Basel Institute on Governance ¦ Working Paper 63: Anticipating Future Corruption

Anticipating corruption before it becomes a money-laundering threat

Corruption is often treated as an isolated act: a bribe paid to a public official, a procurement decision influenced by political pressure or a border control bypassed for a fee. For financial crime practitioners, that approach is too narrow.

Corruption is frequently the predicate offense that generates criminal proceeds. Bribes, kickbacks, embezzled public funds, fraud in public procurement and abuse of office can all produce assets that must subsequently be concealed, converted or integrated into the legitimate economy. The resulting money laundering risk does not arise only after the corrupt act. It is often built into the same networks, intermediaries and commercial structures that enable the offense.

A more effective response therefore requires an understanding of how corruption develops, adapts and interacts with other forms of serious crime. Anti-corruption and anti-money laundering measures should not be designed as separate tracks. They need to account for the full chain, from the initial abuse of entrusted power through the movement and use of illicit proceeds.

Corruption is an adaptive system, not a single defect

Traditional anti-corruption strategies often assume a relatively direct relationship between a problem and its solution. If officials are underpaid, salaries should be increased. If controls are weak, they should be strengthened. If discretion creates opportunities for bribery, processes should be automated.

These measures may be useful, but their effects are not necessarily predictable. Corruption develops within social, political, economic, legal and technological systems. Multiple actors interact, respond to incentives and adjust their conduct when the environment changes. Officials, businesses, brokers, criminal organisations, politicians and service users may all participate in patterns that make corruption functional for those involved.

This helps explain why apparently straightforward reforms can produce unexpected results. A measure that closes one channel may increase the value of another. Stronger enforcement may move criminal activity to a less visible location. Digital systems may reduce one form of discretion while creating new opportunities for individuals with privileged access, technical credentials or control over data.

The same process affects money laundering. When a corrupt payment becomes harder to deliver in cash, intermediaries may use companies, trade transactions, professional services, virtual assets or assets held through associates. When a bank increases scrutiny of a particular customer group, proceeds may be redirected through other institutions, jurisdictions or payment channels. The underlying criminal network remains active, but its methods change.

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"Corruption should be treated as a dynamic predicate offense that can generate illicit proceeds and enable organised crime. When enforcement closes one channel, criminal networks may redirect bribery, trafficking and laundering through new people, technologies, businesses or jurisdictions.

Financial crime controls should therefore look beyond past conduct. Mapping actors and incentives, testing likely responses to reforms and monitoring early warning signals can help institutions identify displaced corruption risks and trace proceeds before they are integrated into the legitimate economy."

Predicate offenses and laundering cannot be separated

A corruption investigation that ends with the identification of a bribe payer and recipient may leave the financial crime at its most important stage unexplored. Investigators and reporting entities should ask what happened to the proceeds, who controlled them, which facilitators were involved and whether the same network handled other criminal income.

The predicate offense may take several forms. A public official may receive a payment in exchange for awarding a contract. A company may inflate invoices and transfer the excess to an intermediary. A politically connected individual may divert state resources through a front company. Customs or border personnel may facilitate the movement of drugs or other illicit goods in return for payment. Each scenario can generate proceeds that require laundering, while the laundering activity may provide evidence of the underlying corruption.

Corruption can also facilitate predicate offenses committed by organised criminal groups. At ports and land borders, for example, bribery or coercion may give traffickers access to restricted areas, advance information, altered records or protection from inspection. The proceeds from drug trafficking, smuggling or other illicit trade may then be distributed through corrupt officials, intermediaries and business structures.

This creates a mutually reinforcing relationship. Corruption lowers the operational risk of the predicate offense, while the proceeds from that offense finance further corruption. The network may use money laundering to pay participants, disguise ownership, acquire influence and preserve access to critical infrastructure.

Border controls can displace rather than remove risk

The evolution of corruption at major European border points illustrates the need to assess how criminal networks respond to enforcement.

At the port of Rotterdam, stronger action against drug trafficking and the digitalisation of controls reduced the importance of some traditional opportunities for bribery. However, the risk did not disappear. Attention shifted towards personnel with access to automated systems and the credentials needed to manipulate or bypass digital processes. Collusion and coercion became more important than simply bribing inspectors who conducted physical checks.

From a money laundering perspective, this shift matters because it changes the profiles and financial behaviour that institutions should examine. Individuals who do not appear to hold senior positions may acquire unexplained wealth, receive payments from apparently unrelated companies or maintain relationships with intermediaries connected to logistics, shipping, customs or security services. The relevant risk may be visible only when employment data, company ownership, communications, access logs and financial activity are assessed together.

At the Kapitan Andreevo checkpoint between Bulgaria and Türkiye, regulatory changes linked to European Union accession coincided with higher bribes, more routine corruption schemes and stronger protection arrangements involving senior political and bureaucratic figures. New rules and tax regimes created additional incentives to bypass controls, while concealment methods and smuggling routes changed.

Such developments show why compliance teams should not treat regulatory reform as an automatic reduction in financial crime risk. A new legal framework may alter the price of corruption, the actors who participate in it and the channels through which proceeds are transferred. Increased payments to officials, unusual cash flows around border-related businesses, unexplained wealth held by politically exposed persons (PEPs) and transactions involving newly established intermediaries may all provide relevant indicators.

Foresight improves financial crime controls

Strategic foresight does not attempt to predict one certain future. It examines several plausible developments and considers their consequences for policy, enforcement and risk management. Anticipatory governance applies this thinking throughout the policy cycle, including design, implementation, monitoring and revision.

For anti-money laundering professionals, this approach can strengthen both risk assessment and investigative planning. It encourages institutions to consider not only how criminals have operated, but how they may adapt to a proposed control.

A useful starting point is system mapping. This means identifying the relevant actors, their interests, relationships, incentives and access to resources. In a corruption-related money laundering case, the map may include public officials, contractors, subcontractors, customs agents, freight forwarders, lawyers, accountants, company formation providers, banks, payment institutions and family members or close associates.

The aim is not merely to produce an organisational chart. It is to understand how value and influence move through the system. Questions should include who can authorise a payment, who can alter a record, who can introduce a business partner, who can provide political protection and who can convert illicit proceeds into apparently legitimate assets.

This analysis can reveal risk points that a customer level review may miss. A low-value transaction may be significant if it connects a public official to a contractor, an intermediary and a company that repeatedly wins public tenders. A series of apparently unrelated property purchases may become more meaningful when linked to a network of relatives and associates. A logistics company with modest revenue may warrant further review if its employees have unusual links to port access, customs processes or high-risk trading partners.

Stress-testing reforms and controls

The next stage is to anticipate how affected actors may respond. Cross-impact analysis can be used to assess how a change in one part of the system may affect others. For example, an institution introducing enhanced scrutiny of payments to customs officials should consider whether the risk may move to consulting contracts, gifts, relatives’ accounts, procurement intermediaries or cash-intensive businesses.

Structured expert consultation can also identify blind spots. Frontline investigators, compliance officers, customs specialists, prosecutors, civil society organisations and local businesses may each see different parts of the system. Their combined knowledge can help assess which actors might resist a reform, who has the power to undermine it and what substitute methods criminals may adopt.

This process should produce practical monitoring indicators. Warning signs may include stable drug prices despite intensified enforcement, sudden changes in the use of intermediaries, increases in payments to newly formed companies, unexplained wealth among officials or politically exposed persons, and the rapid movement of funds through accounts with no clear commercial purpose.

Positive indicators should be monitored as well. More credible whistleblowing, improved voluntary compliance, stronger internal reporting and increased public trust may show that a reform is taking hold. Monitoring both warning signs and evidence of progress helps prevent institutions from focusing exclusively on failures after the damage has occurred.

Horizon scanning for emerging laundering channels

Corruption risks are shaped by wider changes. Geopolitical tension, economic pressure, conflicts, changes in trade routes, new technologies and weakening rule-of-law standards can all affect how criminal networks operate.

Horizon scanning involves monitoring research, threat assessments, regulatory developments, news sources, open-source intelligence (OSINT) and expert reporting for early signals of change. Trend analysis places those signals within broader developments, such as the growth of digital trade documentation, the use of artificial intelligence, changes in beneficial ownership practices, sanctions evasion techniques or increased reliance on cash in particular markets.

For financial institutions, this can inform scenario analysis and transaction monitoring. A changing geopolitical environment may increase the use of trade-based money laundering (TBML). A new port technology may create risks around privileged system access. Regulatory changes may generate demand for brokers who can bypass licensing or customs requirements. Economic instability may increase the use of informal value-transfer systems or asset purchases as a means of preserving and concealing wealth.

The key question is not whether a particular trend will definitely produce corruption. It is whether the trend creates new opportunities, incentives or vulnerabilities that should be reflected in risk assessments and controls.

Technology can help, but it cannot replace judgement

Artificial intelligence and other analytical tools can support this work by processing large volumes of information, identifying patterns, generating scenarios and organising relationships between variables. They may assist with open-source monitoring, network analysis, risk scoring and the review of unusual financial activity.

Their limitations are equally important. Data may be incomplete, biased or poorly structured. A model may identify correlation without explaining the underlying conduct. Automated outputs may overlook local practices, informal relationships or coercion. Sensitive conclusions about corruption and financial crime require human review, contextual knowledge and appropriate safeguards.

Technology is most valuable when it supports a broader analytical process rather than operating as a substitute for investigation. A system can flag an unusual payment, but investigators still need to understand the commercial context, identify the beneficial owner, assess the connection to a public official and determine whether the funds relate to a predicate offense.

From reactive detection to adaptive prevention

The central lesson is that anti-corruption and anti-money laundering systems must be designed for adaptation. Criminal networks learn from enforcement, move across institutional boundaries and exploit changes in law, technology and markets. Controls that are evaluated only against past cases may be poorly prepared for the next form of corruption.

A forward-looking approach begins by mapping the system, testing how actors may respond and continuously scanning for broader changes. It treats red flags as signals requiring interpretation, not automatic proof of wrongdoing. It also recognises that successful intervention may displace risk rather than eliminate it.

For financial crime practitioners, this means examining corruption as both a serious offense in its own right and a mechanism that enables other predicate offenses. The objective is to trace the full chain: who abused entrusted power, what criminal activity was facilitated, how proceeds were generated, where value moved and which actors helped integrate it into the legitimate economy.

Foresight cannot remove uncertainty. It can, however, make uncertainty more manageable. By asking who benefits from existing arrangements, how affected actors may adapt and which signals would reveal a change in behaviour, institutions can detect emerging corruption and laundering risks earlier and respond before new criminal methods become established.

Dive deeper

• Research ¦ Costa, Jacopo, Claudia Baez Camargo and Saba Kassa. 2026. ‘Anticipating future corruption: Strengthening anti-corruption through foresight and anticipatory governance’. Working Paper 63, Basel Institute on Governance. Available at: https://baselgovernance.org/resources/publications/wp-63-anticipatory-governance. ¦ Link ¦ licensed under the following terms, with no changes made: CC BY-NC-ND 4.0