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?

Flexibility and Versatility

The two defining features of corruption sanctions are their flexibility and versatility.

The flexibility of corruption sanctions is a product of comparatively relaxed evidentiary standards. They tend to be couched in terms such as “reasonable grounds to suspect” (UK corruption sanctions) or “credible evidence” (U.S. Global Magnitsky Act). This flexibility enables the use of corruption sanctions in circumstances where traditional law enforcement options remain unavailable, especially against foreign kleptocrats who enjoy impunity in their home jurisdictions. It also enables governments to act swiftly in response to developing situations, such as instances of regime change.

Related to the flexibility of corruption sanctions is their versatility. They can be used to pursue multiple different objectives. Sanctions are often viewed as a means of pressuring the targeted persons into ceasing their wrongdoing, but their objectives are not limited to behavior change alone. They can be put to many different uses. Some are aimed at the perpetrators themselves, such as disrupting corrupt activity, deterring would-be corruption, or punishing wrongdoers. Others serve broader ends, such as condemning corruption, facilitating asset recovery, or signaling support for another country’s law enforcement action.

This unique combination of flexibility and versatility makes for a compelling argument in favor of corruption sanctions. Governments should ask themselves whether they have the tools at their disposal to achieve most of the objectives listed above with sufficient speed and agility. In some cases, they may have alternative legal structures in place to do so, such as Switzerland’s Foreign Illicit Assets Act, which enables the Swiss government to swiftly freeze the assets of suspected kleptocrats. In other cases, corruption sanctions may be the best option, especially for countries that already have a legal framework in place for enacting autonomous (non-UN-mandated) sanctions.

Selectivity and Transparency

Flexibility and versatility come at a cost. The main one  is  selectivity. Governments can only sanction a relatively small, select group of alleged perpetrators. For instance, as of this writing, the U.S. Specially Designated Nationals list features 257 individuals and 326 entities sanctioned under the Global Magnitsky Act. How were these individuals chosen?

Today, the decision-making is shrouded in mystery. This is true not only of the imposition of sanctions, but also – and even more so – of the lifting of sanctions (de-listing) and the granting of temporary sanctions waivers (licenses). The Trump administration’s pattern of unexplained de-listings of Global Magnitsky designees has caused alarm among civil society groups undermining the credibility of their use. In recognition of these well-founded concerns, the Basel Institute report recommends that governments:

[P]ublish clear criteria for the imposition of corruption sanctions and the granting of corruption sanctions licences, and . . .  the rationale for any such decisions. They should also publicly explain, in appropriate level of detail, any corruption sanctions delistings.

As the recommendation acknowledges, the issues of consistency and transparency are intimately linked to  due process. Across most jurisdictions and sanctions programs, designations are notoriously difficult to challenge in court because of the broad discretion vested in governments. This creates inherent risks of error and abuse, but these risks can be minimized – and rendered more palatable in the eyes of the public – if sanctions are overwhelmingly used in a disciplined and transparent fashion. Conversely, abuse of sanctions, such as US sanctions against International Criminal Court judges, jeopardizes the entire edifice of autonomous sanctions, including corruption sanctions.

Conclusion

The Basel Institute report’s objective was to summarize the current state of knowledge about corruption sanctions. It makes nine recommendations dealing with various facets of the flexibility, versatility and selectivity of such sanctions. These features render them a potent weapon against corruption, but they also create room for abuse.

For time-poor readers, the paper’s findings and recommendations are brought together in a related Quick Guide on the Basel Institute’s website. Their aim is to help governments think through the need for corruption sanctions; their use; interaction with civil society organizations; and the trade-offs they entail. I hope that GAB readers will find the report and the accompanying Quick Guide of use, and any feedback or critique is of course welcome.