TI ¦ Corruption Perceptions Index 2025

Global Corruption Perceptions Index 2025: Why the World’s Integrity Deficit Is a Financial‑Crime Threat

The 2025 Corruption Perceptions Index (CPI) from Transparency International (TI) delivers a stark message: the global average score has fallen to 42 out of 100 for the first time in more than a decade, and 122 of 182 countries score below 50. For financial‑crime practitioners, policymakers and compliance officers, this decline matters because corruption and weak governance amplify opportunities for bribery, embezzlement, illicit enrichment, money laundering and transnational asset flight. The CPI shows not only where public‑sector corruption is perceived to be worst, but also where the institutional conditions that enable large‑scale financial crime – politicised judiciaries, restricted civic space, opaque political finance, and poorly overseen public procurement – are most pronounced.

Jump to: Luxembourg-specific considerations

Democratic backsliding, state capture and the rise of impunity

A clear pattern in the CPI data is the link between weakened democratic checks and rising corruption risk. Countries classified as full democracies average a CPI score around 71, flawed democracies average 47, and non‑democratic regimes average 32. In states where executive control has expanded at the expense of independent judiciaries, audit institutions and free media, corruption becomes systemic and harder to detect. State capture and the weaponisation of public institutions create enabling environments for grand corruption: contracts diverted to cronies, off‑budget schemes, and procurement channels used to enrich insiders. These dynamics increase the volume and complexity of illicit flows that cross borders and end up in jurisdictions with financial secrecy or weak due diligence.

Why civic space and media freedom matter for financial‑crime prevention

The CPI reinforces a practical truth for financial crime prevention: independent journalists, civil society and whistleblowers are frontline detectors of illicit flows. Countries whose civic space is open average substantially higher CPI scores than those where civic freedoms are repressed or closed. Where NGO funding is restricted, foreign‑agent laws intimidate watchdogs, and journalists are prosecuted or murdered for reporting corruption, critical sources of information disappear. For banks, asset managers and investigators, this means fewer leads, delayed detection of suspicious activity, and a much higher probability that proceeds of corruption will be successfully layered and integrated abroad.

Bastian Schwind-Wagner _Follow

"The 2025 CPI shows that weakening institutions and shrinking civic space create fertile ground for financial crime, as corrupt actors exploit gaps in oversight and enforcement. Without stronger protections for independent media, judges and auditors, illicit funds are more likely to be hidden and integrated into global financial systems.

Combining improved domestic governance with targeted international cooperation is the practical way to reduce those risks and recover stolen assets. Financial institutions, regulators and civil society must coordinate more effectively to detect, disrupt and deter cross‑border laundering and grand corruption."

Public‑sector weakness and the effectiveness of enforcement

The CPI is a perceptions index of public‑sector corruption, but its findings have direct enforcement implications. Declines in CPI scores often coincide with politicisation of prosecutorial decisions and weakened courts, which blunt anti‑corruption enforcement and reduce the likelihood of successful asset recovery. Even in countries with relatively strong CPI scores, recent slippages in political integrity – such as relaxed enforcement of anti‑bribery rules or inconsistent oversight of political finance and lobbying – increase the compliance burden for multinational firms and expand opportunities for corrupt actors to exploit regulatory gaps.

Cross‑border flows, financial hubs and laundering risks

Transparency International’s report highlights an uncomfortable reality: countries that rank higher on the CPI can still be safe havens for dirty money. Professional services, secrecy jurisdictions and lightly regulated financial centres are routinely used to launder, invest and hide corruptly acquired assets. That makes the global fight against financial crime a two‑track task: strengthening domestic anti‑corruption systems where resources are diverted and, simultaneously, closing the doors in jurisdictions that enable concealment. Enhanced due diligence (EDD), beneficial‑ownership transparency and effective mutual legal assistance are not optional; they are essential tools to cut off the avenues that turn domestic corruption into transnational financial crime.

Sectoral hotspots and real‑world consequences

Corruption’s direct impact on service delivery and fiscal integrity creates humanitarian and macroeconomic risks that interact with financial crime. Misappropriation of funds reduces capacity to deliver health and education, and contributes to inequality and social unrest–factors that, in turn, breed more illicit flows and capital flight. In crisis‑affected states and fragile environments, the CPI highlights how public funds intended for infrastructure, debt servicing or climate adaptation are particularly vulnerable to diversion. For creditors, multilaterals and private lenders, corruption across the debt cycle raises repayment, reputational and legal risks; for investigators and compliance teams, it presents complex tracing and recovery challenges.

What has changed since 2012 – and what that means for practitioners

The CPI shows two main trends.

First, some countries have seen long‑term declines driven by sustained erosion of oversight institutions and entrenched patronage systems; where this happens, corruption risks become more sophisticated and harder to prosecute.

Second, a group of higher‑scoring democracies have recently slipped because of weakened checks and balances, politicised enforcement or gaps in political‑finance transparency.

From a financial‑crime perspective, both trends signal a broader playing field for perpetrators: in declining democracies, sophisticated schemes exploit captured institutions; in backsliding high‑income countries, opacity and inconsistent enforcement open windows for illicit actors to operate with less risk of detection.

Practical implications for financial‑crime prevention and response

First, compliance and investigative strategies must be calibrated to political‑institutional risk: assessments should integrate indicators of judicial independence, audit capacity and civic freedoms, not just macroeconomic variables.

Second, enhanced customer due diligence (CDD) and ongoing transaction monitoring (TM) should be scaled where CPI scores indicate higher corruption risk or where civic space has narrowed, because the disappearance of watchdogs increases the chance that illicit behaviour will remain undetected.

Third, anti‑money‑laundering (AML) authorities and private sector teams need to prioritise cross‑border cooperation, mutual legal assistance (MLA) and asset‑tracing partnerships – especially when dealing with funds originating from states with entrenched corruption or weak enforcement.

Fourth, protective measures for whistleblowers and journalists are vital: financial institutions should establish secure reporting channels and consider partnerships with NGOs that can provide corroboration and context for suspicious activity.

Recommended policy and operational responses

Governments and financial institutions should pursue complementary actions. Governments must strengthen prosecutorial independence, modernise procurement systems (including e‑procurement), enforce political‑finance transparency, and protect civic actors and journalists. Financial institutions should adopt dynamic risk models that use CPI trends, judicial independence indices and civic‑space metrics to adjust scrutiny levels. Regulators must ensure that enforcement of anti‑bribery and AML laws remains consistent and well resourced; inconsistent enforcement sends signals that reduce deterrence and increase the attractiveness of jurisdictions as safe havens. Finally, asset‑recovery frameworks need streamlining – faster, more secure channels to freeze and repatriate corruptly acquired assets are essential to reduce impunity and return value to harmed populations.

Luxembourg-specific considerations

Corruption‑driven financial crime highlighted by the CPI 2025 has specific resonance in Luxembourg given the size and international orientation of its financial sector. Banks, investment funds, payment service providers and a growing FinTech and professional services ecosystem operate under a dense EU and national AML/CFT framework administered locally by the Commission de Surveillance du Secteur Financier (CSSF) and the Administration de l’enregistrement, des domaines et de la TVA (AED). The island‑style concentration of cross‑border flows and fund structures increases the need for vigilance where corruption risks originate in lower‑scoring jurisdictions or involve complex ownership chains.

Typical CSSF focus areas or supervisory expectations

The CSSF expects robust governance and clear allocation of AML responsibilities at board and senior management level, proportionate risk assessments that reflect country‑risk dynamics, and enhanced due diligence (EDD) where politically exposed persons or corruption red flags are present. Supervisory scrutiny typically targets adequacy of documentation, evidence of ongoing transaction monitoring, timely suspicious activity reporting, and the effectiveness of controls over onboarding, correspondent relationships and service providers. Recordkeeping sufficient to support supervisory review and potential mutual legal assistance requests is also a recurring expectation.

Practical implications for in‑scope institutions

Luxembourg entities should ensure their AML frameworks integrate CPI‑driven country and sector indicators into client risk scoring, transaction monitoring thresholds and escalation protocols. Governance must demonstrate independent oversight, regular challenge from compliance, and documented management actions when corruption risks rise. Practical measures include strengthening beneficial‑ownership verification for fund structures, tightening contractual due diligence for PSFs and FinTech correspondents, and documenting rationale for risk‑based decisions to satisfy CSSF review. Training and scenario testing that incorporate corruption‑related typologies will help operational teams recognise and escalate complex, cross‑border indicators.

Conclusion – corruption is a financial‑crime accelerator, and the world is slipping

The CPI 2025 is a warning: perceived public‑sector corruption is rising in many parts of the world, and the institutional erosion that accompanies it creates richer pickings for financial criminals. For those who investigate, prevent and prosecute financial crime, the report underscores the need to widen the aperture of risk assessment and response. Tackling corruption requires both domestic reform to shore up institutions and stronger international cooperation to block cross‑border laundering and recover stolen assets. In the absence of sustained, coordinated action, corruption will keep feeding financial crime, deepen inequality and undermine efforts to deliver stable, accountable public services.

Dive deeper

• Transparency International ¦ Corruption Perceptions Index 2025 ¦ Link ¦ licensed under the following terms, with no changes made: CC BY-ND 4.0
• Transparency International ¦ Interactive index and links to global and regional insight ¦ Link