Category Archives: Guest Commentary

Georgia at the Crossroads: The MEGOBARI Act As a Rule-of-Law Lifeline

Posted on by
Reply

GAB welcomes this post by Giorgi Meladze, Associate Professor at Ilia State University School of Law in Tbilisi and an invited lecturer at European Humanities University; Konstantine Chakhunashvili, PhD Associate Professor at Caucasus University; and Nadia Asaad, journalist and researcher working with the Center for Applied Nonviolent Action and Strategies and a graduate student at the Paris Institute of Political Studies (Sciences Po).

Once praised as a “Beacon of Democracy,” Georgia now faces mounting concerns over its slide towards authoritarian rule. Under the influence of oligarch Bidzina Ivanishvili, the country’s ruling elite is consolidating power through corrupt, authoritarian practices. While the United States and several European Union member states have already responded with sanctions targeting key decision-makers and their associates, Washington lawmakers are now debating legislation supported by both Republicans and Democrats to ratchet up the pressure.

The Mobilizing and Enhancing Georgia’s Options for Building Accountability, Resilience, and Independence (the MEGOBARI Act) would require the President to impose new sanctions on Georgian leaders and anyone “engaged in significant acts of corruption or acts of violence or intimidation in relation to the blocking of Euro-Atlantic integration in Georgia.” It is an essential element in defending democracy and the rule of law in Georgia. which in turn will help prevent organized crime networks operating through and in Georgia from fueling Russia’s war machine and undermining Euro-Atlantic integration.

After a decade of state capture, cosmetic “reforms”, and the consolidation of informal power networks, all documented by the Basel Institute, a sanctions regime codified by MEGOBARI Act and calibrated to the Georgian context is no longer optional: it is critical to prevent Georgia’s antidemocratic leanings from infecting its neighbors.

This post documents the Georgian state’s slide into a “cartel-state” and explains how MEGOBARI and other measures by U.S. and EU can arrest it.

Continue reading →

Balancing Enforcement and Anticorruption Messaging: Lessons from an Anti-Vote Buying Project in Moldova

Posted on by
1

GAB welcomes this timely and important Guest Post on vote buying by Corina Rebegea, Non-Resident Fellow at the Accountability Lab, and Katie Fox, Eurasia Deputy Regional Director at the National Democratic Institute (NDI).

A common concern in combating vote buying is the ineffectiveness of typical awareness campaigns (here). An NDI program in Moldova suggests a more successful strategy: combine robust law enforcement with tailored, empowering public messaging. Rather than relying on fear or blame, this approach centers on voter dignity and institutional integrity, offering valuable lessons for combating electoral corruption worldwide.

Although the evidence comes from a single country, the Moldovan experience offers several lessons to inform future efforts to prevent vote buying:

  • Negative messages tend to amplify distrust in elections, so the focus needs to shift from portraying elections as “stolen” to highlighting efforts to ensure their integrity.
  • Identifying trusted actors in society is essential for raising awareness of what constitutes electoral corruption and conveying deterrent messages. In Moldova, the police emerged as an increasingly trusted force, potentially due to their involvement in anti-vote buying investigations.
  • Messages that raise confidence and emphasize individual responsibility resonate better than those that blame or threaten citizens. Awareness-raising about the legal consequences will be well-received, but only among certain demographics, so an in-depth understanding of the different audiences is essential.
Continue reading →

Mexico’s Supreme Court Defines Compliance and Sets Corporate Standards

Posted on by
Reply

GAB is pleased to publish this Guest Post by Carlos G. Guerrero-Orozco, a Mexican litigation attorney and partner at the law firm López Melih y Estrada in Mexico City.

Last month, the Mexican Supreme Court issued a landmark decision addressing corporate compliance programs in the context of a civil suit for damages. The decision brings Mexico closer to international practices, particularly those of the United States, where compliance frameworks have long been enforceable standards rather than aspirational corporate policies.

Case 11/2025 (here) decided by the Supreme Court, represents a milestone for compliance in Mexico’s private sector. It is the first time the Supreme Court has analyzed corporate conduct, defined compliance, and set corporate parameters for its enforcement.

What stands out in this case is the creativity of the underlying lawsuit. It marks the first time a third party has sought to enforce a company’s Code of Conduct and compliance program to claim civil liability.

Continue reading →

Undermining Ukraine’s Anticorruption Agency and Special Corruption Prosecutor: What It Means for Whistleblowers

Posted on by
Reply

Tuesday’s approval of a law curing the independence of Ukraine’s anticorruption agency and the special prosecutor for corruption has sparked a furious backlash from citizens, NGOs, and Ukraine’s international partners. In today’s Guest Post Oksana Nesterenko, the Executive Director of the Anti-Corruption Research and Educational Center of the National University of Kyiv-Mohyla Academy, and Andrii Biletskyi, Senior Policy Analyst at the Center, explain its impact on a critical element in the fight against corruption: Ukrainians’ willingness to blow the whistle on corrupt officials and their private sector accomplices.

The big, disappointing story in Ukraine this week was the fast-tracked passage of legislation curbing the independence of NABU, the anticorruption agency, and SAPO, the special prosecutor for corruption.

Passage of what is now Law No. 4555-IX dealt a serious blow to the independence of the two agencies responsible for tackling high-level corruption. It gives the Prosecutor General sweeping powers to control both of them: authority to issue binding written instructions to either, order inspections into specific pre-trial investigations, reassign NABU-led cases to other law enforcement bodies (including the internal security service Sluzhba Bezpeky Ukrayiny), close cases at the request of the defense, and unilaterally appoint members of prosecutorial teams.

The law triggered protests across Ukraine, with people taking to the streets nationwide to voice their opposition. Western partners — including the European Union and the Organization for Economic Cooperation and Development (OECD) — have already expressed serious concerns, casting doubt on Ukraine’s future steps toward European integration and its ability to attract needed investment.

In response to this backlash — which the Ukrainian authorities clearly did not expect, President Zelensky has submitted Bill No. 13533 to the Ukrainian Parliament aimed at restoring the independence of anti-corruption institutions (here). Some Members of Parliament have also registered an alternative bill (here). However, it’s still too early to proclaim that NABU and SAPO are out of the woods.

While we wait for the air to clear, and we hope for repeal of the law, let’s talk now about what it means for whistleblowers so long as it remains in force.

Continue reading →

Guest Post: The Forgotten History of Anti-Money Laundering Law: Where Did It Go Wrong?

Posted on by
Reply

Anton Moiseienko, Senior Lecturer and Research Director at the Australian National University Law School, introduces GAB readers to his new book on AML with the following observation —

The contemporary anti-money laundering (AML) regime effectively prevents criminal infiltration of the economy and delivers value for money. Said no one, ever.

Critiques of AML efforts abound among practitioners, policymakers and scholars alike. This near-universal lack of confidence in today’s financial crime rules is the starting point of my new book Doing Business with Criminals: Between Exclusion and Surveillance, which explores the objectives, unintended consequences, and history of the global AML regime.

The sheer degree of discontent with the existing framework begs the question of what went wrong. There has been no shortage of literature seeking to provide an explanation or proffer a solution. Seminal works include Peter Alldridge’s What Went Wrong with Money Laundering Law?(2016) and Nicholas Gilmour and Tristram Hicks’s The War on Dirty Money (2023). A valuable recent contribution is the article ‘How Well Does the Money Laundering Control System Work?’ by Mirko Nazzari and Peter Reuter, published in Crime and Justice and reviewed by Rick Messick on this blog.

These books and articles make varied and useful contributions, as do many other studies. Still, several further avenues need to be pursued to advance the debate on how to address the problem. They include revisiting the history of AML to understand why today’s widely criticised regime has evolved in the way it has – and, crucially, how that history has defined its current objectives.

Continue reading →

Why The FATF-Based Anti-Money Laundering System Fails to Catch the Proceeds of Corruption

Posted on by
4

Today’s Guest Post is by Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, University of Sussex (UK) and formerly the Chair of Transparency International’s International Council.

In recent years, anticorruption campaigners and policymakers have directed increased effort towards improving the global Anti-Money Laundering (AML) system.

Imagine this system were operating perfectly. Would it stop kleptocracy?

Of course not, no more than AML systems stop heroin production. AML laws and regulation are not designed to stop the acts that generate dirty funds; they are designed to stop the proceeds of crime from being disguised (laundered) and thus freely circulating around the world.

The more difficult question involves monies kleptocrats steal: if the global AML system were operating perfectly, would it stop these funds – the proceeds of corruption – from circulating around the world?

Two recent reports in the UK — from the Taskforce on Business Ethics and the Legal Profession and Spotlight on Corruption — answer the question with a resounding NO: when the proceeds of corruption derive from kleptocracy, when crooks have captured the state, the UK’s AML system is not capable of addressing these funds.  To be clear, even if the current global AML system were operating perfectly, the UK would be unable to deal with the proceeds of corruption arising from state capture.

To date the research is confined to the UK context and UK law; it has yet to extend to other jurisdictions. But given what is known about the globalised nature of illicit financial flows, we might conclude that other jurisdictions are no better at this than the UK.

Continue reading →

Guest Post: Global Lessons from Sri Lankan Civil Society for Post-Crisis Governance Reform

Posted on by
Reply

Today’s guest post is from Nishan de Mel and Inoshini Perera of Verite Research and Nikhil Wilmink of the Open Society Foundations.

In 2022, Sri Lanka experienced the most severe economic crisis of its post-independence history. Foreign reserves were emptied as the currency depreciated by over 80% and essential imports such as fuel and medicine were curtailed. Sri Lanka was forced to default on its external debt of over USD 40 billion. In desperation, the government went to the International Monetary Fund (IMF) for assistance—the seventeenth time Sri Lanka has done so since 1965. The IMF’s rescue program, which prioritized price stabilization above all else, inflicted substantial hardship, as interest rates spiked, poverty doubled to around 30%, and the previous eight years of GDP growth were wiped out.

The crisis triggered an awakening among the Sri Lankan people about the consequences of corrupt governance. Protests proliferated and grew into an avalanche known as the Aragalaya (mass uprising), the largest democratic protest in Sri Lanka’s history. Protestors viewed Sri Lanka’s economic collapse as rooted in corruption, impunity, and the abuse of political power. The protests ultimately forced then-President Gotabaya Rajapaksa to resign and flee the country.

Given that concerns about corruption and misgovernance were so central to the discussion of Sri Lanka’s economic crisis, in early 2023 the IMF reached an agreement with the Sri Lankan government to conduct a “Governance Diagnostic Assessment” (GDA) – the first one in Asia. Civil society in Sri Lanka was not overly impressed, however. Sri Lankan civil society organizations (CSOs) were concerned that IMF consultations with civil society would be largely performative. CSOs were also concerned that there would not be sufficient accountability for implementation of the anticorruption measures that the IMF designed with the government. Leading think tanks and CSOs in Sri Lanka came together to form the Civil Society Initiative on Anti-Corruption Reform for Economic Recovery (CSI-group). The CSI-group initially requested that the IMF transcribe and publish its consultations with CSOs, but the IMF would not agree to this. Therefore, the CSI-group took an independent path by bringing hundreds of other CSOs together into a process for producing a “Civil Society Governance Diagnostic Report”. This was the first time any country’s civil society sector had ever drafted a governance report to guide the IMF’s GDA. That GDA, produced after the civil society diagnostic, was an excellent document that aligned closely with what had been produced by the CSOs. Sri Lankan CSOs also created of an independent IMF Tracker to monitor the government’s implementation of its IMF program commitments and to provide more transparency about the significant failures to comply with commitments on governance and anticorruption, even when these were not highlighted in the IMF’s reviews.

Recognizing the core governance weaknesses needed a multi-pronged approach. The Sri Lankan think tank Verité Research decided to involve bondholders as well. In June 2024, Verité Research proposed a new debt instrument: a “Governance-Linked Bond” (GLB), designed to reduce reducing the risk of repeated defaults in countries with poor governance. Through the GLB, creditors agree to reduce the borrowing country’s coupon payments if that country takes certain governance-improving actions—actions that benefit the creditors as well by reducing the risk of default. Thus, GLBs make the adoption of these governance improvements a win-win for both debtor countries and creditors. The GLB proposal was adopted by private creditors in Sri Lanka’s debt restructuring in December 2024. The final GLB issue made up about 13.5% of Sri Lanka’s new restructured debt (USD 1.44 billion) with a coupon reduction of 75 basis points, from 2028-2035 if three key performance indicators (KPIs) are met: (1) a target revenue-to-GDP ratio; (2) the publication of a fiscal strategy that complies with the new public finance management act that Sri Lanka adopted in August 2024; and (3) compliance with the information disclosure covenant in the restructured bond contracts. Notably, these KPIs were drawn from a set of sensible set of compliance actions related to the existing laws of the country, its macroeconomic targets, and stipulations on the bond contract; there was no need to link them to the IMF’s GDA.

In sum, CSOs’ engagement in Sri Lanka resulted in a number of meaningful improvements, including the IMF’s adoption of a much-improved GDA and the innovation of the GLB, a new global instrument to improve governance. With Kenya now undertaking a similar process, some key lessons from Sri Lanka include: being able to take advantage of windows of opportunity and momentum swings (such as the momentum from popular protests around corruption and the IMF program in Sri Lanka); and building diverse coalitions able to take a systemic approach (Sri Lanka’s significant achievements have come from partnerships with unusual partners including bondholders).

Guest Post: What Trump’s FCPA Enforcement Pause Means for Accountability in Europe

Posted on by
Reply

Today’s guest post is by the Daphne Caruana Galizia Foundation. Established following the assassination of Maltese anticorruption journalist Daphne Caruana Galizia, the foundation seeks to ensure full justice for Daphne’s murder, advance her work, support and protect investigative journalists, and promote public interest litigation. It coordinates the Coalition Against SLAPPs in Europe (CASE), administers the Public Interest Legal Network (PILN), is a Transparency International chapter-in-formation, a partner of OCCRP, and a member of the UNCAC Coalition.

Here on the little Mediterranean island of Malta, located just south of Sicily, news of a Department of Justice investigation into Texas-based Steward Healthcare was met with a collective sigh of relief – “the Americans will help to get it done” – some thought to themselves. “It” in this case refers to the act of achieving accountability for one of the biggest corruption scandals to rock the country.

The scandal centers around Steward’s takeover of a fraudulent concession to develop and manage three of Malta’s public hospitals. The hospitals were left in a state of disrepair and under-resourced, as public funds intended for their development and upkeep by-passed them almost completely, landing instead inside the pockets of a well-positioned few through a carefully organized international network of consultancy agreements and intermediaries. In Malta, these few allegedly included Maltese former Prime Minister Joseph Muscat, Minister Konrad Mizzi, and Chief of Staff Keith Schembri. In the US, Steward executives allegedly     did their best to collect all they could of the money hemorrhaging from the concession.

So what did Maltese citizens hope the result of the Department’s FCPA investigation would be?

Continue reading →

Guest Post: Getting into the Weeds of Victim Compensation in Foreign Bribery Cases

Posted on by
Reply

Today’s guest post is from Sam Hickey, a lawyer and former regular GAB contributor:

Given the Trump Administration’s decision to pause FCPA enforcement and disband the DOJ’s Money Laundering and Asset Recovery Section, the United Kingdom has become an even more important actor in international efforts to remediate those most impacted by foreign bribery, and the global fight against corruption more generally.

Together with the Basel Institute on Governance, I have written a report on the UK’s use of Deferred Prosecution Agreements (DPAs) to compensate the victims of foreign bribery. Given the inherent difficulties in seizing, forfeiting, and repatriating illicit wealth through traditional asset recovery frameworks, DPAs possess immense potential to remediate the victims of corruption in low-income countries. But this practice also raises a number of questions and challenges, which the report seeks to address. Here are some of the more serious ones: Continue reading →

Guest Post: State of Corruption in Mongolia and Government’s Plans to Address It

Posted on by
1

The fight against corruption in Mongolia, a fledgling democracy wedged between Russia and China, is especially challenging. Not only must corruption fighters in government and allies in civil society contend with constant meddling in its internal politics by its powerful neighbors, but its vast resources of copper, coal, and other minerals create enormous incentives for home-grown corruption. GAB is pleased to publish this guest post on the current developments in the fight against corruption fight by Mongolian lawyer Battsengel Bayarbaatar, an expert in intellectual property law and long-time good governance, anticorruption advocate and due diligence expert.

Mongolia is currently grappling with significant corruption issues, a central concern for both the public and the government. The situation has intensified due to several high-profile corruption scandals, particularly within the mining sector, a cornerstone of Mongolia’s economy.

One of the most prominent cases is the so-called “coal theft” scandal, which erupted in late 2022. This scandal involves allegations that large quantities of coal were illegally transported to China, leading to an estimated loss of up to $12 billion for the Mongolian economy (here). High-ranking officials and influential business figures were implicated in this scheme, triggering widespread public outrage and protests. The Mongolian government responded by launching several criminal investigations and reforming laws related to strategic minerals. However, despite these efforts, enforcement remains weak, and the institutional coordination necessary to address these issues effectively is lacking.

The public’s dissatisfaction with how corruption is being handled reached a boiling point in December 2023 when massive protests broke out in Ulaanbaatar’s Sukhbaatar Square. These protests were primarily driven by youth and various civil society groups demanding transparency and accountability from the government, particularly concerning the coal theft case. The protests are reflective of broader frustrations within Mongolian society over issues such as inequality, unemployment, and environmental degradation. The government has responded to some demands, such as declassifying information related to state-owned enterprises like Erdenes Tavan Tolgoi, but many in the public remain skeptical of the government’s commitment to genuine reform.

In response to these challenges, the Mongolian government has introduced a new anti-corruption strategy, which aims to tackle corruption comprehensively by 2030.

Continue reading →