldier mutinies and the threat to political stability.

According to a report by France Inter in western Côte d’Ivoire (region of Daloa), soldiers were running an illicit artisanal gold mine (Mine 22) in December 2015. This type of operation is prevalent throughout the country with the tacit (sometimes direct) involvement of the local military establishment. About 500 artisanal miners were working at Mine 22 producing 40 kg of gold per month. Soldiers, the local prefect and MoD officials were referred to by the miners as VIPs or “parrains” (godfathers) (1):

“Mine 22 alone produces about 40kg per month when it runs at its maximum output level, or 1.2 million euros. And there are at least three other deposits operated illegally in the area of Daloa. So, the returns are very significant…We are dealing with a mafia system on a large scale. It is clandestine trafficking, but a totally codified system involving scales and quotas. Everyone shares the cake. The soldiers are milling about inside the mine because the armed forces there receive a percentage of the sales of gold, just like the members of the local administration: the prefect, local officials, etc” (1).

In a more recent report by the Canadian-based Partenariat Afrique Canada (January 2017), Alan Martin and Hélène Helbig de Balzac found that gold production at illicit artisanal mines operated by former rebels had registered a strong growth because of the quality of Ivorian gold and the low extraction costs. The report estimated that gold was being mined illegally 24 out of 31 regions of Côte d’Ivoire, but especially outside of the towns of Bouaké and Katiola. The Ministry of Mines puts the number of artisanal miners at 500,000 in 2017 (2):

“The networks established by former combatants and gold traders during the war in Côte d’Ivoire still have tentacles and the former zone commanders continue to profit from smuggling and the parallel tax system linked to the artisanal mining sector. However, they are now working with intermediaries, according to a military source in Bouaké, Côte d’Ivoire” (2).

The government does not outlaw generally private enterprise for public employees, thus including the defence domain.
The Code of Conduct for the public sector states that public employees have the right to obtain employment outside their principal occupation as long as there are no conflicts of interests; the other occupation does not take up too much of the employee’s time; and the occupation does not go against the decorum demand of the public sector [1]. As a general rule, employees that undertake other paid employment are not obliged to report it to the principal occupation authority, and the principal occupation authority cannot prohibit its employees from undertaking other paid employment. Some exemptions apply.
All this is consistent with the Act on Public Servants (Tjenestemandsloven) [2] and the Functionary Act (Funktionærloven) [3]. An administrative directive of the Department of Defence lays our provisions for the collection and processing of tender bids made by current or previous employees within the ministerial domain [4].

Secondary employment of certain senior officials (on pay grade 38), such as head of department, department director etc., is regulated, such that these senior officials must declare secondary employment to the ministry they work at as well as the Ministry of Finance (5. Cirkulære om anmeldelsespligt, CIR nr. 74 af 2005-08-30). [5]

Additionally, there are rules for employees in the Danish Defence Command. In cases in which the Ministry of Defence finds that the secondary employment of one of its employees in the Defence Command is unsuitable, internal guidelines establishes that the MoD can prohibit its employee from undertaking the specific paid or unpaid employment, with negative employment law consequences if the employee does not cease with the employment FPTVEJL 491-1 Vejledning om bibeskæftigelse). [5]

Research found no instances of unauthorised private enterprise [1, 2].

No law prohibits defence and security institutions from establishing private commercial enterprises. It is reported that the Ministry of Military Production oversees about 20 businesses, while the Ministry of Defence controls dozens (1), (2), (3), (4). These businesses are usually established by ministerial decrees from the respective ministries, leaving the expansion of the military’s economy to the military itself to decide. The armed forces usually operate in strategic industries and enjoy major tax and other incentives, which makes them very profitable. The 20 companies that are under the control of MMP are expected to generate revenues of about EGP 15 billion in 2018/2019 five times higher than that of 2013/2014, which shows the expanding role of the military in the economy since 2013 (4). It is unclear what happens with those revenues.

Private enterprises by the military are very common and range from construction to fish farms, to a holiday resort. Due to the non-disclosure policies in place, there is no accurate agreed-upon estimate of the size of the military’s private enterprises. However, the lowest cited estimate was 2% of GDP, which was cited by President Sisi himself in an attempt to undermine other estimates of 20-40% cited by others. However, even the very low 2% estimate is still a sign of the prevalence within the economy. According to our sources, there are many unauthorized enterprises owned and operated by the military. These enterprises are sometimes are declared and operate openly, but are not authorized or registered within the government (1), (2), (3), (4).

It was forbidden for servicemen to conduct business activities until July 2018. [1] However, the Military Service Act was recently amended and conducting business is not forbidden anymore. Servicemen are now allowed to engage in business activities and receive income by using their knowledge and skills. The change had to do with the elimination of the special retirement pension for public servants. [2] The law concerning business activities by servicemen was amended with little to no debate or criticism. [3]

At the legislative level, private enterprise was only recently, in July 2018, allowed for military personnel. [1,2] The government does not impose any barriers to or scrutiny of military business activity. In fact, their activities do not have to be made public. [3] Illegal entrepreneural activities by military personnel occur, but are rare. For instance, in 2012, a presumed serviceman was selling military food in an online shop. The Defence Forces deplored the acitivity. [4] Another more recent incident involved a sergeant who took parts of weapons out of the military territory and sold them illegally together with two other people, who were not servicemen. The case was discovered by the Secret Service. The men were sentenced to prison. [5]

Decree on the Defence Forces, Chpt 4,
Section 25: If a sideline requires the use of working hours, a permission for it is given by the Headquarters. In other cases, the civil servant shall inform his or her administration unit about the sideline without a delay. [1]

Act on State Civil Servants, Chpt 4,
Section 28: A civil servant may not take a sideline, which requires the use of working hours for it, unless the relevant authority permits it upon request. The permission for a sideline can be given for a certain period of time and with additional restrictions, it can also be cancelled. In addition, the civil servant shall not become contestable in his or her position due to the sideline and the sideline shall not endanger trust on equality in his or her decision making, or otherwise impede the appropriateness of his or her work or constitute a competing activity that may harm his or her employer.

In other cases, i.e. sidelines that do not require the use of working hours, the civil servant shall inform the appropriate authority without a delay. The authority may forbid such an activity for the reasons stated above. A sideline refers to a post or a paid job and a task from which the civil servant may decline as well as a profession, a livelihood and a company. [2]

Act on State Civil Servants, Chpt 6,
Section 24: A civil servant that acts against or neglects his or her duties, can be given a written notice;
Chpt 7, Section 25: A civil servant shall be dismissed only for a grave reason;
Chpt 7, Section 33: A civil servant may be dismissed instantly, if he or she acts against or neglects his or her duties in an aggravated manner;
Chpt 7, Section 34: As a basic rule, the aforementioned right to dismiss a civil servant instantly applies for two weeks after the authority has become aware of a reason that justifies the action. If there is a competent obstacle for such an action within two weeks, it may be carried out when the obstacle has become obsolete. If the dismissal has been postponed due to a pre-trial investigation or for acquiring other necessary clarifications, it may be carried out within two weeks after the pre-trial investigation has been concluded or other clarifications have been acquired, but the latest six months after the authority has become aware of the reason that justifies the dismissal. [2]

Small-scale misconduct unlikely hits the headlines, as notices to, suspension of office of, or dismissal of minor civil servants are not of media interest, but there are some recent major cases of misconduct by standing or former high-ranking officers.

Most recent of such examples is the actions of a former Chief of Staff, Jarmo Lindberg, after his retirement. The former pilot put up a consultancy to represent one of the major fighter manufacturers, Lockheed-Martin, in the ongoing competitive bidding on fighters for the Finnish Airforce. The waiting period for such an action after retirement was six months, which he barely followed before his name appeared on the listing of consultanies on the acqusition project’s website. This move attracted plenty of media attention and public condemnation and led to the Ministry of Defence banning all consulties from participating in the acquisition project. [1,2,3,4,5,6] In the aftermath, Lockheed-Martin revoked the consultancy agreement with Lindberg [7].

The Defence Code strictly regulates private activities by military staff. [1] Military staff are, for example, allowed to sell their own goods, or work in a business owned by their partner, but they have to apply to receive authorisation. Military personnel who wish to engage in income-generating or voluntary activities outside of their professional functions, are subject to sanctions. Under the Penal Code, engaging in unauthorised private enterprise that represents a conflict of interest is punishable by five years in prison and a minimum €500,000 fine. [2] Even in cases where there is no conflict of interest, unauthorised private enterprise is punished by disciplinary penalties [3] and payroll deduction, proportional to the benefits accrued whilst carrying out the unauthorised activity [4].

No examples of corruption were found in this regard, which suggests that the Deontology Commission [1] which decides as to which activity is compatible with military functions has been a good safeguard.

The government strictly outlaws any unauthorised private enterprise, with appropriate sanctions in place to deal with offenders. In accordance with Article 20 of the ‘Soldatengesetz’ (Act on the Legal Status of Military Personnel – SG) and Articles 97-101 of the ‘Bundesbeamtengesetz’ (Federal Civil Service Act – BBG), the Ministry of Defence distinguishes between secondary activities that are subject to approval (Article 99 of the BBG) and activities that do not need approval (Article 100 of the BBG) [1,2]. Further ways of sanctioning misconduct can be found in Article 23 of the SG and Article 77 of the BBG [1,2].

Beyond that, in accordance with the ‘Zusätzlichen Vertragsbedingungen des BMVg zur VOL Teil B’ (Additional Contractual Provisions of the BMVg concerning Part B of the Conditions Concerning Contracts for Supplies and Services), contractors of the Bundeswehr undertake not to employ civil servants or soldiers, neither while on active duty nor after retirement, in secondary employment without approval of the BMVg. Infringement results in contractual penalties.

The Bundeswehr employs three different status groups (one military group and two civil groups (civil servants and white-collar workers)), whose employment/employment relationships are structured according to their own laws. The respective status law always regulates the admissibility of private companies (secondary employment), governs the service/employment relationship and standardises the notification and approval obligations before a secondary job may be started. Only a few secondary forms of secondary employment, such as union activities or the administration of one’s own assets are excluded from this and are not subject to these notification and approval obligations. This group of people may only be prohibited from carrying out a secondary activity if this secondary activity jeopardises their employability or contravenes the official requirements.

If a secondary activity may not be carried out in accordance with the applicable legal requirements, the responsible bodies also make this decision known to the employees concerned in writing and provide reasons, and include this letter in the personnel file. If the responsible bodies impose a condition or requirement on the acceptance of a secondary activity, the relevant procedure is followed.

The status law for soldiers and civil servants also regulates the permissibility of private companies in connection with follow-up activities, i.e. after leaving the employment relationship. This includes retired civil servants, former civil servants with retirement benefits, retired professional soldiers, and former soldiers who are entitled to long-term service have employment or other employment outside the public service that have been carried out in the past five years prior to their retirement. All reports of retired soldiers and officials are checked by the Federal Ministry of Defence which may result in a ban. The prohibition can be fully reviewed by the administrative judiciary.

If the obligation to notify or apply for a permit before starting the secondary job is not met, or if a secondary job is carried out despite refusal or contrary conditions or requirements (see Q33), the employee has committed an offence or a violation of the employment contract obligations. The relevant legal provisions for each status group stipulate corresponding sanctions [3].

The possibility of the notification/approval obligations not being fulfilled in individual cases, or of a secondary activity being carried out despite refusal or contrary to the conditions or requirements imposed, cannot be ruled out. As soon as such an incident becomes known, the statutory measures are taken. Statistics on individual measures taken are not recorded, however, there has been no evidence of this in recent years.

With regard to follow-up employment, it should be noted that the contracting parties of the Bundeswehr are contractually obliged not to employ former civil servants and soldiers without proof of harmlessness from the former employer. In the event of a violation, a severe contractual penalty is imposed [1].

There is no evidence of any law preventing miltiary personnel from engaging in the private sector (1).

There is a significant number of illegal private security companies and personnel (“galamsey”), particularly concerning the mining sector. A UN working group reports that these mining groups either arm themselves or employ mercenaries illegally (1). There is no evidence that defence employees engage in unauthorised private enterprises.

The Government strictly outlaws any unauthorised private enterprise and there are appropriate sanctions in place to deal with offenders [1, 2]. Article 8 of “Law 3978/2011” prohibits any unauthorised private enterprise by personel. Both the military and civil penal code impose sanctions, including imprisonment.

Unauthorised private enterprise does not occur [1, 2].

According to the Law on Military Personnel, military employees are not allowed to have an additional job or enter into private enterprise without prior special authorisation [1]. Sanctions vary and are the subject of further legal actions; violations can result in immediate suspension.

No information was found in the media in the last 20 years on the participation of active military personnel and defence ministry employees in any private enterprise [1]. Beyond searching media and checking prosecution cases, source 4 stated that he was responsible and should be aware of these cases, but he could only mention some isolated cases from the early 90s. No such case was reported according to source 5 – the officer at the Prime Minister’s Office [2].

As alluded to in earlier questions, there has been controversy surrounding the misuse of defence land for private enterprise [1].

As per Central Civil Service (Conduct) Rules, 1964:

“15. Private trade or employment
(1) Subject to the provisions of sub-rule (2), no Government servant shall, except with the previous
sanction of the Government-
(a) engage directly or indirectly in any trade or business, or
(b) negotiate for, or undertake, any other employment, or
(c) hold an elective office, or canvass for a candidate or candidates for an elective office, in any
body, whether incorporated or not, or
(d) canvass in support of any business of insurance agency, commission agency, etc., owned or
managed by any member of his family, or
(e) take part except in the discharge of his official duties, in the registration, promotion or
management of any bank or other company registered or required to be registered, under
the Companies Act, 1956 (1 of 1956) or any other law for the time being in force, or of any
co-operative society for commercial purposes.
(f) participate in or associate himself in any manner in the making of-
(i) a sponsored media (radio or television) programme; or
(ii) a media programme commissioned by Government media but produced by a private
agency; or
(iii) a privately produced media programme including video magazine”

The above explicitly prohibits civil service employees from engaging in private enterprise [2]. These regulations and codes of conduct are binding on all defence and security personnel [3]. Participation in such enterprises are not permitted.

In 2011, CAG and the Public Accounts Committee (PAC) had cited the unauthorised use of defence land for golf courses operated by Army Zone Golf [1]. In addition to the aforementioned, the use of parks and clubs on defence land for commercial purposes, using defence land for unauthorised shopping complexes, private colleges, cinemas and banks without proper sanction were cited [2].

After examining CBI press releases and Standing Committee on Defence reports since 2015, there seems to be no mention of other branches of the military engaging in unauthorised commercial activities [3]. The Army occupies 79.66% of defence land in stark contrast to the Air Force (8.72%) and the Navy (2.13%) [4].

Since the Reformation, the TNI has been banned from engaging in business activities, either in an institutional or private capacity, through Law No. 34/2004 [1]. The same law also ordered the TNI to hand over all military business to the state. Article 4 of Presidential Regulation No. 43/2009 concerning the Takeover of TNI Business Activities states that takeovers are carried out by (a) taking over business activities that are owned and managed directly by the TNI, (b) structuring cooperatives and foundations within the TNI and (c) structuring the utilisation of state property within the TNI [2]. The takeover was carried out by the TNI Business Activity Control Team, which was directly responsible to the Minister of Defence. The takeover of TNI businesses should have relocated all military business activities, whether in the form of companies, cooperatives or foundations, under the management of cooperatives (koperasi). At the level of the TNI Headquarters, the Chief of TNI upheld this ban by setting up an investigative team to respond to the public outcry against the involvement of TNI personnel in illegal narcotics bussiness [3].

There is insufficient evidence to score this indicator; as such, it has been marked ‘Not Enough Information’. An interview with the former Chief of TNI Gatot Nurmantyo indicates that the problem of illegal military business still exists [1]. One case started with a confession made by Freddy Budiman, a death row inmate in a narcotics case, to Haris Azhar, coordinator of the Commission for Missing Persons and Victims of Violence (KONTRAS), which revealed the involvement of a two-star TNI general in his narcotics network. Nurmantyo then formed an investigative team to trace this information; this team’s tasks included requesting data from the financial transaction reporting and analysis centre (PPATK), coordinating with the head of the National Narcotics Agency (BNN) and reporting the case to the police. Nurmantyo also threatened to fire any of his men who were proven to be involved in narcotics abuse and ordered all main commanders and unit leaders to clean their institutions of narcotics abuse [2]. However, there is no information on the prevalence of unauthorised private enterprise.

The government does not outlaw state enterprise under the umbrella of the state’s defence and security institutions, though the current government is discouraging it [1]. For example, trying to limit the Islamic Revolutionary Guard Corps (IRGC) influence, Rouhani’s government stalled or cancelled some major projects with the IRGC, including a $1.3 billion deal with National Iranian Gas Co. in March 2014 [2]. Although on the whole, there are little or no repercussions applied for those engaged in it, some action against private enterprise in recent times has been taken. According to the Financial Times, one manager of a large holding company affiliated to the guards was arrested a few months ago and cash worth millions of dollars were confiscated from his house, and a brigadier general — described as the corps’ economic brain — was also arrested this year, but released on bail [3].

The government openly operates private enterprises. It is not unauthorised per se. Major sectors of the economy are captured [1]. According to Bjian Khadjepour, the private sector feels pushed out and disadvantaged. He also says that IRGC-affiliated entities have now entered every possible branch of the economy, even football clubs and hotels [2]. The IRGC is also believed to control portions of the underground economy [3].

It is permissible for defence and security institutions to operate private enterprises, they must be officially registered and operate following principles of transparency (1). Neither the ministry of defence or interior are identified as having any, and the law states that armed forces are not subordinate to civilian institutions, armed actors are the true power brokers (2), (3). Evidence of the subordination of civilian institutions to paramilitary and armed groups has become difficult to ignore in the wake of the liberation of Mosul (4).

According to interviewees, there is an unauthorized private enterprise owned by members of militias, who are also members of the armed forces. The government does not outlaw these practices, but turn a blind eye to senior officers who own private enterprises and exploit their positions to gain financial assets(1,2).

The government strictly outlaws any unauthorised private enterprise, with appropriate sanctions in place to deal with offenders (1).

There are some unauthorised private enterprise with a few select individuals or institutions (1). There are several examples (2) (3) (4). However, we did not find any more official information about these enterprises.

The government strictly outlaws any unauthorised private enterprise, with appropriate sanctions in place to deal with offenders. Extra professional activities for the personnel of the Ministry of Defence is regulated by legislative decree 165/2001 [1] and by the Code of the military system [2]. These activities have to be compatible with the duties of the personnel, constitute no conflict of interest, be performed outside of the foreseen working hours, be without character of continuity and assiduity, and be merely isolated and temporary. Even in case of in kind work, there is a need to previously notify this occurrence to the Commander for its evaluation, according to art. 748 of the Code of the military system [3]. For all other cases, a prior ministerial authorisation is required. Should unauthorized private enterprise by military or other Defence Ministry employees occur, sanctions are applied as indicated in both the code of the military system and the presidential decree 90/2010 [4], as well as in the Code of Conduct of the personnel of the ministry [5] and can lead to the termination of contract and eventual additional sanctions should the violation translate in offenses to law.

Unauthorized private involvement used to be a bigger problem [1] [2] [3], but it seems to have been reduced in the last few years [4]. According to the annual report of the anticorruption supervisor, the reported cases of un-authorised activities in 2018 were 42 [5], in 2019 were 32 [6], but no further information is available.

According to Article 60 of the Self-Defence Forces Law, where other legal provisions do not contract this, Self-Defence Force (SDF) personnel must use all of their working time and direct all of their focus as employees on executing their work as employees of the Self-Defence Force. Specifically, they may not have executive positions or be consultants for companies or other organisations that have profit as a goal, nor may they run such an organisation themselves. However, they may do such work if they receive permission from the Minister of Defence or a person with authority delegated from them. [1] These rules apply to SDF personnel who work as civil servants in the Ministry of Defence and subordinate agencies and as SDF officials (uniformed personnel). [2]

A search of two mainstream newspapers from January 1, 2016 – September 20, 2019 uncovered four cases of Self-Defence Force staff being punished for having side employment. All four cases were covered by Yomiuri newspaper, [1] and two of them were covered by Asahi newspaper. [2] All of the cases involved SDF personnel who had had minor part-time jobs at restaurants and similar businesses when they were not on duty for the SDF, and they were punished by temporary suspensions of up to 3 days.

There is myriad of evidence and examples of defence personnel being involved in defence-related private enterprises, as well as corruption related to them [1, 2, 3]. The state of Jordan does not outlaw private enterprise under the umbrella of the state’s defence and security operations. For example, Abdel-Hadi al-Majali, who held defence posts, founded one of Jordan’s first private security enterprises in the country. His son is currently the head of MID Contracting and his cousin Shadi Ramzi heads the KADBB, Jordan’s largest military services private business [4]. These examples provide evidence that private defence-related enterprises are legal in Jordan, however, corruption cases related to these enterprises are usually concerning granting these companies preferential treatment in relation to contracting [2,3,4,5]. According to the military service law, article no. 41: personnel are forbidden to own or have private enterprises that affect their time of duty and service. Thie article does not prevent personnel from owning private enterprises or businesses as long as it does not affect their working time [6].

Defence employees are engaged in unauthorised private enterprises to the extent that some industries are majority captured. The majority of defence-related businesses in Jordan are either run by defence employees or by officials within the Government [1, 2, 3]. It is important to note here that when these businesses are accused of corruption by the media, the journalists get persecuted for defamation [4]. In addition to these being private defence-related enterprises, it seems that they enjoy the same immunity the defence sector enjoys [5,6]. As previously explained, in an environment where publishing news about the armed forces is prohibited, freedom of information and scrutiny around defence is almost non-existent.

The Kenya Defence Forces Act of 2012 section 95, schedule 2, prohibits members of the forces including those in the Defence Council from engagement in trade or private enterprises. [1] Moreover, engaging in private enterprises is also prohibited under section 12 of the Public Officer Ethics Act No. 4 of 2003. Similarly, engaging in private business whilst serving as public officers is prohibited and considered unethical due to potential conflict of interest that may arise as well as using these positions and institutions to enrich themselves. [2, 3] According to the Defence Forces Act, anyone who engages in private enterprise can be convicted by a court-martial, to imprisonment for a term not exceeding two years. In addition, for those in the Defence Council, any person in the Council and contravenes these rules, can be according to the second schedule of the Defence Forces Act be convicted and charged a fine not exceeding three million shillings, or to imprisonment for a term not exceeding seven years, or to both such fines and imprisonment.

Unauthorised private enterprise can be said to be conducted by only a few individuals within the KDF. The reason for this observation is that the KDF is guided by strict prohibitions against illegal enterprise that would cause a conflict of interest or compromise the integrity of a public office; through provisions in the Kenya Defence Forces Act, the Bribery Act and the Public Procurement and Asses Disposal Act. [1, 2, 3]

The legal framework currently in place in the defence sector does not regulate the issue of private enterprises [1]. Ministry of Defence officials have stated that there is no evidence of any unauthorised private enterprise amongst Kosovo Security Forces or Ministry of Defence employees [2].

Ministry of Defence officials have stated that there is no evidence of any unauthorised private enterprise amongst Kosovo Security Forces or Ministry of Defence employees [1]. Further research did also not reveal evidence to confirm or oppose the statement of the Ministry of Defence on this matter.

Even though the institutions do not own commercial business, there are some military and police employees, who do not control or represent these organisations, and who are not linked and occupy different positions and ranks, have over the years privately, independently and individually broken the law and been involved in small-scale enterprises.

Article 14 of the military’s internal law (2) forbids officers from receiving payment in exchange for any kind of work, “work in commerce,” or from utilizing military funds in any way, and article 131 applies the same rules on ministers. ِArticle 15 of the police’s law (1) contains the same provisions but it has a clause that allows officers to manage businesses on behalf of first, second, third and fourth degree relatives.

These laws, however, do not apply to civilians in the Defence or Interior Ministry. According to Kuwait’s military law, the enterprising officers could be investigated by one’s superior or military prosecutors and then referred to a military trial since this is a crime committed by a military employee, but there is no law that explicitly says what sanctions or procedures would follow a conviction.

The police and the KNG, whose views on the matter are not known, fall under the jurisdiction of the military judiciary (3).

Officials, activists and an analyst say that these ministries usually just quietly dismiss the person in question and they do not usually attempt to retrieve or confiscate the illegally acquired money (4, 5, 6, 7, 8 and 9).

The aforementioned unauthorised business activities are common in the Defence and Interior ministries, former and current officials said (1, 2, 3 and 4). These are usually small-scale nepotistic dealings, taking the form of a defence or a police mid-ranking official granting deals with the Ministry to the company of a relative. The deals could be to provide anything from bottled water to chocolates to be put in jars for important official meetings. Most journalists, officials and activists are unable to name enterprises owned by or somehow related to employees from the security agencies. But these officers do not control entire industries or anything of that nature.

There is also public concern over nepotism amongst security leaders, which often have familial and some secretive business ties with the royal family, or with big pro-government families like al-Khorafy, Rashyda, Ghanem or al-Rawad, activists and journalists said. This area appears to be completely untouched by both the media and auditing bodies, and so there is virtually no information available about it.

The Law on the Prevention of Conflict of Interest in Activities of Public Officials ensures the activities of state officials are in the public interest, by preventing the influence of any state official, his relatives or business partners on the activities of a public official, and promoting the openness of public officials and their accountability to the public, as well as public trust in the activities of state officials. [1] The Corruption Prevention and Combating Bureau (KNAB) monitors compliance with the law. [2]

The Law on the Prevention of Conflict of Interest in Activities of Public Officials ensures the activities of state officials are in the public interest, by preventing the influence of any state official, his relatives or business partners on the activities of a public official, and promoting the openness of public officials and their accountability to the public, as well as public trust in the activities of state officials. [1] The Corruption Prevention and Combating Bureau (KNAB) monitors compliance with the law. [2]

The government does not outlaw private enterprise under the umbrella of the defense sector and applicable reprecussions (1).

There are no occurrences of unauthorized private enterprises linked to Lebanon’s defence sector. A source also dismissed the existence of unauthorized private enterprises (1).

The Law on Military Service foresees restrictions applicable to professional military servicemen and all civil servants. Professional military servicemen cannot be elected or appointed to private companies or management bodies; cannot hold another elective or appointed position (except within national defence related companies, institutions or organisations, when management bodies are elected or appointed in accordance with legal acts); cannot work or receive salary from private company; and cannot engage in individual activities (except cases mentioned in the law). In the case that professional military servicemen participate in private company activity (controls company shares, etc.), they have to avoid situations which might cause public and private conflicts of interest [1]. The Law on Public Service, which is applicable to all civil servants, including military or other defence ministry employees, also foresees that civil servants cannot be elected or appointed to companies, organisations, or management bodies and receive salary (except cases stated in the law). However, it is possible that the military, Ministry of Defence members or other employees could have financial interests in private enterprises, but such interests should be declared publicly. The Code of Administrative Offences administrates fines for public and private violations of conflict of interest [2].

There is no evidence of unauthorised private enterprise owned by military personnel or other defence ministry employees [1,2,3,4].

There is no specific law available and there have been no reported incidents of this issue arising. [1]

There is no evidence of unauthorised private enterprise exist in Malaysia. [1]

Mali has legislation that explicitly outlaws state employees, including security officials, from engaging, directly or indirectly, in private enterprises that could compromise their independence.
Article 11 of the General Statute for Civil Servants, which entered into force in 2002 and was amended in 2014, states that:
“It is forbidden for a civil servant to possess, by themselves or via an intermediary of any kind, interests, of a nature that could compromise their independence, in a business that is either subject to the control of their organisation or in any form of relationship with that organisation. A Decree issued by the Council of Ministers states that private commercial activities, which could violate the dignity and the interests of the functioning of the public administration, are prohibited for civil servants”.¹
The General Statute for members of the armed forces, adopted in 2016, is even more stringent. Article 45 of the statute states that:
“Serving members of the armed forces are forbidden from engaging in any profit-making business activity in a professional capacity, regardless of what it is. The conditions under which serving members may exceptionally be made exempt from this restriction are fixed by the decree of the Council of Ministers. Military officials may not, directly or via an intermediary, while they are in service and for a period of five years after terminating their service, have interests, of a nature that could compromise their independence, in a private company subject to their oversight or control”.²
The General Statute for the national police, adopted in 2018, contains a similar clause, but does not go as far as to impose restrictions after officials have left the police. Article 14 states that:
“Police employees may not, regardless of their position, undertake a commercial activity whose nature could discredit the functioning of the police or create an ambiguity that would be prejudicial to the functioning of the police. The employee must also take appropriate measures to safeguard the interests of the service when the activity of his or her spouse is of a nature that could discredit the functioning of the police or create an ambiguity that would be prejudicial to the functioning of the police”.³
None of the three General Statutes cited outline specific sanctions for breaking these clauses, but they do contain sections relating to disciplinary proceedings in cases where officials breach any part of their statute. The statutes contain provisions for the suspension of employees while investigations are undertaken and, in the most serious cases, for the dismissal of officials.¹ ² ³

The assessor has found evidence indicating that unauthorised private enterprise is common, but is largely in the form of illicit and highly informal activities. By contrast, there is no evidence that military figures exercise any control of the formal activities of private businesses.
A defence attaché working at a foreign embassy in Bamako told the assessor that it is common for soldiers to take up informal secondary jobs to supplement their income.¹² The source noted that young recruits are not allowed to be married: only when they have completed basic training and officially become soldiers, entitling them to a basic starting salary, can they marry [10]. As soldiers marry and start to have children their domestic liabilities increase. The stakeholder said that military bases are often half empty because soldiers are out performing manual labour, such as chopping wood, to earn more.¹⁰
The northern parts of Mali have been an important area of transit for smugglers for at least the past ten years following decades of underinvestment and poor governance in the regions.¹ ² ⁵ ⁸ Smuggling of subsidised food, cigarettes, fuel, arms and human-beings have become embedded in the local economies, which for centuries have served as important trading routes across the Sahara Desert.¹ ² ⁵ ⁸ ⁹
Smuggling and the complicity of state officials reached its peak under the government of Amadou Toumani Touré, who was president between 2002 and 2012. As ICG notes “Under the ATT government, relations between the centre of power in Bamako and the periphery rested on a loose network of personal, clientelistic, even mafia-style alliances with regional elites with reversible loyalties rather than on robust democratic institutions.”² During this period, Mali even became a trafficking route for cocaine from Latin America. In 2009, a Boeing 727 carrying up to ten tonnes of cocaine crash-landed after taking off from an airstrip in Gao.³ In 2010, another plane carrying several tonnes of cocaine landed at an air-strip in Kayes, in the west of the country, where it was reportedly received by several local officials, including military officials.³
According to many observers, the military and many politicians were effectively embroiled in organised crime and “have bolstered their political and military positions of power using illegal income”.¹ A report by the Global Initiative against Transnational Organized Crime claimed that illicit trafficking “defined the nature of the political crisis in Mali,” has “entrenched itself into the Malian ethnography,” and has become “thoroughly integrated within political and military structures in northern Mali”.⁹
However, since the collapse of the Malian state in 2012 and the election of IBK in 2013, reports of drug trafficking and any kind of military involvement have dried up amid “some tangible efforts to reform the legal system and tentatively enforce some of the legal mechanisms that exist to tackle such problems”.⁶

Even so, there is still widespread evidence that security officials remain complicit in human trafficking. The Netherlands Institute for International Relations highlights that corruption is particularly visible in the police and security forces, where jobs are distributed as political favours and sold at a price.⁷

“At the dozens of roadblocks along the way to Bamako and Gao, migrants pay a toll of between 1,000 and 5,000 CFA (1.50–7.50 EUR) to the security forces that control them. According to key respondents from the region, the Gao gendarmeries also take migrants off the bus at the city entrance. Migrants reportedly have to pay a tax between 2,000 and 5,000 CFA (3–7.50 EUR) and are then handed over to the smugglers who take them under their wing. In other cases, migrants are arrested after entering Gao, and smugglers pick them up from the police station in exchange for a bribe.”⁷ Security officials are also reportedly implicated in the issuing of false passports.⁷

Nevertheless, the assessor found no concrete evidence to suggest that the country’s main legitimate industries, chief among them gold mining, are captured by military leaders. Gold is by far Mali’s most important export, comprising nearly 70% of total exports in 2016.¹⁰ The mining areas are mainly concentrated in the south and west of the country, specifically in the regions of Sikasso, Kayes and Koulikoro. The sector is dominated by foreign-owned companies, such as Jersey-based Randgold, Toronto-based IAMGOLD, Johannesburg-based AngloGold Ashanti, Vancouver-based B2Gold and Toronto-based Endeavour. These companies are highly professional enterprises that are not subject to the influence or control of Mali’s security organisations.

However, Mali’s weak implementation of taxes on gold exports and lax regulation of artisanal mining has resulted in the country becoming the region’s major hub for illicit gold exports.¹¹ For instance, in 2014, the Malian government recorded that a total of 40 tonnes of gold had been exported from the country.¹¹ Yet, the UAE reported that it had received 59.9 tonnes of gold exports from Mali, indicating a large discrepancy attributable to illicit exports of artisanally-mined gold and gold smuggled into Mali from Côte d’Ivoire.¹¹ Smuggling on this scale strongly suggests a significant degree of complicity on the part of Malian customs officials. In Côte d’Ivoire, it is primarily former soldiers from the Forces Nouvelles rebels, many of whom have yet to be formally integrated into the Ivoirian army, that control the smuggling routes. But there is no evidence that members of the Malian armed forces or defence ministry officials are implicated in the smuggling of gold along the main transit route through Sikasso to Bamako.¹¹

Although the General Law of Administrative Responsibilities prohibits public servants from using their employment, position or commission to obtain any benefit, [1] it is known from journalistic investigations of the existence of companies belonging to retired military personnel, which provide services for security by taking advantage of their knowledge and links with SEDENA, for example, to obtain weapons permits. [2] [3] [4] There does not appear to be any legal restriction on private enterprise.

There is no information on defence employees who participate in private companies. However, it is known from investigations that Army deserters have joined the ranks of criminal groups such as cartels. [1] [2] Specialists on the subject point out that due to their training they are wanted by organised crime, [3] which does not exempt active members.

According to the law, a person engaged in the army cannot at the same time be engaged in entrepreneurship, [1] but there are no clear provisions on sanctions. If officials are performing other jobs in the private sector they are obliged to request the approval of the Ministry. [2]

Public officials are required to transfer management over their companies to other, non-connected individuals. [3]

Major media outlets did not report on any cases of defence employees being engaged in unauthorised private enterprise. [1][2][3][4][5]
The Ministry, NGOs and trade union activists are not aware of such cases. [6][7][8][9][10] The institution responsible for oversight of this is not independent and does not have a track record of results in processing such cases, according to the EC. [11] That institution is the Agency for Prevention of Corruption.

No legislation was found to suggest that the government prohibits military personnel from owning private enterprises. (1)(2)

Examples exist of unauthorised private enterprise run by high-ranking military or other defence ministry employees, as shown in the 1998 allegation of Captain Adib against his superior (heading the Royal Air Force base of the Errachidia region) (1)(2)(3).

Interviewees raised a more recent case of unauthorised private enterprise run by high-ranking military or other defence ministry employees, highlighting the drug trafficking case in Western Sahara in 2007 (4)(5). They also underlined the fact that due to heavy military presence in the Western Sahara region where other public bodies and CSOs are limited, the armed forces have more power there. No more recent evidence of such unauthorised enterprise was found in either the media or CSOs reports.

MEHL and MEC were transformed into public companies in April 2016. Before being transformed into public companies, these companies had two types of shares: A type, owned by the Ministry of Defence, and B type, owned by incumbent and retired military personnel. After the companies’ transformation, their A-type shares were transferred to B-type shares. The government did not take any action with regard to the fact that incumbent military personnel were shareholders, directors and patrons of MEHL and MEC, although the government decided that the involvement of civil service personnel in military-owned businesses is illegal according to the Civil Service Personnel Law of 2013 [1]. Military personnel and police are not civil service personnel according to the law [2]. So, the involvement of defence personnel in military-owned enterprises is not illegal and so the government has not prohibited this involvement.

In May 2020, local media outlet Myanmar Now conducted an investigation and discovered that the Chiefs of Port Authority and Customs are the Directors of MEC and MEHL [3]. Zaw Htay, spokesperson for the President’s Office, requested the Union Attorney General’s Office to check whether or not the fact that the role of Director at MEHL and MEC was held by senior government officials constituted a conflict of interest. The Union Attorney General’s Office responded that it is illegal for them to be directors pursuant to the 2013 Civil Service Personnel Law [1]. This is the first time the government has responded to the fact that senior government officials are also directors of military-affiliated businesses. Even the Chairperson of the Anti-Corruption Commission is a shareholder of MEHL, which is related to the military [4]. Although the Fact-Finding Mission’s report urged the government to impose sanctions on military-owned businesses, Myanmar’s government opposed the idea [5].

According to the UN’s Independent International Fact-Finding Mission’s report, MEHL and MEC are military-owned business corporations that control a wide range of business activities [1]. These companies are legal public companies [2]. However, these companies have conducted many illegal businesses [3]. The patron groups, including the C-in-C of the armed forces, are involved in the illegal businesses and the illegal businesses of MEHL and MEC are run by defence service personnel [1].

Military and defence employees are prohibited from engaging in unauthorised private enterprise under Chapter 11a (‘Integrity’) of the General Military Personnel Code (Dutch: Algemeen Militair Ambtenarenreglement), which includes provisions on (financial) conflicts of interest, participation in companies, foundations and associations and ancillary activities [1]. The Secretary General directive SG A/984 ‘Implementation of Defence Integrity Policy’ and the Code of Conduct for Defence reinforce this law and state that all financial interests must be reported and then evaluated by the head of the defence division [2,3]. The Central Defence Integrity Organisation (COID) is the unit responsible for dealing with any possible breaches of these rules. In 2019, seven complaints were made to the COID for ‘abuse of position, conflict of interest and powers’ [4]. However, this category could easily include situations other than unauthorised public enterprise. In the event that an incident were to occur, the COID lists several actions taken as a result of integrity violations, including termination of employment, official reprimands and displacement [4].

There is no evidence to suggest that unauthorised private enterprise occurs.

The Ministry and the NZDF have secondary employment policies. The MoD’s policy sets the expectation that ministry staff must seek the approval of their manager prior to undertaking secondary employment. Approval is required to determine that any secondary employment does not impact on the ability of the employee to fulfil their role at the ministry [1]. The NZDF has similarly always maintained a Defence Force Order (DFO) that sets the criteria, approval, and reporting criteria for Secondary Employment. These provisions are currently under review and undergoing further development but will continue to be included DFO 3, Part 9, Chapter 4 [2]. Additionally, ministry employees, board members, and senior NZDF staff are required to declare any conflicts of interest. These declarations are audited as part of the annual audit by the Auditor-General, who has powers of investigation under the Public Finance Act [3]. Ministry and NZDF governance committees regularly begin by asking those present to declare if they have any potential or actual conflicts of interest, in relation to the matters to be discussed in the meeting. This is recorded in the minutes of the meeting. If any conflicts are identified, when the substantive agenda item comes up, the individual may be asked to leave the room for the discussion, which is also recorded in the meeting minutes.

Finally, all Public Service chief executives (including the chief executive of the Ministry of Defence) are subject to post-employment restrictions through their contract of employment with the Public Services Commissioner [4]. Ministry of Defence employees are subject to the Public Service Commissioner’s Standards of Integrity and Conduct (the Code), as stipulated within the Public Service Act 2020 [5]. Detailed information is freely available online and every state servant is expected to abide by the code [6].
The Conflict of Interests Model Standards set out the minimum requirements expected for handling conflicts of interest. The Model Standards require interests that may give rise to a conflict to be disclosed, recorded in a central register, monitored, and frequently reviewed. Senior members are expected to set an example in identifying and disclosing any interests relevant to their work given their level of influence on decisions about matters of public significance or value and their higher public profile.
More specifically, failure to disclose pecuniary interest in a contract can incur a penalty of up to seven years imprisonment under the Secret Commissions Act 1910 [7]. Private enterprise activities of a nature that could be deemed as corruption and bribery may incur penalties of seven to 14 years imprisonment, depending on the offender [8].

Several NZDF individuals have been investigated over the past decade around issues of secondary employment [1]. An investigation report released in 2016 by the OAG found that the NZDF’s rules around secondary employment had been breached in a minor ($100,000) contract to supply life-jackets to the NZDF [2, 3]. The OAG noted that, given the size of the Defence Force appropriations and the small value of the contract involved, this represented a minor example and that no illegal activities were found to have occurred. No other instances are known.

The assessor did not find evidence of any military involvement in private enterprise, the interviewees agreed that this was unlikely (1,2). Furthermore, as noted in sub-question 32a, art. 129 of the public penal code provides for strict regulations around which public officials can be involved in private business. Sanctions range from 100 000 FCFA to 1 million FCFA and, at least, two years of imprisonment (3). The assessor did not find evidence of any military involvement in private enterprises.

No evidence was found of the existence of unauthorised private enterprises by the military (1,2) .

Internal rules of the military and other civil service rules prohibit private enterprise. The general civil service rule is commonly understood to prevent the involvement of civil servants in any other business or similar activity except for farming. The response of the government to the involvement of defence officials in private enterprise has been slow. Despite some public comments against the practice, very few measures have been implemented to curb unauthorized private enterprise (1).

Unauthorised private enterprise is widely pursued by individuals rather than institutions. The normal civil service rule prohibiting such activity is in existence; however, the enforcement of the rule is not always consistent across the civil service (1).

The response of the government to the involvement of defence officials in private enterprise has been slow. Despite some public comments against the practice, very few measures have been implemented to curb such activities. Nigerian civil service rules prohibit private practice while employed (Private Practice rule 030426 Public service Rules) (1).

The Law on Civil Servants [1] and the Law on Prevention of Conflict of Interests [2] define and regulate illegal aspects of unauthorised private enterprise for civil servants. The first law outlaws “private financial interest” in conflict with the status and position of civil servant (Article 73/20) [1] and prescribes necessary disciplinary measures such as 30% salary cuts, demotions of dismissal from work (Article 74/2) [1]. The second law prevents abuse of power and “the possibility for the private interests of the official person to come into conflict with the public interests” (Article 2) [2]. The authority responsible for the implementation of this Law is the State Commission for Prevention of Corruption (Article 1) [2]. Both these laws apply to civil staff of the Ministry of Defence. The Law on Army Service [3] outlaws private financial interests of military and civilian personnel (Article 131/24) [3] and outlines measures such as 10-30 percent salary cuts, promotion bans, loss of rank and dismissal from work (Article 132) [3]. The Ministry of Defence also follows Codes of Ethics which regulate private financial interest, conflict of interest and corrupt behaviour of any Ministry of Defence and Army employees (Articles 9 and 10) [3].

There is no evidence of unauthorised private enterprise by Ministry of Defence or Army employees [1]. That said, no media investigations or reports on private enterprise in the defence sector are publicly available.

The Ethical Guidelines for the Public Service specify that public officials may not take extra jobs, second jobs, board jobs, or other paid work that is incompatible with the employer’s legitimate interests or liable to weaken trust in public administration [1]. Further, public officials may not hold securities in a company if doing so may lead to a conflict of interests. Employees are obliged to provide their employer with any relevant information in this regard. It is up to the employer to decide what sanctions will apply if an employee contravenes the rules. Sanctions may include the prohibition on holding and trading of securities; requirement to sell the securities; and the obligation to provide information about the steps taken to obey the received sanctions. In addition, the Public Administration Act regulates rules of impartiality for public officials [2]. The act states that a public official shall be disqualified from preparing the basis for a decision or from making any decision in an administrative case if he/she is the head of, holds a senior position in or is a member of the board of directors or the corporate assembly of a company which is party to the case. Part F of the Employee Handbook for the Norwegian Armed Forces adapts these rules to military personnel and highlights how rules of impartiality limit possibilities to take extra jobs, second jobs, board jobs or other paid work [3]. The handbook provides examples of private enterprise which may compromise the reputation of the Norwegian Armed Forces and be incompatible with their legitimate interests: work for or ownership of a private security company; interests in a private enterprise negotiating a procurement contract with the Norwegian Armed Forces; and representing or providing consultant services for a supplier to the administration unit where the person is employed.

A search of Norway’s main news sources gave no indication that unauthorised private enterprise is a problem within the Norwegian defence sector [1].

There is no specific legislation outlawing private enterprise under the umbrella of state and security operations (1). Royal Decrees 36/2008 and 120/2011, relate to relations between ministries and private companies and are concerned with tenders prohibiting personal business interests. Additionally, the Anti-Corruption Law 112/2011 and penal code, prohibit employees in the public sector from accepting bribes, the embezzlement of public funds, or granting unjustified preferential treatment (2), (3). According to this legislation, ministers are not allowed to hold office in state-owned businesses, or serve as chairperson to private businesses; however, this is rarely enforced and many influential figures in government hold private business interests (4). No cases of unauthorised private enterprise by defence or military employees were found.

Businesses and enterprises can not operate in Oman without authorization from the relevant institutions and ministries (1). The government operates businesses according to the law and with authority from relevant institutions (2), (3).

There is no evidence or information on private businesses or companies operating under the umbrella of the national forces or security apparatuses from 2004 (1). As such a law that prohibits these practices does not exist. Before 2005, there was one business affiliated with the financial department of the national forces. However, it was stopped via presidential decree. The Military Employment Law prohibits these practices (2), (3).

There are no private companies managed by the national forces. No high-ranking officers or institutions own businesses (1). Low-ranking officers may operate private enterprises (ordinary businesses) but they have to be approved, and registered under the names of their relatives. Additionally, many security personnel might not own a business, but they might have a second job like working on a taxi, or even in private security company to secure restaurants and bars. The involvement of senior security officials in businesses remains unclear.

There is no outright prohibition on Philippine military or defence employees becoming involved in private enterprise, although the COA has called out the navy for acting as a collecting agent of private lending firms and making unauthorised deductions from the salaries of military personnel [1]. Further, according to published reports, some elite members of the army and Special Action Force from the police were allegedly being used as bodyguards by retired military and police generals, who were reportedly able to acquire small town lotto franchises that were eventually used as fronts for illegal gambling [2].

As noted in 33A, some members of the army and the police were allegedly being used as bodyguards by retired military and police generals, who were reportedly able to acquire small town lotto franchises that were eventually used as fronts for illegal gambling [1]. However allegations of this type are not new: in 2008, the then-President Arroyo ordered the military to guard mining sites against communist rebels, dubbing them “investment defence forces” [2]. Even the Army has offered to organise, equip, train and supervise three special civilian active auxiliary units to guard private mining companies [3]. Their role extended to ending territorial disputes by silencing local farmers and indigenous landholders who refused to give up their land [4]. Such actions continue to this day, when the military is able to break up protests and provide security for company officials [5].

The Professional Soldiers’ Military Service Act of 2003, Article 56, generally forbids meaningful employment for the military personnel in private enterprises, as long as they remain on active duty. Therefore, it is prohibited by law for senior and mid-level civil servants in the ministry. However, there are no prohibitions or limitations for junior civil servants in the ministry and civilian personnel in the armed forces. Military personnel can hold additional posts if these do not conflict with the performance of duties and provided that permission has been granted by the commanding officer of the unit [1, 2, 3]. The Civil Service Act of 2008, Article 80, paragraph 2 applies similar regulations to the civil service, including the civilian employees of the Ministry of National Defence [4]. A legal analysis indicates that possible sanctions are disciplinary only. The execution of limitations is left to the soldiers’ or civil servants’ supervisors. The effectiveness of these provisions enforcement is therefore questionable.

It is difficult to assess the prevalence of the phenomenon in the army. There are no reports or media stories on the subject; therefore, it is probably not a significant problem. However, due to the regulations described [1, 2, 3], there is a risk that there are uncaptured private enterprises; for example, businesses run by soldiers’ or servants’ spouses.

Unauthorised private enterprise by the military [1] and civil [2] personnel in the defence sector (Ministry of Defence and the armed forces) is outlawed by the Statute of the Armed Forces Military Staff. Sanctions differ according to the gravity of activity by the military [2, 3] or civil [4, 5] status of persons involved.

There is evidence that illegal private ventures occur, albeit non-systematically. A recent trial of Portuguese Air Force officers sentenced for procurement-related corruption involved 68 plaintiffs, including 30 military staff [1]. The Tancos affair involves allegations of small arms trafficking [2], and a Portuguese Army sergeant was recently convicted for aggravated small arms trafficking [3]. Guarda Nacional Republicana (a territorial police force with military status) officers are also known to have been involved in alleged corruption cases recently [4, 5].

There is no evidence of an unauthorized private enterprise run by the military or the Ministry of Defence. The private enterprises run by the army are legal and operate according to the law [1,2,3].

There are no cases where unauthorized private companies can operate in Qatar or be run by the military/ MoD. The companies must be legal and registered, yet they enjoy more secrecy regarding their financial and administrative operations [1,2,3].

Article 17 (Clause 3) of Federal Law No. 79 ‘On State Civil Service’ [1], Article 10 (Clause 7) of the federal law ‘On the Status of Military Servicemen’ [2] and Article 12 (Clause 3) of the federal law ‘On Anti-Corruption’ [3] prohibits civil servants from owning, either directly or via an intermediary, and/or participating in the management of business enterprises or engaging in commercial activities in any way. Sanctions include disciplinary penalties, termination of employment and deprivation of the right to hold determined posts. Accordingly, every MoD serviceperson publishes their personal and family members’ incomes on the MoD website [4].

Since the notorious case of grand corruption by former Minister of Defence Serdyukov in 2012, it seems that unauthorised private enterprises are still a common occurrence among top-tier personnel. MoD officials declare latifundia in their annual income reports [1,2,3]. Journalists claim that the price of such highly expensive real estate is incompatible with their salaries [4,5]. The Accounts Chamber, however, discloses the exact salaries of MoD management [6,7].

In addition, the fact that MoD officials’ spouses appear to be millionaires and own big businesses also throws up questions as to whether the conflict of interest regulations are being complied with [2,3].

Article 14 of the Saudi Civil Code prohibits government employees from working in the private sector, and from engaging in specific commercial activities, such as contracting or establishing and managing a company. Ministers and other senior government officials appointed by a royal decree are prohibited from involvement in commercial activities with their ministry or organization during their public tenure (1). According to our sources, although there are these laws, many officials from the royal family do not abide by them (2).

According to our sources, no unauthorized enterprises are operating in KSA. All enterprises are authorized by the law or by royal decree (1). In practice, it has historically been common for government employees, specifically senior government military and defence officials, to be involved in business activities, including in the defence sector. Analysts at US-based think tanks have suggested these princes include Khaled bin Sultan, Saudi deputy minister of defence between 2011 and 2013, who allegedly “reaped unseemly personal financial gain” from the logistical aspects of the Gulf War (2). Other examples include Miteb bin Abdullah, the erstwhile chief of the Saudi Arabian National Guard. He allegedly controlled several private companies that supplied equipment to the Saudi military, such as a USD 10 billion deal for walkie talkies and bulletproof military gear that was awarded to one of his firms (3).
It is clear that these practices have been prevalent, and the Saudi government has turned a blind eye to them. Historically, there has been no evidence of penalties incurred by military or defence employees engaged in private enterprise. The exception to this is Miteb bin Abdullah’s arrest in November 2017 as part of Crown Prince Mohammed bin Salman’s broad anti-corruption sweep. However, charges against Miteb centred on fraud and corruption, for example through allegedly awarding contracts to his firms and inflating these contracts, rather than the fact that he owned and operated private enterprises that supplied the Saudi military.
There is no further evidence of military or defence ministry employees being penalized over unauthorized private enterprise, and it does not seem that the Saudi government enforces the abovementioned prohibition. The line between public and private money in the country has always been notoriously difficult to discern, and the government has not in the past actively moved to obstruct senior defence officials and princes from pursuing private business interests. It remains to be seen whether this reality will change under Mohammed bin Salman’s rule, given that he has attempted to impose stricter controls on the finances and business interests of government officials and princes while boosting the central government’s reserves (4).

The Law on Civil Servants explicitly lists founding and managing private enterprises and taking up a high management position in any legal entity under severe disciplinary breaches [1]. Sanctions for such breaches range from salary reduction by 20-30% to dismissal from work [1]. The same disciplinary breaches used to be listed in the Law on the Serbian Armed Forces until 2015, when these provisions were deleted without due explanation [2]. Since the Law on the SAF does not regulate this area any more, the provisions of the Law on Civil Servants apply to members of the SAF, too. Nonetheless, concerns have been raised that those who implement legislation regard only particular laws (in this case the Law on the SAF), and may easily neglect other relevant legal acts [3].

There is no publicly available evidence suggesting that individual personnel own commercial businesses.

There are strict regulations in place that expressly prohibits the Singapore Armed Forces (SAF) and the Ministry of Defence (MINDEF) personnel from engaging in private enterprise [1, 2, 3]. Preventive measures also include an annual self-declaration exercise that all personnel must undertake, where any indebtedness or investment must be professed [4]. When detected, there is evidence that disciplinary action and/or legal action has been applied to those found guilty of such violations [5].

Despite strict legislation, there have nevertheless been cases of unauthorised private enterprise (though exceedingly rare) although as earlier highlighted these have resulted in considerable fines and sentences. For example, a former Republic of Singapore Air Force (RSAF) officer was found guilty of cheating the government by funnelling maintenance work to companies that he incorporated or was involved with to the tune of S$1.8 million. He was subsequently fined and jailed [1, 2].

Civilian [1] and military[2] employees of the Department of Defence (DoD) are required to seek explicit authorisation for any remunerated work outside of their regular employment. Chief of Human Resources Instruction 93/2016 specifically forbids DoD employees from doing business with the state [3].

Additionally, Regulation 16A8.4 of the Public Finance Management Act (PFMA) requires that any supply chain management official, or any role player, close family member, partner or associate of that official that has any private or business interest in a contract to be awarded, the official must disclose that interest and withdraw from participating in the process [4].

There are rare instances where unauthorised private businesses or enterprises are engaged, but is by no means the norm.

Military personnel are strictly banned from engaging in any type of profit-making activities under the terms of the Framework Act on Military Status and Service. [1] Those who breach the law are punished under the terms of the Military Personnel Management Act. Punishments vary depending on the actions, and those found guilty can be detained in a guardhouse in a military unit. [2] However, there have been occasional delays in delivering appropriate punishments promptly at the military level. In 2018, a media report revealed that a South Korean navy was accused of fraud by multiple victims. However, military prosecutors have failed to provide timely prosecution, resulting in more victims. [3]

A review of media sources, relevant laws and interviews with senior staff of the National Assembly National Defence Committee and a senior defence journalist indicate that unauthorised private enterprise by military personnel is a problem concerning a few individuals, rather than a systemic problem. [1] [2] There have been a few cases identified through media sources. In one of the examples, in 2017, a soldier serving with the Korean Augmentation to the United States Army was caught operating a brothel in Seoul. [3]

Private enterprise is not permitted by law for civilian employees in defence and for military personnel as outlined in the Civil Service Act and the SPLA Act. [1] [2]But private enterprise is common among top-level officials in the defence sector. Such officials have been documented owning various types of businesses or being shareholders. These businesses include mining, real estate, construction and arms transactions. [3] [4] The government has turned a blind eye to such enterprises undertaken by defence/security officials. In fact, in some cases, officials allegedly involved in corruption have been promoted.

Unauthorised private enterprise is common among top-level officials in the defence sector. Such officials have been documented owning or being shareholders in various types of businesses. These businesses include mining, real estate, construction and arms transactions. [1] [2] The government has turned a blind eye to such enterprises by defence/security officials. In fact, in some cases, officials fingered for corruption have been promoted. For instance, the current Chief of Defence Forces, General Johnson Juma Okot (commonly known as JJ Okot) was accused of using his position to secure funding for one of his companies from the army in 2016 as well as misappropriating salaries for Division Six based in the town of Rumbek. [3] Despite this record showing corruption, the President promoted him to the position of Army Chief in May 2019 [4].

Military personnel are subject to conflict of interest of personnel of the service of public administrations, as stated in Article 2 of Law 53/1984, which regulates the regime of conflict of interest of personnel at the service of Public Administrations [1] and which is developed by Royal Decree 598/1985, of 30 April [2]. This regulation does not allow the development of private activities, with exceptions for which prior authorisation is required [3].
Sanctions for breaching this are regulated by Article 11 of the Organic Law 8/2014 on the Disciplinary Regime of the Armed Forces [4], there can be an arrest of weeks, a loss of appointment, and suspension of employment or separation from service, among other reprimands.

Even though there is no evidence of unauthorised military companies, according to Interviewee 1c, sometimes there are companies of family members of military or former military personnel who are defence providers [1]. Moreover, although there is an official program devoted to helping the transition from a military to civil work environment, SAPROMIL, there is no data available about the weight of companies with ex-military members in defence sector contracts [2].

The possible impact of high-ranking officers being hired by arms companies has been a question of concern, feeding the revolving doors practice into the Spanish defence sector. The aforementioned case of former Minister of Defence Pedro Morenés is one of the more paradigmatic cases because he was appointed as Minister of Defence after having important positions in several arms companies (MBDA; Instalaza, Sapa Placencia) and he has been appointed president of the board of Amper Ingenio, part of the Group Amper, a defence company [3].

No evidence can be found that the government outlaws private enterprise under the umbrella of state defence and security operations. In fact, the Military Industrial Corporation (MIC) is an enormous conglomeration of industrial and commercial activities owned by the state’s defence and security operations, including ammunition and weapons firms, meat and bread flour production and electronic devices – just to name a few [1]. Transparency International’s 2017 report on corruption and anti-corruption in Sudan notes that at least 164 companies across many services and industries ‘are owned or controlled by NCP military, police and NISS officials’ [2]. Thoughout 2020, the transitional government has been in the process of reviewing, discussing and taking initial actions to privatise some ‘industrial and commercial companies of the Sudanese Army’ and/or ‘convert the army’s companies operating in non-military fields into public joint-stock companies under the civil code and observing the rules of transparency and oversight’ [1].

No evidence can be found that the government outlaws private enterprise under the umbrella of state defence and security operations. In fact, the Military Industrial Corporation (MIC) is an enormous conglomeration of industrial and commercial activities owned by the state’s defence and security operations, including ammunition and weapons firms, meat and bread flour production and electronic devices – just to name a few [1]. Transparency International’s 2017 report on corruption and anti-corruption in Sudan notes that at least 164 companies across many services and industries ‘are owned or controlled by NCP military, police and NISS officials’ [2]. The regime has essentially legalised its own kleptocratic avenues for self-enrichment by officials. Furthermore, if a broader scope of ‘private enterprise’ is applied, it is possible to characterise as unauthorised private enterprise (in the sense that it might be unofficially sanctioned or even informally authorised, but potentially found not to be legal if an investigation were allowed) the RSF’s alleged imposition of checkpoint tolls on the roads it controls, as well as its informal involvement in trafficking networks throughout broad parts of the country and possibly abroad [3,4,5,6] – but Sudan’s 1991 Criminal Law forbids bribery behaviours by the public and public servants alike, and it defines ‘public servant’ as ‘any person appointed by a public authority to undertake a public office’. As such, perhaps only senior RSF officials formally holding government office could be said to be breaking the law by using their status to benefit from kickbacks gained through bribe extraction networks executed by soldiers in different parts of the country. The soldiers would presumably not constitute ‘public servants’. Furthermore, many of them still may not appear on any formal roster of government personnel, so even if they were locally using this form of ‘private enterprise’ to gain from their membership in the RSF, it’s not clear whether the law could, even in theory, hold them accountable for their participation in a bribery enterprise that leverages their military status. Rather, it might just be outright extortion. This is a grey area that essentially allows for the vast prevalence of abuse of military affiliation for private enterprise in a way that is basically not only legal and openly acknowledged, but can be perceived by the past and current governments as proper ‘governance as intended’ by their own machinations.

The government does not explicitly outlaw private enterprises. Defined as ‘bisyssla’ (translated to ‘sideline activity’ or ‘additional job’), the law on public employment states that ‘an employee may not be employed or partake in an assignment or carry out any activity that could call into question his [sic] or another employee’s impartial nature in their work or that could harm the agency’s image’ [1]. However, the enforcement of this principle is weak and inefficient in practice, since it is the responsibility of the individual civil servant to define and report any ‘bisyssla’ and the responsibility of the employer to assess it as potentially unauthorised [1]. The system thus rests upon the honesty and trustworthiness of the employee, rather than a detailed framework of legal definitions and sanctions.

Unauthorised private enterprise is a problem with a few select individuals or institutions. The media has exposed corrupt behaviour in the defence minister’s closest staff, forcing his press secretary to resign in 2018 [1]. An Uppsala University professor of law called the press secretary’s multiple connections to the private sector a ‘clear conflict of interest’ [2] (see also Q34B).

The Federal Personnel Law (Bundespersonalgesetz BPG), as well as the Federal Personnel Ordinance (Bundespersonalverordnung BPV), contain provisions on private enterprise for government officials. These rules also apply to DDPS personnel. The BPG prohibits employees from remunerated work for third parties if it is “in violation of their duty of loyalty [Treuepflicht]” (Article 20). The law also opens up the option of making certain types of secondary employment subject to prior approval if they might affect the ability of the employee to do her/his work (Article 23) [1]. The BPV requests that paid secondary jobs have to be reported to the superior and if a conflict of interest cannot be ruled out, approval has to be denied (Article 91). The ordinance also states that employees have to recuse themselves if there is the potential of a conflict of interest in relation to another activity they conduct, including any kind of business (Article 94a) [2]. These rules are also referenced and reiterated in the Codex for federal employees [3]. The largely conscription based system creates potential conflicts of interest. In 2019 newspaper reports uncovered that a pilot and high ranking officer was allegedly hired by Saab to lobby for the Gripen fighter jet Switzerland was considering buying. The officer was released of his duties as spokesperson of the “Patrouille Suisse” but remained at the DDPS in his role as Head of Special Staff Communication (Chef Fachstab Kommunikation) [4].

In 2016 the internal audit of the Federal Department of Defence, Civil Protection and Sport (DDPS) published a report on conflicts of interests amongst the senior management (“Top Kader” defined as salary class 30 or upwards). It distinguished between “effective conflict of interests” and “apparent conflict of interests” and looked at 182 employees. The focus of the audit was on direct commercial enterprises and did not include relatives or people from the close circle of the employees. The audit found one effective conflict of interest and a number of apparent conflicts. However, the exact number was not divulged and the corresponding annexe was classified for the protection of personal data. The exact extent is thus unknown [1]. The report concluded that there was a considerable reputational risk for the DDPS, and the ministry said that it became active and has taken measures after receiving the report [2]. There was at least one report in the media about a specific conflict of interest during the reporting period, but it was not fully addressed by the government. In 2019 newspaper reports uncovered that a pilot and high ranking officer was allegedly hired by Saab to lobby for the Gripen fighter jet Switzerland was considering buying. The officer was released of his duties as spokesperson of the “Patrouille Suisse” but remained at the DDPS in his role as Head of Special Staff Communication (Chef Fachstab Kommunikation) [3].

Military personnel in Taiwan’s armed forces are regarded as “Public Servants” as well in a broad sense. Laws and regulations applicable to civilian officials are applicable to the military too. Military and civilian personnel in either the MND or the NSB are all strictly prohibited from operating or involving in private enterprise [1]. Strict punishments will be applied for any violations, including sentence, demotion, expulsion, and fines [2, 3].

Under strict regulations and punishments for violation, unauthorised private enterprise does not occur in either the MND or NSB [1, 2, 3, 4]. Unauthorised private enterprise of the military is not reported by the media or identified in Taiwan.

Public officials, including the military, are allowed to engage in business. The Public Leadership Code of Ethics Act 1995, [1] and the Code of Ethics and Conduct for the Public Service Tanzania [2], deal with issues of conflict of private interest with public office, but do not explicitly outlaw engagement in private enterprise.

There is not enough information to score this indicator. Open source data did not provide any evidence of unauthorised private enterprise. However, to comprehensively answer this question would require extensive access to private business records, and internal information in the defence sector dealing with conflict of interes; this is currently not possible.

In Thailand, the government does not outlaw private enterprise under the umbrella of the state’s defence and security operations, and there is no legislation outlawing private enterprises under the military. The military has a long tradition of involvement in business and it is an open secret that some officers branch out into private business deals; many senior military officers are involved in real estate, especially in Thailand’s rural areas. In February 2020, after the mass shooting incident in Korat, General Apirat Kongsompong admitted that the military has long been stained by alleged irregularities in issues relating to military-own businesses, ranging from welfare housing to loans, sporting facilities, boxing stadiums, golf courses and resorts [1]. These off-the-books enterprises are rooted in decades of military privilege and their earnings facilitate military culture. The February shooting also coincided with parliamentary scrutiny of off-budget funds, which are believed to be connected to the military’s shady businesses [2].

According to Interviewee 1, a political scientist, the government only has a stern reaction to military involvement in business when the media exposes it and public opinion is clearly against these activities. This is illustrated by the 2016 case of General Manas Kongpaen involving the commercial human trafficking of Rohingya. Then, there is the case of Army Chief General Apirat Kongsompong launching an investigation in February 2020 into the land scandal involving the mass murdering army official in Khorat and also announcing in early 2020 that the military would even place its businesses under the control of the Ministry of Finance [3].

According to Interviewee 1, a political scientist, private enterprises are fairly commonplace but often involve senior military shareholders in illicit businesses, working with civilians and providing the ‘muscle’ or apparent legal legitimacy to sustain the businesses [1]. Research by Ukrist Pathmanand and Michael K. Connors (2019), also outlines that defence employees have frequently been seated as committee members of many private enterprises’ boards. The scholars explained that the relationship between soldiers and Thai-Chinese millionaires had been rooted for more than 80 years. Because the Thai-Chinese businessmen were commonly discriminated, so they often invited high-rank military officers to join the board of committees or become their shareholders in exchange of political protection [2,3]. Another example of unauthorised business of many military officers is to facilitate grey business such as the case of General Manas Kongpan who was found to engage in human smuggling. Nonetheless, he was sentenced 27 years in prison for smuggling Rohingya Muslims from Myanmar [3,4].

Article 30 of the law n° 67-20, dated 31 May 1967, on the General Status of the Military, states that it is forbidden for the military to practice a commercial profession, to do a private remunerated activity, or to take positions in commercial companies as directors, administrators or managers (1). According to our resources, there are no private companies owned by the military as they are forbidden by law(2).

According to our sources, there is no evidence of unauthorised privet enterprises (1).

The legal framework strictly outlaws any unauthorised private enterprise conducted by the military or other Ministry of Defence employees under the cover of the State’s defence and security operations [1]. According to follow-up Article 1 of Law No. 1632 (Military Penal Code), it is forbidden for military personnel (generals, officers, NGOs, contracted soldiers, reserve officers) to have private business firms or to work in a private business firm during his/her active military service [2].

Unauthorised private enterprises do not occur because it is illegal for both military and civilian personnel in the sector to get involved in private business activities, as stipulated by Article 27 of Law No. 657 for Public and Civil Servants, which regulates the behaviour of civil servants [1]. According to Article 28 of the Law for Public and Civil Servants, civil servants who violate this ban on being a shareholder/owner of a private company are punished with dishonorable discharge from the government service [1].

In practice, the legislation detailed above is strictly followed by the military and civilian personnel of the Ministry of Defence and the General Staff. Every year, the Ministry of Defence requires personnel to declare their savings/property and business activities, as regulated by Article 14 of Law No. 657 for Public and Civil Servants [1]. This document also requires business activities to be reported if they exist, so that they can be cross-checked with the database of the Ministry of Trade. Therefore, as emphasised unanimously by all interviewees, it is almost impossible for military personnel to open a private business and sustainably maintain it [2,3,4,5,6,7].

Section 37 (1) of the Uganda Peoples’ Defence Force (UPDF) Act [1] imposes restrictions on the military during full-time service. It states that subject to subsection (2), no officer or militant on continuing full-time military service shall engage in any civil employment or undertaking which is; a) likely to be detrimental to the interests of the defence forces; b) reflects or likely to reflect discredit upon the defence forces. Subsection 3 states that without prejudice to the general effect of subsection (1), the minister may, by regulations made under this act, specify the types of business that officers and militants shall not engage in. However, there are no clear sanctions in case of breach of these regulations.

According to the UPDF mandate[1], the army is not allowed to engage in any unauthorised private enterprise, which is in accordance with Articles 208 and 209 of the Constitution [2]. Section 209 states outline the functions of the defence forces are; (a) to preserve and defend the sovereignty and territorial integrity of Uganda; (b) to cooperate with the civilian authority in emergency situations and in cases of natural disasters; (c) to foster harmony and understanding between the defence forces and civilians; and (d) to engage in productive activities for the development of Uganda. In any case, there have been no reported cases of unauthorised businesses maintained by the army. If they exist, they are run as individuals not by the army as an institution, and if it is actully there, then they are secretly run and are unknown to the public.

Ukrainian legislation provides the list of the AFU functions as well as the list of activities the AFU may be involved in [1]. The AFU can carry out economic activities according to the law, and the MoD controls compliance with the law for the AFU [1]. The Law On the Armed Forces of Ukraine prohibits the AFU from restricting the rights and freedoms of citizens etc. However, it does not have any specific regulation which prohibits unauthorized private enterprise. At the same time, public officers, including military staff, are prohibited from engaging in any profitable activity while being in office [2]. Moreover, Ukrainian legislation provides a penalty for that under Article 172-4 of the Administrative Offence Code of Ukraine [3].

There is strong evidence that individual AFU servicemen, as well as senior representatives of other defence and security forces, might be involved in illegal trade with the occupied territories in eastern Ukraine [1]. According to a NAKO report, individual servicemen let lorries with goods pass across the front line and provide them protection. Additionally, there is evidence that some MoD officers are involved in corruption in the housing [2] and fuel [3, 4] sectors.

Within the general labour law of the UAE, there are prohibitions within the Labour Law, Federal Law No, 8 of 1980, restricting public sector employees from running unauthorised private enterprises (1). There are also special laws for the armed forces that prohibit armed forces officers from engaging in unauthorised private enterprises, working with third parties and having a direct or indirect interest in any work, agreements or contracts with the armed forces (2). These laws include Federal Law No. 6 of 2004, Federal Law No. 7 of 2004 and Decision No. 12 of 1986. Despite the exemption from Labour Laws, the laws of the armed forces strictly outlaw any unauthorised private enterprise, and they include appropriate sanctions in place to deal with offenders (3), (4).

There is no evidence of the existence of any unauthorised private enterprises in the UAE. Research has revealed that Federal Law No. 6 of 2004, Federal Law No. 7 of 2004, and Decision No. 12 of 1986 strictly prohibit the armed forces from engaging in private enterprises (1). There is no evidence in the media of any unauthorised private enterprises. This could be due to the treatment of defence issues as confidential; however, there is no indication that unauthorised private enterprises occur, and there is relative transparency about the conduct of the private sector in the country. Senior officials within the defence sector are involved in businesses and enterprises; however, these are state-owned rather than privately owned, and the involvement is in terms of running the companies rather than owning them. For example, the Emirates Defence Industries Company (EDIC), which is a national leader in military industries, is owned by the Mubadala Development Company, whose chairman is H.H. Sheikh Mohammed bin Zayed bin Sultan Al-Nahyan, the Crown Prince of Abu Dhabi, and Deputy Supreme Commander of the UAE’s Armed Forces (3), (4), (5), (6).

According to one of the interviewees, the issue of unauthorised private enterprise is covered under administrative regulations and for both Service and civilian employees, this is catered for by corporate standards [1]. The MoD Corporate Standards Booklet suggests that private enterprise is not prohibited, however it is well regulated, with appropiate measures in place to avoid any conflicts of interest [2].

A review of media sources, the Parliament Defence Select Committee, Hansard, as well as an interview, indicate that there is no evidence of unauthorised private military enterprise by military or MoD employees [1, 2, 3].

The ‘Standards of Ethical Conduct for Employees of the Executive Branch’ prohibits outside employment that conflicts with official duties unless prior approval is given [1]. DoD employees are allowed to engage in outside employment or be self-employed as long as there is no interference with official duties. Financial disclosure reports have to be submitted [2]. These codes do not provide information on sanctions. The DoD’s ‘Encyclopedia of Ethical Failure’ outlines examples of sanctions imposed for undertaking unauthorised employment, however, there is no uniform response [3]. The encyclopaedia details sanctions for these activities, including enforced probation periods and fines.

Given the examples in the ‘Encyclopedia of Ethical Failure’, it would seem that unauthorised private enterprise is occasionally an issue for military and civilian defence personnel [1,2,3]. Outside of the encyclopedia, this cases might be recorded under DCIS investigations in the DoD OIG semiannual reports to Congress however, no such cases could be found in either of the 2020 reports [4,5]. The assessor has submitted an FOIA request for further information but, at the time of writing, no response has been received.

Venezuelan legislation does not outlaw private military companies, and in recent years the government has promoted their development.

The law does not set out prohibitions or limitations on the participation of military officers in private companies [1, 2]. Moreover, the objectives of the economic and social development plan – the Patria Plan – expressly indicate that it will seek to develop economic and military power by highlighting the importance of the civic-military union [3]. The defence sector’s Strategic Plan also includes the objective: “to develop a productive socialist economic system that will strengthen military businesses and units of the FANB [National Bolivarian Armed Forces]” [4]. As such, involvement of the military in the economic sector has been specifically promoted by the government, as has the creation of private military companies in both security services and other sectors.

Academics have highlighted that military control of the economic apparatus has markedly increased since Nicolás Maduro came to power, with the creation of various private military companies authorised by the executive [5]. This increase in the militarisation of the country’s economic system has been criticised: although there is no express prohibition against military participation in this kind of activity, some experts have pointed out that this contravenes the constitution since the security forces would be controlling sectors outside of their area of jurisdiction [6]. If regulations governing the conduct of public servants are considered, the Ethics Code establishes the duty of public servants to “firmly refuse to maintain relations or interests with persons or organisations that are incompatible with their positions and with the powers and functions assigned to them” [7]. While discussion does not focus on the existence of unauthorised private military companies, they are broadly criticised and considered illegitimate and unconstitutional.

The creation of private military companies in Venezuela has increased. However, available information indicates that evident that most are of a public nature and authorised by the government. Some security experts have collected unconfirmed reports of cases where the military may be offering private security services, but there is no information on privately incorporated and unauthorised companies [1].

Although legislation does not prohibit the creation of private military companies, academics and experts have questioned their legality. Many dispute whether military companies should be allowed to carry out tasks which are under the jurisdiction of the armed forces, according to the constitution and the Organic Law of the National Bolivarian Armed Forces (LOFANB) [2]. Moreover, the management of these companies can be considered irregular, as no information has been available about the finances and performance of these companies since 2016 [3].

There is no legal framework for the involvement of the military, police or intelligence services in private enterprise. Historically, the government conducts all its commercial enterprise through the Ministry of Trade, or most appropriately through the formation of State Parastatals. Evidence in the public domain is that the president is well aware of the military’s public ventures. In most cases, he hinted that he has some form of authority over their ventures [1]. While there is no law directly prohibiting commercial enterprises of the defence and security institutions, all funds generated by public entities, must in terms of the Public Finance Act, be submitted to the treasury into a consolidated revenue fund. There is no evidence that security sector owned private enterprises have at any point remitted such funds to the consolidated revenue fund managed by the treasury [2, 3, 4].

The government has never hidden the commercial activity of the military, even when there is no legal framework supporting such actions. The military owns several commercial entities, with interests mostly in mining. There has bever been an attempt to introduce legislation in Parliament to provide a legal basis for the operation of these entities or to provide oversight [1, 2].