Corruption Sanctions: What Do Governments Need to Know?

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GAB welcomes back Guest Blogger Anton Moiseienko, Associate Professor of Law at the Australian National University. Professor Moiseienko specializes in financial crime and economic sanctions, with particular expertise in global anti-money laundering and counter-terrorist financing (AML/CTF) regulation. He is the author of the 2025 volume Doing Business with Criminals considered an indispensable guide to the global AML/CTF system.

How to harness the promise of corruption sanctions while minimizing their unintended consequences is the issue at the heart of a recent report I wrote for the Basel Institute on Governance, a leading Swiss anti-corruption research center, entitled “Corruption Sanctions: What Governments Need to Know.” In this post, I will offer brief reflections based on its analysis.

The Evolution of Corruption Sanctions

It is useful to start by canvassing the history of corruption sanctions. Targeted sanctions are financial and travel restrictions imposed by governments against individuals or companies outside any judicial process. They emerged in the 1990s as a prominent response to various forms of alleged wrongdoing, including terrorist financing, nuclear proliferation and drug trafficking.

Prior to that, sanctions tended to take the form of comprehensive economic measures against entire countries, such as travel embargoes. By contrast, targeted sanctions enable governments to surgically focus on individuals and companies deemed to be involved in a particular form of malfeasance. Some targeted sanctions programs target affiliates of a rogue government – say Russia, North Korea or Iran – whereas others are “thematic” and therefore address a certain type of wrongdoing regardless of where it takes place in the world.

Corruption sanctions are a form of thematic sanctions. Their evolution began in the U.S. in the early 2000s. In 2004, President George W. Bush signed into law Proclamation 7750 that authorized confidential visa sanctions against corrupt foreign officials and their family members. From 2008 onwards, this sanctions program has been augmented by the sanctions provisions under section 7031(c) of the annual Consolidated Appropriations Acts, which provide for public visa bans. Finally, Congress adopted the Magnitsky Act in 2012 and the Global Magnitsky Act in 2016. Both grant the President the authority to impose financial and travel sanctions against those suspected of corruption and human rights abuse.

Other jurisdictions soon followed suit, including Canada, the UK, and Australia – but, curiously enough, not the EU. The EU legislated to introduce a human rights sanctions regime, but it stopped short of enacting a corruption sanctions program, despite the pledge to do so by the European Commission’s president Ursula von der Leyen. While one might be tempted to criticize the EU’s reticence, the real question is: why should governments consider introducing corruption sanctions, and how can they use them effectively?

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Measure Corrupt Conduct — Not Corruption

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The new Handbook of Research Methods for Corruption Studies, edited by corruption guru extraordinaire Michael Johnston, offers a wealth of learning about how to fight corruption. None more important than Alina Mungiu-Pippidi’s chapter analyzing the fundamental question in the fight: how do we know if we are winning?

Decades after corruption control rose to the top of the global agenda, assaying how well the fight is going ought to be straightforward. That’s not so as the continuing debate about the validity of TI’s Corruption Perceptions Index, the World Bank’s Control of Corruption measure, and the many other measurement tools on offer shows.

The problem, as Professor Johnston acknowledges in the Handbook’s introduction, is foundational.

“After 40 years of debate about corruption, we are still uncertain about what we are talking about. . . cannot measure it directly. [and don’t know if] a single [corruption] score about a whole country really tells us much.”

What Professor Mungiu-Pippidi shows in her chapter is that the foundational problem is behind our inability to measure progress in fighting corruption. That efforts to gauge success have foundered on misguided attempts to propound a universal, all-encompassing definition of corruption which have produced nothing more than vague, imprecise measures riddled with practical and methodological errors. She explains why these should be scrapped and offers in their stead a series of direct, fact-based indicators for evaluating progress tied to a specific, bounded definition.

Professor Mungiu-Pippidi’s chapter deserves the closest attention by policymakers, evaluators, and citizens who want to know if an anticorruption law, policy, or strategy is making a difference. This post builds on and complements her work in two ways.

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Is it Too Late to Corral America’s Wealthy? Casey Michel’s United States of Oligarchy

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The discovery that Anthropic and OpenAI were able to freely roam cyberspace after escaping their sandbox triggered global alarm bells. If AI programs can break out of the electronic guardrails that prevent their running amok, there is no telling what havoc they might wreak.

Casey Michel, Director of the Combating Kleptocracy Program at the Human Rights Foundation, writes about escapees from a different sandbox in the United States of Oligarchy. The escapees: members of America’s billionaire class. The sandbox: the ethics codes, social norms, and laws that constrain the conduct of America’s wealthiest.

Michel recounts the harm Elon Musk, Peter Thiel, and fellow billionaires have already done while operating free of these constraints. He describes the far greater damage likely if those constraints are not soon reimposed and urges reforms to ensure the ultra-rich can never again break out.

Today’s billionaires are not the first to have slipped the sandbox’s guardrails. United States of Oligarchy reminds that the same techniques that fueled the rise of Carnegie, Rockefeller, Stanford and other nineteenth-century “robber barons” – bribes, shell companies, large campaign contributions – have helped today’s counterparts realize unimaginable levels of wealth. But there are profound, startling differences between the two. The first generation of robber barons never made common cause with autocratic regimes; their activities never compromised the nation’s security, and they never rejected the democratic ideal.

That’s the indictment Michel lodges against the current generation, plain by his subtitle: How America’s Wealthiest Ally with Dictators, Weaken the U.S., and Destroy Democracy.

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The French Anticorruption Strategy, Falling Short of Expectations

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GAB welcomes this Guest Post by Sophie Lemaître, a French lawyer, anticorruption advocate, and creator of the first French-language podcast on corruption & tax evasion. Her 2025 book, Réduire au silence, documenting efforts around the world to intimidate journalists and human rights defenders, was awarded the Renaud Van Ruymbeke Prize, which recognizes works dedicated to the fight against corruption.

In November last year, the French anti-corruption Agency (Agence française anticorruption – AFA) finally published France’s Multi-Year National Plan to Fight Corruption for 2025-2029. The French anti-corruption community had long waited for it: the country had not had any anti-corruption strategy since 2022.

The 2025-2029 national plan is the second of its kind. It is 52 pages long in French (48 pages in English) organized around 4 pillars:

  1. Bolstering the fight against bribery and corruption in central government departments
  2. Helping local authorities to fight corruption
  3. Protecting economic stakeholders against corruption
  4. Combating corruption at international level

Priorities I and IV are further divided by objectives, and all four list specific measures to be taken, a total of 36 that include targeting central government, government departments, local authorities, the private sector, and France’s international actions.

The strategy reflects some of the challenges France is facing. It puts strong emphasis on the links between corruption, organized crime, and drug trafficking, the latter the focus of the central government. The plan also includes measures that have been requested for years, the creation of an interministerial committee to prevent and fight corruption, the authorization for the National Commission for Control of Electoral Accounts and Political Finance (CNCCFP) to receive financial intelligence from Tracfin, the French Financial Intelligence Unit, and the appointment of an anticorruption coordinator reporting to the general secretary in each ministry.

The strategy sets a clear direction and, at first glance, appears fit for purpose. However, it suffers from several shortcomings. Transparency International France has even published an alternative strategy with 19 measures to rise to the challenge.

Five weaknesses I have identified:

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When the Victim Is a Gatekeeper: What Korea’s Cartoon-Money Embezzlement Exposed

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GAB welcomes this Guest Post by Marta Liduma, a corporate lawyer specializing in cross-border payment processing agreements. She is presently an LLB candidate at the University of Groningen and is writing in her personal capacity.

This January, a branch manager at a Saemaul Geumgo community credit cooperative in Gyeongju, South Korea, took about 70 million won (roughly US$50,000) from the branch vault. He covered the gap with play money: cartoon 50,000-won notes printed with ducks and bears, ordered online. The branch had two employees. He handled the vault himself, and he bet that nobody would open the bundles. A colleague eventually grew suspicious and reported him up the chain.

Photographs of the toy notes went around the world, and the coverage settled into the shape of an odd-news item: clumsy thief, silly props, tidy ending. The tidy ending deserves more scrutiny than the theft. For it shows a serious gap in the Republic of Korea’s anticorruption laws, one that other nations may share.

When the cooperative’s internal investigation confirmed what had happened, it dismissed the manager, recovered the money, and stopped there. The South Korean broadcaster SBS reported that the institution did not refer the matter to investigative authorities, and what it told its own federation, if anything, is not public; the police became involved only because the manager turned himself in about two weeks later, and he has since received a summary indictment, meaning the prosecution asked the court to impose a fine on the papers rather than send him to trial. Asked about the case months afterward, a cooperative official said it was closed, the employee’s dismissal and full repayment having settled the matter.

For most theft victims, that position is unobjectionable. Korean law, like the law of most nations, imposes no general duty to report a crime one has suffered, and a shopkeeper who quietly takes restitution from a light-fingered employee wrongs no one. A deposit-taking institution is a different kind of victim, because it is also a gatekeeper: an entity the law charges with guarding a system that extends beyond its own interests. Its losses are never only its own. An insider theft affects the members who own the cooperative, the depositors who trust it, the supervisor whose picture of the sector depends on accurate incident data, and the deterrent effect that evaporates once staff learn that looting the vault can be settled for the price of returning the money. An institution that stays silent to protect its reputation is deciding a question of public interest in its own favor. Reporting duties exist to take that decision away from it, and the serious ones contain no restitution exception.

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Review of Robert Barrington’s Corrupted Kingdom

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Corruption now threatens one of the oldest and most established democratic nations. In a 2024 poll, two-thirds of Britons said politics is becoming more corrupt (here), and in 2025 nearly 9 in 10 expressed concerns about potential corruption among politicians (here). Over the past year 16% reported being asked for a bribe, and 11% were asked to facilitate money laundering (here).

U.K. anticorruption fighters are taking heed. None more than Robert Barrington. In Corrupted Kingdom, out July 16 (preorder here), the former Transparency International U.K. head and Chair of T.I. International’s Council chronicles the ways corruption has begun to infect venerable U.K. institutions: from the Monarchy, where the now deflowered Prince Andrew’s flacked for a Kazakh oligarch in return for £ 3 million to Parliament, where MPs are secretly paid to question Ministers and seats in the House of Lords are on offer for hefty campaign contributions, to Scotland Yard, local governments, businesses small and large.

It is even seeping into the academy. Currently Professor of Anti-Corruption Practice at Sussex University’s Centre for the Study of Corruption, Barrington argues that the growing willingness of universities to accept dark money compromises their independence and their integrity.

British and non-British readers will both find much to recommend in the pages of Corrupted Kingdom.

British readers are likely to be most interested in the reforms Barrington advances, from beefing up “dull sounding” but important accountability institutions such as the Auditor General for Wales and the Northern Ireland Audit Office to teasing out whether the U.K. should create a formal, institutional structure, even an independent anticorruption agency, to replace the current arrangement, a patronage position in the PM’s office whose occupant has no official status and whose advice is easily, and often, ignored.

Citizens of other liberal democracies will find (reassuringly or depressingly) that theirs is not the only country where abuses stemming from large donations to political parties orchestrated by lobbyists is a front-page problem. Americans may take some solace from learning that Boris Johnson’s short-lived reign as PM approached Trumpian-levels of corruption.

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July 2 Webinar: MEASURING CORRUPTION TO TRIGGER ACTION AND TRACK PROGRESS

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UNODC and three member states (United Kingdom, Dominican Republic and Madagascar) will highlight the UNODC Statistical framework to measure corruption as a practical tool for countries to develop national information systems able to detect the presence, measure the magnitude and monitor trends involving different forms of corruption.

Details and registration link here.

Call centers, cash, and power: Georgia’s hidden political economy — Revised

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Yesterday’s post incorrectly identified a source of information on the Georgia call center scam and its relationship with current members of the government. It also failed to note it was authored by Giorgi Meladze, Associate Professor, Ilia State University School of Law, Visiting Scholar at Freie Universität Berlin.

Georgia’s recent corruption scandals are often described as an internal purge within Georgian Dream. That may be partly true. Former Prime Minister Irakli Garibashvili has been sentenced to five years in prison after pleading guilty to large-scale money laundering, following investigations in which officials said they seized more than USD 7 million in cash and valuables from properties linked to former officials. Former State Security Service chief Grigol Liluashvili has also been arrested on bribery charges, including allegations linked to the protection of scam call centers. These cases are real legal developments. But treating them only as corruption prosecutions may miss the larger political story.

In an interview, Givi Targamadze, former MP who chaired the Defense and Security Committee Chairman, offers a different reading. He explains that these arrests and reshuffles should not be seen as a genuine anti-corruption campaign but as symptoms of a deeper struggle over control of illicit finance, security institutions, and political loyalty. According to him, the current turbulence inside Georgian Dream reflects an attempt to reorganize the relationship between state power, criminal networks, and cash-generating schemes, especially Georgia’s now notorious scam call-center industry.

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Call centers, cash, and power: Georgia’s hidden political economy

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GAB welcomes this Guest Post by Giorgi Meladze, Associate Professor, Ilia State University School of Law, Visiting Scholar at Freie Universität Berlin.

Georgia’s recent corruption scandals are often described as an internal purge within Georgian Dream. That may be partly true. Former Prime Minister Irakli Garibashvili has been sentenced to five years in prison after pleading guilty to large-scale money laundering, following investigations in which officials said they seized more than USD 7 million in cash and valuables from properties linked to former officials. Former State Security Service chief Grigol Liluashvili has also been arrested on bribery charges, including allegations linked to the protection of scam call centers. These cases are real legal developments. But treating them only as corruption prosecutions may miss the larger political story.

In an interview, Givi Targamadze, former MP and now Director of the Media Center at the Georgian Strategic Analysis Centre, offers a different reading. He explains that these arrests and reshuffles should not be seen as a genuine anti-corruption campaign but as symptoms of a deeper struggle over control of illicit finance, security institutions, and political loyalty. According to him, the current turbulence inside Georgian Dream reflects an attempt to reorganize the relationship between state power, criminal networks, and cash-generating schemes, especially Georgia’s now notorious scam call-center industry.

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The Word Is Not Enough: Testing the Effects of Information Treatments on Perceived Corruption in Ukraine

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GAB is pleased to reprint the article below from Vox Ukraine Idea, an independent analytical platform dedicated to helping Ukraine move into the future. Authors Professor Yuriy Gorodnichenko of the University of California, Berkeley, and Ilona Sologoub, Vox Ukraine’s Scientific Editor, have taken a major step forward in explaining how policymakers can manage the vexed and misunderstood issue of corruption perception measures.

In March 2026, Ukrainians reported that corruption was the second most important problem after the war. 12% of people even put it in the first place. Between  70% and 90% of Ukrainians believe that corruption is a serious problem. At the same time, the incidence of corruption was much lower: in 2025, between 5% (in administrative services) and 32% (in the construction sector) of people found themselves in situations where a bribe was necessary to address their issues. This divergence between perceived and experienced corruption has been persistent: the gap has reached 60-70 percentage points at least since the early 2000s, when the data became available. 

This situation is not unique to Ukraine. In many countries, perceived corruption differs from experienced corruption. Furthermore, when objective measures of corruption are available (Sarullo et al. 2026), they are only weakly correlated with perceptions. One explanation is that surveys measure only petty corruption, whereas perceptions of grand corruption are shaped by the media. Consistent with this explanation, freedom of speech is related to perceived corruption (Gutmann et al. 2020, Costa 2013). This can lead to the integrity paradox: more information about officials prosecuted for corruption can increase popular beliefs about the extent of corruption in a country. 

How can one then defeat the corruption narrative?

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