Corruption sanctions
Corruption sanctions
How can governments respond to serious corruption when those responsible are beyond the reach of the law?
Weak institutions, political protection or limited law enforcement capacity can make it difficult to investigate or prosecute powerful individuals suspected of corruption. In response, some governments have turned to corruption sanctions.
Corruption sanctions allow governments to impose restrictions on people suspected of serious corruption even without a criminal conviction.
This Quick Guide introduces corruption sanctions, explains how they work and highlights both their potential and the concerns they raise.
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A Quick Guide by Dr Anton Moiseienko, Associate Professor of Law, ANU Law School
How can governments respond to serious corruption when those responsible are beyond the reach of the law?
Weak institutions, political protection or limited law enforcement capacity can make it difficult to investigate or prosecute powerful individuals suspected of corruption. In response, some governments have turned to corruption sanctions.
Corruption sanctions allow governments to impose restrictions on people suspected of serious corruption even without a criminal conviction.
This Quick Guide introduces corruption sanctions, explains how they work and highlights both their potential and the concerns they raise.
What are corruption sanctions?
Corruption sanctions are targeted restrictive measures imposed by governments in response to alleged corruption.
In this context, "sanctions" does not mean criminal punishment. Corruption sanctions do not require a court to find someone guilty. Instead, governments impose measures based on their sanctions powers and applicable evidentiary standards.
Unlike broad economic sanctions aimed at an entire country, corruption sanctions target specific people or entities. They are also a form of "thematic sanctions", meaning they target a particular type of conduct – in this case corruption – regardless of where in the world it occurs.
Governments usually impose corruption sanctions autonomously rather than through the United Nations. Most countries that use corruption sanctions do so under broader sanctions frameworks, although some have introduced corruption-specific sanctions laws.
Corruption sanctions complement – and do not replace – criminal justice tools. They are best understood as a useful addition to the anti-corruption toolbox where prosecutions, confiscation proceedings or international cooperation are unavailable, delayed or unlikely to succeed.
Corruption sanctions regimes across the world
The United States has developed one of the best-known corruption sanctions systems through its Global Magnitsky framework.
Origins of corruption sanctions
The Global Magnitsky framework takes its name from Sergei Magnitsky, a Russian lawyer and tax accountant who uncovered an alleged large-scale fraud by Russian tax and law enforcement officials. After reporting the fraud, he was arrested, denied medical treatment and died in a Moscow prison in 2009. His death prompted a campaign to hold those responsible to account, ultimately leading to the Magnitsky Act 2012 and, later, the Global Magnitsky Act 2016.
Other countries, including Australia, Canada and the United Kingdom, have adopted their own regimes. Initially at least, sanctions designations often overlapped. Uzbekistan's Gulnara Karimova, former Gambian president Yahya Jammeh and South Africa's Gupta brothers are among the well-known figures targeted by corruption sanctions in both the US and UK.
The European Union has taken a different path. Following political upheaval in countries including Egypt, Tunisia and Ukraine, the EU introduced "misappropriation sanctions" aimed at freezing assets linked to former officials suspected of misusing public funds. These measures focused on preserving assets while criminal investigations or confiscation proceedings took place elsewhere.
Key features: flexibility and versatility
Corruption sanctions have two features that make them attractive to governments.
First, their flexibility. Governments can often impose corruption sanctions using lower evidentiary thresholds than criminal proceedings require. Some systems rely on standards such as "reasonable grounds to suspect" or "credible evidence". Governments also do not need a geographical connection to the alleged corruption. This allows them to respond to corruption taking place elsewhere in the world.
Second, their versatility. Corruption sanctions can have a variety of objectives, such as:
- change the behaviour of a person or entity;
- disrupt corrupt activity;
- deter future corruption;
- condemn serious corruption publicly;
- impose consequences on the targeted person, as a form of accountability;
- support asset recovery efforts;
- support another country's law enforcement actions.
Different governments place different emphasis on these objectives, which can co-exist in any one case.
How do they work in practice?
Corruption sanctions usually involve financial restrictions and travel restrictions.
Financial restrictions include asset freezes, in other words they prevent someone from using or moving their assets.
Banks and financial institutions are generally required to identify accounts linked to sanctioned persons and block transactions involving them. Businesses and individuals may also be prohibited from making funds or assets available to sanctioned persons.
Travel restrictions may include visa bans, refusal of entry or deportation of foreign nationals already present in the country.
Financial restrictions usually need to be public so banks and businesses can comply with them. Travel restrictions can sometimes remain confidential.
Do they work in practice?
Corruption sanctions can increase pressure on people suspected of corruption. They may disrupt financial activity, attract public scrutiny or support wider investigations. They can also help governments respond more quickly than traditional criminal justice processes sometimes allow.
However, evidence on long-term impact remains limited.
Direct behaviour change appears relatively uncommon. Corruption sanctions may work indirectly by increasing costs, scrutiny and pressure around suspected corruption.
Their effectiveness may also depend on how governments use them. Careful target selection and a clear strategy matter.
What are concerns around corruption sanctions?
The same features that make corruption sanctions useful also make them controversial.
Corruption sanctions give governments broad powers. Politicians often have considerable discretion over who is sanctioned, how long restrictions remain in place and when exemptions or delisting should occur.
Courts can review sanctions decisions in many countries. However, successful legal challenges are often difficult.
Critics argue that these features create risks of mistakes, politicisation or unfairness.
For this reason, corruption sanctions frameworks need safeguards. Governments should have a clear strategy for what sanctions are meant to achieve once imposed, how long they will remain in place, and how they interact with other available tools such as criminal prosecution or asset confiscation.
Transparency, accountability and clear oversight processes are equally important for ensuring corruption sanctions remain credible and consistent.
The bottom line
Used responsibly, corruption sanctions can strengthen anti-corruption efforts. Used poorly, they risk undermining trust and legitimacy.
They are not a substitute for criminal justice. But where traditional tools cannot reach, corruption sanctions may give governments another way to target and challenge serious corruption.
Learn more
Read Dr Anton Moiseienko's Working Paper "Corruption sanctions: What governments need to know" for a deeper analysis of the topic and key policy recommendations.