A Bad Day for Kleptocrats: Let’s Make It Worse

By Nate Sibley

On July 5, 2017, law enforcement agencies from six countries announced the launch of the International Anti-Corruption Coordination Center (IACCC), which “brings together specialist law enforcement officers from multiple jurisdictions into a single location to tackle allegations of grand corruption…The new center will improve fast-time intelligence sharing, assist countries that have suffered grand corruption, and help bring corrupt elites to justice.”

While ad-hoc cooperation between these countries is well established and increasingly effective, to date there has been no dedicated platform for prioritizing and coordinating cross-border investigations of grand corruption. The challenges involved are formidable, with labyrinthine schemes implicating hundreds of actors in dozens of jurisdictions (most of whom are usually hiding behind anonymous shell companies).

The IACCC is therefore an important step for responsible national governments attempting to “catch up” with the globetrotting kleptocrats and rogue regimes who have long since become adept at abusing the borderless global financial system for their own ends. “This is the first law enforcement partnership specifically coordinating the global response to grand corruption,” said Donald Toon, Director of Economic Crime at the UK’s National Crime Agency. “We know from our experience the value that dedicated centers for collaboration bring to successful international law enforcement action, and we will use all our combined expertise to tackle the most complex and devastating cases of corruption.”

The United States’ Federal Bureau of Investigation (FBI) is a founding member of the IACCC, building on a strong tradition of American leadership in hunting down the world’s worst economic criminals. “No matter where corruption occurs, the FBI is committed to rooting out any deceit that betrays the public trust and threatens a fair economy,” said Stephen Richardson, FBI Assistant Director. “The FBI is excited about this opportunity for agencies around the world to come together through the [IACCC] because we are most successful when we collaborate with our global partners.”

The U.S. Department of Homeland Security, Immigration and Customs Enforcement, and Homeland Security Investigations will join later this year, as will Interpol. Other IACCC founding members include Australia, New Zealand, Canada, Singapore, and the UK (which will host the center in its first year). Switzerland and Germany will remain involved with observer status.

Western governments should not only throw their weight behind the IACCC, but should now push for more imaginative ways to address a truly global threat that has no respect for national borders. Not content with wreaking poverty, instability, and conflict on their own countries, kleptocrats also export dirty cash and corrosive values to the West, where they have mostly been welcomed with open arms by local elites. At the other end of the scale, powerful strategic rivals such as Russia are using illicit funds to undermine democracy worldwide, while China targets investments through state-backed companies to increase its financial leverage and access sensitive commercial and national security information.

But Russian criminals and Chinese officials share an Achilles’ heel: They can only move opaque funds into the West with our moral acquiescence, through gaps in financial oversight, and while relying on an unscrupulous minority of lawyers, bankers, and lobbyists to launder their cash and reputations.

We should remember that prevention is better than cure. It is past time to end Western complicity (and lighten the IACCC’s caseload) by neutering the enablers and closing the loopholes.

Nate Sibley is Program Manager of Hudson Institute’s Kleptocracy Initiative.