A major new study to identify kleptocracy’s “red flags” will help create better rules and regulations to fight worldwide corruption.
Expert analysis will provide crucial new information about how professional and financial service providers are legally enabling illicit finance and helping kleptocrats hide assets.
Through a novel partnership with investigative outlet the Organized Crime and Corruption Reporting Project, University of Exeter and University of Oxford researchers will compile and analyse new sources of data to show more about the networks which enable corruption and which services, places and players are most involved.
They will collect new data about politically exposed people who are known to hold assets in the United Kingdom, and the professionals who enable them to move assets.
The evidence will be designed to help regulators and parliamentarians craft new rules and better target their enforcement efforts.
The research will be carried out by John Heathershaw and Tom Mayne, from the University of Exeter, Ricardo Soares de Oliveira, from the University of Oxford, Alexandra Gillies and colleagues at the Organized Crime and Corruption Reporting Project, and Tena Prelec, from the University of Rijeka. Their research has previously informed the new Economic Crime Act.
Professor Heathershaw said: “Lawyers, accountants, company service providers and other professionals often play essential roles in the movement of illicit wealth. They can be enormously powerful and effective at resisting both scrutiny and regulation. This influence, along with the complexity of this terrain, has led to a lack of consensus around what counts as “enabling” activity and what consequences should follow.
“Because enablers come in many different forms and work in jurisdictions around the world, reporting on and regulating their behaviour is complex and requires action from a myriad of bodies. Enablers often conduct their work away from the public eye which makes reporting and oversight even more difficult.
“For more effective systems of deterrence and accountability to emerge, we need a stronger evidence base about enabler activity, and more advanced understandings of the risks and vulnerabilities of their transactions. Our work will help the anti-corruption community acquire the information and motivation it needs to meet this opportunity.”
Professor Soares de Oliveira said: “I am delighted with the prospect of working with OCCRP and Exeter on this pioneering project – this sort of collaboration between journalists and scholars holds extraordinary promise in terms of both knowledge production and urgent regulatory reform of service provision to kleptocrats.”
This is the first-ever large-scale effort to marshal the Organized Crime and Corruption Reporting Project’s capacities for academic research, including its Aleph database. Aleph is an investigative data platform that helps investigative journalists “follow the money” and contains more than 4 billion entities, including detailed information on corporate ownership and financial transactions.
“Armies of professionals around the world are helping corrupt individuals conduct their dirty business,” said Global Anti-Corruption Consortium Director Alexandra Gillies, the project’s lead at OCCRP. “Given the massive scale and secrecy of their work, we need silo-busting partnerships like this one to understand how these global networks function, and to chip away at the harm they cause.”
Enduring networks tend to be composed of a mix of boutique companies and large firms, plus top executives, banks, and large legal firms. Little is known about how these elements interact, which of their services are the most essential, which jurisdictions are tied together in networks, and when enabling services matter. If regulators can identify key nodes in enabling networks, they will be able to target their transparency measures and enforcement actions rather than simply overwhelming the system with new but likely ineffective bureaucratic requirements