Supply Chains & Kleptocracy

Opacity in trade finances kleptocracy

Before corrupt officials launder their ill-gotten gains through sectors like real estate and private investment funds, the international trade in commodities creates opportunities for illicit enrichment through bribery and embezzlement. 

Much of this trade involves commodities and hardware that have severe impacts on the climate and environment. Companies involved in these supply chains may become complicit in sanctions evasion, environmental destruction, war crimes and other abuses of human rights. 

Opacity in supply chains combines with weak oversight of financial systems to create opportunities for trade-based money laundering, generating illicit financial flows from kleptocracies to rule-of-law jurisdictions. 

Since the 2022 invasion of Ukraine, ACDC has coordinated and produced investigations revealing the role of Western energy companies in Russia’s military fuel supply chains, the supply of European equipment to a “carbon bomb” LNG plant in Siberia despite sanctions, and the role of private equity in American and European public pension fund investments in the financing of Russia’s maritime fossil fuels shipments. 

Elsewhere, we are partnering with the Platform to Protect Whistleblowers in Africa to explore patterns of trade-based money laundering from the Democratic Republic of Congo, providing policymakers and practitioners with actionable insights to prevent international trade from fueling kleptocracy.

Top image: Composite using Sentinel-1 in Google Earth Engine
Lowe image: Geopolitical Intelligence Services, CC BY-SA 4.0 , via Wikimedia Commons