Russian Corruption Is an Urgent Security Threat

Foreign Policy, 05.07.2022
Nathalie Loiseau (eurodiputada francesa) y Peter Meijer (congresista norteamericano)
Western agencies need funding and power to tackle the Kremlin’s influence

Europeans will remember Feb. 24 the same way that Americans remember 9/11. Russian President Vladimir Putin’s unprovoked invasion of Ukraine shocked and horrified Europeans. And, as in the aftermath of the attack on the United States, members of the trans-Atlantic community stood shoulder to shoulder as they scrambled to improve their economic defenses against the Kremlin’s threat.

As a result, trans-Atlantic cooperation has been unexpectedly strong in imposing sanctions, resulting in the halving of Russian imports and Russia defaulting on its debt for the first time in over a century. That’s a stark contrast to the awkward and very public disunity on display between the United States and Europe during the 2014 Russian attack on Crimea.

Just as 9/11 prompted new legal tools, the authority and capacity of U.S. and European financial law enforcement have increased dramatically. New platforms for collaboration that extend even beyond trans-Atlantic alliances—such as the Russian Elites, Proxies, and Oligarchs (REPO) Task Force, led by the G-7 and Australia—are breaking ground on global coordination against the Kremlin’s war chest.

But this work is hard, costly, and time consuming. Enforcing sanctions on Iran was already very difficult, and the sanctions on Russia are even more sweeping. Agencies’ responsibilities have dramatically increased as a result, but they have inadequate resources to carry these new, monumental responsibilities. The United States and Europe must engage with each other more to discuss how to realistically enact these crucial actions against the Kremlin’s war chest.

Russia’s transgressions against the United States and Europe do not stop at its invasion of Ukraine. For decades, the Kremlin has infiltrated U.S. and European democratic institutions and amassed a huge amount of influence, blunting the effectiveness and political will of European states. The Kremlin has weaponized corruption, which involves using corruption as a means to achieve strategic goals against the trans-Atlantic community, such as weakening its democratic institutions through interference, co-option, and the destabilization of elites. However, weaponized corruption should not be confused with foreign lobbying, as lobbyists do not necessarily have the same goal of destabilizing democratic institutions while promoting their interests.

Although the United States and Europe have imposed a wide variety of sanctions on the Kremlin and associated elites that maintain these networks of corruption, their proxies remain active in advocating for policies sympathetic to the Kremlin. One such case involves the National Rally in France, the far-right party of former presidential candidate Marine Le Pen. The National Rally has a long history of supporting pro-Kremlin policies, such as Le Pen’s support for recognizing Russia’s annexation of Crimea. The National Rally also voluntarily agreed to repay a loan it received from the Kremlin-aligned First Czech-Russian Bank to Aviazapchast JSC, a company that was recently placed under U.S. sanctions for producing and supplying military aircraft. (Aviazapchast JSC acquired the First Czech-Russian Bank after the latter’s bankruptcy in 2016.)

The National Rally’s connections with the Kremlin are not an isolated case. Long stories about London’s role as a center of money laundering or relations between Moscow and prominent German politicians demonstrate how Russia’s networks of weaponized corruption are a serious threat to the collective security of the trans-Atlantic alliance. The adoption of pro-Kremlin stances by parties like the National Rally across Europe heavily undermine the unity of the trans-Atlantic alliance, providing gaps in the alliance’s defenses for the Kremlin to exploit.

For that reason, the next U.S.-EU summit must prioritize defending the trans-Atlantic alliance against weaponized corruption. The United States and Europe should outline a long-term plan for confrontation against countries that regularly engage in global-scale money laundering and sanctions evasion—as well as use corruption to achieve strategic gains against their democratic adversaries. Beyond Russia, other countries that are known to have weaponized corruption include post-Soviet countries like Azerbaijan and Kazakhstan.

By setting anti-corruption as a priority at the next U.S.-EU summit, there are a few measures the United States and European Union can take to improve economic defenses against the Kremlin and other countries that rely on weaponized corruption for strategic gains.

For example, the United States and the EU should develop a formal platform for discussing sanctions coordination, exchanging financial intelligence and good practices, and developing much-needed reforms to financial law enforcement. The United Kingdom, which even post-Brexit has a strong interest in cooperation with the EU and United States on this, should also be included.

Such a platform could be a first step toward a Global Anti-Corruption Coordination Council, composed of the G-7 and other willing countries. Such an idea already has support in Canada and Britain. This body should convene at the ministerial level at least twice a year while holding regular meetings of working groups virtually.

This body should not operate on the tactical level to address specific cases of sanctions enforcement, as that would overlap with the purview of the REPO Task Force. Rather, this body should work at the strategic level, identifying serious structural vulnerabilities that currently exist in the trans-Atlantic community’s enforcement of sanctions. They can start by holding enablers of foreign weaponized corruption accountable and focusing on the role of tax havens in the protection of dirty money. Another essential early step is identifying and extending financial law enforcement to industries that tend to be overlooked, including the trading of fine arts and the management of private investment funds.

All this takes funding. These agencies struggle with mounting priorities without the resources to fully carry them out successfully. For instance, the Financial Crimes Enforcement Network, the U.S. financial intelligence unit, only has $161 millions of funding for fiscal year 2022, which is only 0.0006 percent of U.S. GDP. To that end, the United States and Europe should take inspiration from the 2014 Wales NATO summit declaration, where NATO members committed to spending at least 2 percent of their GDP on their militaries and agreed to devote a set percentage of their GDP to combating financial crime and improving sanctions enforcement. This would alleviate the chronic funding and capacity issues that financial law enforcement agencies consistently face across the trans-Atlantic community.

These proposals are not solutions in and of themselves. Instead, they are meant to set up for longer-term actions to defend the democratic world against the Kremlin and other authoritarian regimes reliant on using weaponized corruption in their foreign policies.

For too long, democracies have been on autopilot when it comes to identifying the risks of weaponized corruption. Ukraine has paid the heaviest price for the trans-Atlantic community’s apathy toward the global influence of authoritarian regimes. If major steps are not taken now to rectify these oversights, Ukraine will be the first of many to fall victim to such failure.

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