Fighting Kleptocracy in an Era of Geopolitics | Countering Kleptocracy

Understanding transnational kleptocracy as a vehicle for theft, repression, and democratic erosion…and how we can respond. If you enjoy this newsletter, forward it to a friend or share on social media so that others can subscribe.


Fighting Kleptocracy in an Era of Geopolitics // March 21

by Ariane GottliebIn February, the Forum published a new report by Ben Judah, and launched the paper at an online event featuring the author, Brett Carter (University of Southern California and Hoover Institution), Zoë Reiter (National Endowment for Democracy), and John K. Glenn (International Forum for Democratic Studies). The report analyzes how geopolitical considerations impact the international fight against kleptocracy and why the two issues are interconnected.As author Ben Judah explains, “democracies will not be successful in advancing either their geopolitical interests or combating kleptocracy unless they recognize that these challenges are deeply related. “The anti-kleptocracy agenda has been shaped by geopolitical concerns across three spheres of foreign policy: great power confrontation with Russia; the superpower challenge from China; and the competition for influence in the Global South.” Following Russia’s invasion of Ukraine in 2022, measures that anti-kleptocracy activists could previously only dream of were rolled out with unprecedented speed. Judah asserts that “for decades, Russia had weaponized kleptocracy against the West; and after the invasion, the anti-kleptocracy agenda was being used to push back in earnest against the Kremlin.” Oligarchs’ assets, status, and privileges—tools that might have fueled the Russian war machine and undermined Kyiv and its allies—have been immobilized and seized. Yet, such measures in isolation are not a panacea to Moscow’s aggression. “The wider geopolitical analysis we can draw from the deployment of the anti-kleptocracy agenda against Russia is that it is principally defensive. It can protect the West, but it is not transformative; it cannot break hardened great power autocratic regimes.” This is, in part, because Russia is not solely a kleptocracy, but a resourceful autocracy which exploits kleptocracy to undermine the democratic world.  Beijing similarly weaponizes kleptocracy to undermine democratic institutions. The CCP has a network of shell companies at its disposal that enable industrial espionage, specifically in the realm of intellectual property. Moreover, the PRC’s state-connected firms and financial institutions have been deployed to subvert democratic sanctions targeting Iran and North Korea. Yet, democracies have often failed to prioritize combating Beijing-backed kleptocracy adequately or understand how these kleptocratic tactics serve as a conduit for the CCP’s global influence. As Judah states, “downplaying kleptocracy grants China an advantage on the global stage by allowing it to operate under its own, preferred set of rules,” again highlighting the linkages between the counter-kleptocracy agenda and broader geopolitical competition with Beijing. Systemic political and economic governance failures in certain African countries further illustrate the necessity of mainstreaming counter-kleptocracy strategies into a broader geopolitical agenda. During the online report launch, Brett Carter explained the importance of asserting a strong “value proposition to Africa’s democracies,” amid the rise of opaque PRC investment in Africa. Liberal governments must step in to fill infrastructure and investment gaps, with terms of engagement that bolster transparency and benefit citizenries. As Carter argued, democracies have an obligation to “live up to their collective values,” rather than pursuing geopolitical agendas that ultimately prop up kleptocratic entities. The anti-kleptocracy community should develop a “geopolitics for anti-kleptocracy,” in which dismantling kleptocracy is a mainstay of democracies’ overarching geopolitical agenda. According to the NED’s Zoë Reiter, it will be crucial to bring together “intersecting threads” of anti-kleptocracy work by mobilizing a networked response to the challenge. Doing so will require leveraging the advantages of independent media and CSOs, scaling up investigative capacities, and pushing for transparency and accountability within global supply chains.As Ben Judah unequivocally states, “we must become much more assertive in rooting out corruption and standing up for democracy. There is no time to lose, and the tools we need to act are ready and waiting.”For more on this topic, read the Forum’s latest report, “Fighting Kleptocracy in an Era of Geopolitics” or tune into the launch event featuring remarks from Ben Judah, Brett Carter, and Zoë Reiter.


Image Credit: erhui1979/Getty Images

Money Laundering in Montenegro’s Real Estate Sector

According to a report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, the 2022 invasion of Ukraine precipitated a rise in non-residents’ investments in Montenegro’s real estate sector. In turn, this has contributed to an increased risk of money laundering. Moreover, many non-residents are taking advantage of Montenegro’s largely nonexistent regulation of digital currency by conducting high-value real estate transactions via cryptocurrency, thereby evading rule of law safeguards.


The Life and Legacy of Alexei Navalny

The National Endowment for Democracy is deeply saddened by the tragic death of Russian opposition leader Alexei Navalny. Navalny devoted his life to the struggle against the Putin regime’s kleptocracy and repression at huge personal risk. His immense personal sacrifice will inspire those fighting for a democratic Russia to devote even greater effort to their cause. Read NED’s statement on this tragedy as well as insights from Navalny on the future of Russia.


Kleptocracy Fueling Conflict in Sudan

Sudan’s deeply entrenched kleptocratic structures have enriched and bolstered malign state actors and criminal entities. According to J.R. Mailey of the Global Initiative Against Transnational Organized Crime, the armed conflict between the Sudanese Armed Forces and Rapid Support Forces can be attributed to both parties’ desire to maintain their economic empires and secure their political longevity. To ensure peace and stability, the international community must enact anti-money laundering measures and sanctions to target the illicit flow of funds and commodities from which these violent actors profit. For more from the Forum, read J.R. Mailey’s “Criminalized States, Militarized Criminals, and Profiteers: Russia, Africa, and the Evolving Ecosystem of Transnational Kleptocracy.”

A Russian Bank Account May Offer Clues to a North Korean Arms Deal (New York Times)

The Kremlin has authorized the release of $9 million USD of North Korean frozen assets, amid bourgeoning political and security cooperation between the two governments. This development, alongside reports that a North Korean front company opened an account with a Russian bank, has prompted speculation that Russia is enabling Pyongyang deliberately to subvert international sanctions. U.S.-allied intelligence officials believe that Moscow’s decision was a direct response to North Korea supplying weapons and ammunition for Russian armed forces in Ukraine.



Congo Can’t Thrive Without Dismantling its Kleptocracy 

Damon Wilson, President and CEO of the National Endowment for Democracy, argues that peace and stability will not be achieved in the Democratic Republic of the Congo until the country’s kleptocratic networks are dismantled. Through sanctions and diplomatic engagement, the international community must engage grassroots organizations and local media in the fight against kleptocracy.

Read more from Damon Wilson in The Hill.


African Investigative Reporters (NAIRE) Solicit Support to Tackle Kleptocrats, Dictators (Premium Times)

The Network of African Investigative Reporters and Editors (NAIRE) published a “call to action” for the international community to support journalists who expose wrongdoings by kleptocratic regimes. As repressive regimes restrict freedom of expression, the landscape for independent investigative reporting grows more challenging and dangerous, stymying inquiries into kleptocracy, corruption, and oppression. Global support for ethical journalism is crucial for Africa and the international community, given kleptocracy’s transnational impact on governance, economic growth, and security.


Money Laundering in Football: The Not So Beautiful Game? (Royal United Services Institute)

Following numerous high-profile money laundering and corruption scandals in club football across Europe and the Middle East, the EU passed anti-money laundering legislation targeting illicit funding and corruption. In an industry worth $600 billion USD, kleptocratic and criminal actors can launder their ill-gotten gains via seemingly legitimate business transactions: purchasing clubs, transferring players, selling sponsorships, and more. Under the new legislation, however, football clubs, agents, and associations will be required to implement risk assessment measures and report suspicious transactions.


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