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2021 Corruption and Economic Crime - Final
2021 Corruption and Economic Crime - Final
2021 Corruption and Economic Crime - Final
Historically, corruption has been seen as an enabler of some types of economic crime and organised
criminality, for example through payment of bribes to law enforcement agencies or undue influence in
decision-making. However, modern forms of corruption – which the paper interprets as usually
transnational in nature – are even more intertwined with economic crime. Both sets of crimes share
similar drivers, rely on similar mechanisms to move and launder illicit funds, and deprive societies of
much needed financial resources, threatening not only economic and social stability of other countries
across the globe, but also the rule of law and democracy.
Due to these common characteristics, certain instruments to combat corruption and economic crime
could be productively brought into closer alignment. For instance, a public register on beneficial
ownership may prevent the use of shell companies to launder proceeds from both corruption and
economic crime. Moreover, international cooperation is required in the investigation and prosecution of
both corruption and economic crime schemes, as well as for asset recovery purposes. Transparency in
political funding may also ensure that political and electoral campaigns are not tainted by proceeds of
corruption and economic crime, and could help prevent capture of state institutions.
This document should not be considered as representative of the Commission or Transparency International’s
official position. Neither the European Commission,Transparency International nor any person acting on
behalf of the Commission is responsible for the use which might be made of the following information.
The Anti-Corruption Helpdesk is operated by Transparency International and funded by the European Union.
Query
Please provide an overview of the common characteristics between corruption and
economic crime. In your overview, please include a discussion on what is meant by
“modern forms of corruption”
Main points
Contents
— This paper interprets “modern forms of
1. Introduction
2. Common characteristics between corruption” as transnational in nature, and
corruption and economic crime potentially involving the use of technology
3. Conclusion to illicitly acquire, move and dispose of
4. References
assets.
Introduction — It is common for criminals engaged in
Corruption sometimes is mistaken as a synonym corruption and economic crime to abuse
of economic crime, despite the distinction between shell companies as conduits for their illicit
the two sets of crimes. On one hand, corruption is
activities. There is currently a petition with
widely defined as the abuse of entrusted power1 or
more than 700 signatories calling for a
public office2 for private gain.
global standard on public beneficial
Economic crime, on the other hand, is defined as ownership.
any “illegal act committed by an individual or a
group of individuals to obtain a financial or — Evidence shows that international schemes
professional advantage” (Europol no date). It has increasingly involve networks of
been defined by some scholars as “fraud in its professional individuals and entities who
various manifestations”3, as well as including
enable both corruption and economic
money laundering, bribery and corruption
crime.
(Grabosky (1998: 44-48). Likewise, Kolham and
Mezei (2015: 36-39) list typical forms of economic
— Dirty money from corruption and economic
crime as including capital investment frauds,
misleading consumers, fraudulent bankruptcy, tax
crime often finds its way into politics.
evasion, credit and insurance fraud, credit card Hence, ensuring transparency in political
funding could prevent criminals exercising
influence over politics.
1 3
See https://www.transparency.org/en/what-is-corruption These include insurance fraud, credit fraud, fraud against
2See employers or shareholders or government or clients,
https://www.worldbank.org/en/news/factsheet/2020/02/19/a telemarketing fraud, credit fraud, forgery and theft of
nticorruption-fact-sheet intellectual property. See Grabosky (1998: 44-48).
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Threat to security, democracy and Overall, both corruption and economic crime pose
rule of law offer a breeding ground for a multitude of threats to
stability, rule of law and democracy. Measures to
The combination of corruption and economic crime
minimise such threats depend on detecting,
can stymie regulatory and governance systems.
investigating and prosecuting both sets of crimes
Weak governance allows criminals to infiltrate
at both domestic and international level (Jenkins
state institutions and co-opt security personnel and
2016).
establishments (Transparency International
Defence & Security 2016: 14). This poses a threat
to state security, as officials become complicit or
active participants in corruption and criminal
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6Commitments on international cooperation include Transnational Organised Crime (see articles 13, 18, 19,and
Chapter IV of the United Nations Convention against 27).
Corruption, The United Nations Convention against
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