Three Lessons From the Intersection of Sanctions and Corruption

This article was initially drafted for a Perry World House conference on “The Intersection of Sanctions and Corruption,” which was made possible in part by a generous grant from Carnegie Corporation of New York. The views expressed are solely the author’s and do not reflect those of Perry World House, the University of Pennsylvania, or Carnegie Corporation of New York.

A March 2026 Perry World House conference brought together anti-corruption and sanctions experts to examine how the two domains interact: whether sanctions drive or reinforce corruption, and whether sanctions can meaningfully counter it. Three conclusions from those discussions merit wider attention.

First, even among experts, there is still much that is not understood about corruption dynamics, starting with why corruption exists and why it is so difficult to stamp out, especially as it relates to larger schemes involving government and business leaders. Indeed, in some places, corruption, at the senior-most levels, has become institutionalized and legalized, undermining the overall effects of anti-corruption work at a societal level.

Second, although accountability efforts have imposed consequences on corrupt actors and educated publics, they have largely overlooked the enablers of corruption – lawyers, financiers, and others – who make grand corruption possible. 

Third, existing sanctions tools have proven ineffective at policing corruption in aggregate. But, unlike with other sanctions issues, the problem does not appear to be purely with respect to the resourcing of sanctions efforts or their integration into broader foreign policy. Instead, the issue is one of prioritization of anti-corruption itself.

What We Don’t Understand About Corruption

On the one hand, corruption is relatively easy to understand. It is motivated by greed, whether for riches or power. It is successfully employed by those with leverage over those without, usually by someone taking advantage of another’s need. It definitionally involves the abuse of a public office for private gain. It also can be employed as a means of obtaining public office and staying in it, facilitating the networks that sustain corrupt actors and thereby their corruption. Acts of monetary quid pro quo are often, but not always, involved, especially with more advanced corruption networks and their need to bypass or defeat anti-corruption measures. Corrupt actors often will appeal to historical or cultural rationales to justify their practices, notwithstanding the fact that the vast majority of countries on earth, representing very different cultures and histories, have determined corruption to be a sufficient problem so as to join the United Nations Convention Against Corruption (UNCAC), which identifies corruption as a “threat to the stability and security of societies,” and have committed, on paper at least, to combating corruption both at home and abroad. 

What remains elusive about corruption is how to translate that ostensible commitment at national and international levels that exists for anti-corruption into an operational capacity to police the activities of the senior-most officials or wealthiest individuals. At its most basic level, we see profound inconsistency between anti-corruption rhetoric in many countries and what they do in practice to respond to the challenge. Indeed, although countries have signed on to the UNCAC, there remains a pervasive sense that their commitment is limited to a practical necessity to obtain access to development grants and assistance, or to ensure full participation in the international financial system. Such engagement in anti-corruption is suggestive of a limited investment to the anti-corruption movement, explaining why, in some cases, it is so difficult to get cooperation in countering corruption dynamics even if resources are available.

Moreover, corruption has been institutionalized and legalized in some systems, creating a definitional problem that undermines adherence to rules and norms, as well as accountability to ensure enforcement. Anti-corruption work then becomes as much a definitional battle as a practical one. For example, paying a bribe to an officeholder to make a policy decision in one direction or another can be reasonably expected to be illegal around the world. But, classify that bribe as a campaign contribution, which itself is necessary for individuals and entities to participate fully in the political process, and it becomes much more difficult to decide whether and how to apply anti-corruption standards. Even in a system in which such contributions have to be declared and monitored, the corrupting effects of such transfers can still be felt. Similar points can be made about the creation of anti-corruption agencies (in some systems, an essential element for independent anti-corruption work; in others, a vehicle for defanging investigations) or public transparency into donations and support given to nongovernmental organizations (in some systems, a way of guarding against strategic corruption; in others, a mechanism for targeting activists and protecting corrupt actors). 

With all of these examples, the failure to articulate a common definition hampers anti-corruption efforts, especially by creating an opportunity for relativism and whataboutism excuses by those invested in corrupt enterprises. More fundamentally, these sorts of tussles can be used by those entrenched in corruption to argue against any sorts of reforms or enforcement on the theory that it is all too difficult to police. By contrast, it remains easier conceptually to define and target lower-level corrupt actors, such as those who pay or take bribes for administrative matters. So, anti-corruption efforts are then restricted in practice to these cases, which are easier to prove and maintain even if they do not involve nearly the same scale of harm to businesses, populations, and governments. In this murky context, the major investigations into the 1MDB scandal in Malaysia, for example, or to follow up on the findings of the Panama Papers stand as exceptions that prove the rule of impunity for the well-heeled and powerful. 

The Enabler Problem

Enablers are central in this context, complicating the anti-corruption landscape. Enablers include all of the service providers who wittingly or negligently aid corrupt actors in executing their illicit arrangements or realizing their benefits through money laundering and the like. In a modern corruption landscape, actors require support, either from lawyers, financiers, real estate agents, trust holders, brokers, or any number of other operators prepared to indulge corruption for a fee. 

In theory, these individuals should be supremely vulnerable to accountability, especially sanctions measures. Most of these individuals operate within the international financial system, thereby being exposed to asset freezes and associated limitations on financial-related transactions. Some may travel internationally or be connected to those who do. Many of these individuals live abroad, prepared to lend their access to corrupt actors even if they risk domestic law enforcement for their criminal facilitation. Most importantly, corruption is part of their business, not necessarily the center of it. The threat of prosecution, sanctions, or other accountability measures ought to put the incentives and disincentives around corruption into proper balance, pushing against taking risk to help the corrupt.

In truth, targeting enablers through domestic law enforcement or sanctions has proven difficult, mainly because the enablers themselves are part of a broader fabric of otherwise legitimate business and service sectors. From this perch, they can cynically work against legislation and codes of conduct that would make facilitation of corruption less profitable and more dangerous, while using arguments that otherwise have good faith interpretations. For example, the American Bar Association in the United States has objected to legislation that would create new requirements for reporting and scrutiny of their client work, including the submission of suspicious activity reports (SARs) for financial activity. Some of the arguments used against such legislation have reasonable explanations: infringement on attorney-client privilege and the right to counsel. On the other hand, lawyers engaged in conduct that goes beyond legal defense would not – on its face – seem to be covered to the same degree. Some of the arguments used – such as the fact that lawyers operate under a code of conduct – are unlikely to persuade readers outside of the legal profession. Other service providers have argued that similar steps that interfere with their operations would harm business activity or that they have no obligation to police client behavior. 

The problem is one of inconvenience and cost, as indeed the ABA’s 2022 letter opposing the ENABLERS Act then under consideration in Congress makes clear. Impeding business activity through transparency rules or establishing stronger standards for behavior would imply costs and could lose business, something that service providers are loath to do. 

But, more fundamentally, the issue is of misaligned incentives and consequences. 

Most enablers have little connection to the territories, jurisdictions, or populations that are negatively affected by the corruption they enable. For the agent forming an LLC in Delaware, or the lawyer in London writing the contractual arrangements, or the financier moving the money about in Frankfurt, many of the world’s most corrupt regimes are half a planet away. For them, it is relatively immaterial whether this politician or another is taking bribes for a water treatment plant or failing to follow through on contracts to build transportation infrastructure, especially if proving such fact patterns can be difficult. Diffuse, external costs are easier to dismiss and to ignore.

Externally imposed sanctions are one way to bring the consequences of corruption back home to foreign enablers, but they can only do so much given they depend on exposure to the international financial system and on the cooperation of the jurisdictions where enablers actually live and work. So, in addition to sanctions, domestic structures for monitoring, investigating, and holding accountable these actors are necessary for governments serious about anti-corruption efforts. For example, the reporting obligations contained within the ENABLERS Act would create more exposure and risk for service providers prepared to look the other way. But, this could be combined with an expanded enforcement approach to enablers who are found to have facilitated corruption abroad to allow for asset forfeiture at home, creating risk for those prepared to enable crime elsewhere and enjoy the proceeds in the United States. Service provider licensing could also be made contingent not only on fulfilling mandatory reporting requirements (such as those within ENABLERS) but also the absence of credible allegations of facilitating corrupt acts. Accompanying mechanisms to ensure non-abuse by governments would also be necessary, such as judicial review of prejudicial licensing or asset forfeiture decisions or the creation of independent ombudsmen. 

Anti-Corruption Isn’t Just a Slogan

At the core, governments need to go beyond slogans in their anti-corruption drives and episodic interest demonstrated by senior officials. Resources are a part of this, but so is political attention and political courage to take on interests, even if they are aligned with the political interests of governing bodies. With sanctions, this means being prepared to target corrupt actors and their enablers through sanctions tools, wherever these enablers are found and even if doing so would be counterproductive to other foreign policy interests. For the United States, this may include targeting individuals and entities associated with friendly governments, even if there are other foreign policy interests at stake that could be harmed as a result of an anti-corruption focus. 

For the United States, there are tools to make such engagements positive, structural, and mutually beneficial. The Combating Global Corruption Act of 2023 (CGCA) contained a requirement for an evidence-based report on anti-corruption progress and expressed the intent of tying foreign assistance and cooperation to its results. This structure can be executed to grant resources for anti-corruption work and to identify problem areas for accountability and other measures. But, as previously reported, the first report was due in December 2025 and has yet to be seen. Completing this process and then fulfilling the legislative intent through follow-on work with individual countries is a good first step. But, so too is being ready to use sanctions tools to respond to chronically bad actors, to limit the damage that they can do, and to facilitate the accountability that many anti-corruption actors struggle to achieve. 

Without that prioritization — of enablers as targets, of definitions robust enough to reach senior corruption, and of political will that outlasts any single administration — sanctions will continue to police the margins of corruption while leaving its center untouched.

– Richard Nephew, Published courtesy of Just Security