Chapter 4. Corruption risks in the regulation and management of operations

This chapter identifies corruption risks in the regulation and management of operations. It is divided into four main categories: i) corruption in the procurement of goods and services; ii) regulatory capture or violation; iii) corruption in the conduct of daily operations, and iv) corruption in the acquisition or selling of shares or concessions. It further elaborates on mitigation measures that home and host governments and companies can take to address those risks.

Figure 4.1. Corruption risks in the regulation and management of operations

Corruption in the procurement of goods and services

The procurement of goods and services in the extractive sector refers to the acquisition of goods, equipment and services from local or foreign suppliers by the main contractor. The main contractor is understood as any entity (either private or a state-owned) with whom extractive companies enter into a contractual relationship (e.g. for engineering, procurement and construction, and maintenance service contracts). Goods and services may be acquired through a bidding process or direct negotiation with suppliers.

Procurement processes are regarded as one of the highest areas of risk in the operational management of extractive projects, and in the development phase in particular.

Corruption schemes

Corruption schemes may include bid rigging practices, undue favouritism in the choice of suppliers, cronyism and bribery associated with the misuse of local content requirements, bribery associated with mispricing practices in the procurement of infrastructure services, and bribery associated with the provision of intellectual services.

Bid rigging

Bid rigging (OECD, 2009) (or collusive bidding) occurs when “businesses, that would otherwise be expected to compete, secretly conspire to raise prices or lower the quality of goods or services acquired through a bidding process”. Bid rigging schemes in procurement processes include cases in which co-operating companies agree not to compete or to submit deliberately inflated or defective bids to ensure the selection of the designated winner. In exchange, the winner might pay to the losing bidders a share of the premium of the contract obtained as a result of the collusion, hire them as subcontractors, or allow them to win in following bids or other high priced contracts. The last case is referred to as bid rotation schemes.

Inflated bids resulting from these collusive behaviours generate a windfall with which to bribe cooperating companies or public officials. Bribery payments are often disguised as commissions or mark-up on sales.

Other bid rigging schemes include “lowballing” practices that consist of a collusive arrangement between a bidder and the public official responsible for awarding the contract. In a lowballing scheme, the bidder agrees with the public official to submit the lowest bid with the understanding that once the contract is awarded, the price will increase (World Bank, 2007). The modifications and amendments can also be agreed following the award of the contract. Such was the case in the example of a contract for the distribution of natural gas, which stipulated the specific number of domestic users to benefit from the service, a provision that was modified two years after the signing of the contract, without any explanation.1

Undue favouritism of suppliers

Direct negotiation with suppliers for the procurement of equipment, goods and services may be prone to corruption (for example, bribery, conflicts of interest and favouritism) when the company favours one supplier against competitors on non-market grounds; or for reasons other than longstanding connections due to trust; or as a result of political capture when the company is being urged to select local suppliers with close political ties and affiliations.2 Companies may also be exposed to those risks in contract renegotiation or extension.

Favouritism, cronyism, kickbacks and bribery associated with the misuse of local content requirements

Local content requirements may be misused when contracts to supply extractive industries are awarded to shell or front companies, resulting in cost inflation and delays in project execution. In such cases, there is only a semblance of compliance with local content requirements since typically the front company does not have the capacity to actually implement the contract and will most likely further subcontract to a competent foreign operational entity. Alternatively, local content requirements may be used to favour local companies with political ties and connections and/or to channel and disguise kickback schemes involving the prime contractor and public officials. Companies may be “advised” that awards to certain local firms, connected with public officials, could have a favourable impact on their business (World Bank, 2007). There can also be a risk that local companies bribe or offer kickbacks to public officials to be included in the list of pre‐qualified suppliers (Martini, 2014).

Bribery associated with mispricing practices in the procurement of infrastructure services

Foreign companies may be exposed to specific corruption risks in the context of the procurement of infrastructure services. Transportation infrastructure for extractives, including pipelines, storage or transfer terminals, and port jetties is often characterised by natural, absolute or quasi-monopolies. Empirical evidence based on concrete experience, shared by participants in the Working Group on Corruption Risks, show that corruption may occur when granting or controlling access to infrastructure services. At the initial stage, a company may be prompted to make payments to public officials when negotiating and entering into an agreement with government. The lack of competition also favours opacity and discretion in defining the terms and conditions of access, including the appropriate level of fees and charges to be applied which may be inflated for bribery purposes. At a later stage, the company may be further solicited for bribery payments by public administrators in charge of controlling access to infrastructure (World Bank, 2007).

Patronage and clientelism in the procurement of intellectual services

Extractive companies may be exposed to risks of patronage and clientelism in the procurement of intellectual services when they are urged to hire local consultants based on political affiliations rather than on commercial grounds (price, skills and competencies).3

Parties involved

With regard to bid rigging schemes and the misuse of local content requirements, the principal parties to corruption in procurement processes are usually the main contractor and the subcontractors. In many reported corruption cases, the main contractor is a state-owned enterprise, particularly in the oil and gas sector. When the main contractor is a foreign private company, the company’s entity involved in the corruption scheme will most often be the subsidiary operating in the country. Even in cases where no public institution is involved in the tendering process (e.g. between the main private operator and suppliers), the ultimate award of the contract might rely upon favourable recommendations by public officials such as executives of state-owned enterprises, resulting in awards to firms with limited demonstrated capacity.

Subcontractors may be either local suppliers with strong connections and an affiliation with public officials from government or a state-owned enterprise. When the main contractor is a foreign private company, it may also be that the goods or service providers are affiliated with the company or from the company’s home country.

High-level public officials and politicians may also be involved. In a large-scale corruption scandal in the procurement of services in the oil and gas sector, the press reports the involvement of politicians and officials at the highest level (ministers, state governors, members of parliament, top executives from the state-owned enterprise) through kickback schemes. It is alleged that in exchange for granting the contracts, top executives of the state-owned enterprise would take bribes from local contractors and service providers and funnel the funds to politicians and members of the ruling coalition in order to finance political campaigns and secure congressional votes. Apart from the allegation of bribery payments to the state-owned enterprises, the contractors are accused of forming a cartel to drive up contract prices.

In the case of infrastructure procurement, parties to corruption may be the public officials in charge of negotiating the terms and conditions of the infrastructure service agreement or those in charge of administering and controlling access to the infrastructure. Moreover, high-level influential officials not directly linked to the procurement process may also be involved in this type of corruption scheme.

Vehicles and mechanisms

Shell and front companies

Special-purpose vehicles, such as shell or front companies, may be used to circumvent local content requirements, particularly in countries where local content rules do not clearly define what “local” or “indigenous” actually means. These companies may be hired or purposefully created by foreign companies to participate in the bidding process though these local partners might not have the capacity to deliver on the awarded contract.

Shell and front companies may be further used to disguise kickback schemes between the primary contractor and public or state-owned enterprise officials. As already described in the previous chapter, these types of vehicles may prove particularly efficient to conceal and launder the proceeds of corruption due to the opacity typically surrounding beneficial ownership (World Bank, 2007).

List of local suppliers

National laws and regulations may require principal contractors to select suppliers from a list pre-established by the government. This may expose the contractor to risks of corruption if the criteria required to qualify for the government-sponsored suppliers’ register are lower than the company’s standards on anti-corruption and due diligence.4

Corruption risks

Opacity and discretion in the procurement of goods and services

Insufficient clarity and transparency of procurement rules may leave room for the abuse of power in decision making. For example, inadequate, vague or deliberately exclusive pre-qualification criteria may grant excessive discretion to evaluators in bid evaluation systems, particularly for non-price evaluation criteria (e.g. evaluation systems based on the conversion of evaluation criteria into notional points).5

Similarly, corruption may be facilitated when the legislation does not clearly specify the roles and responsibilities of the different actors, or when it does not spell out information disclosure requirements on private stakes and conflicts of interest for public or state-owned enterprise officials involved in the sector.6 Potential conflicts of interest for state-owned companies may arise in state owned companies where the distinction between the roles of administrator and regulator of the sector are not clearly established. It is reported for example that in an oil‐producing country, subsidiaries of the national oil company participate in bidding processes that the state company is responsible for overseeing (Global Witness, 2012).

Another corruption risk arises in the lack of independent monitoring and oversight of bidding processes, particularly where there are decentralised responsibilities. Limited reporting by state companies and government agencies to the legislature may also contribute to further weakening the integrity of procurement processes.

In some cases, the lack of open, publicly advertised and competitive bidding, the limited participation of international bidders or the excessively bureaucratic nature of the bidding process may limit competition, deter potential bidders from competing, and lead to the suboptimal allocation of contracts to firms with limited demonstrated capacity.

More specifically, risk factors associated with the procurement of infrastructure include the lack of transparency of rules governing access to infrastructure (e.g. non-official and non-public tariffs) as well as of administration of access.

Lack of or inadequate due diligence procedures governing the relationship with suppliers

For the private sector, opportunities for corruption may arise from inadequate segregation of roles and duties within the qualification process, including in the assignment of the contract, monitoring of its performance inadequate rules for the selection of the contractors (e.g. no separate treatment in bids of the technical offer and the economic offer); and insufficient auditing and monitoring of the suppliers’ contract performance may exacerbate the risks.7

Recommended mitigation measures



Opacity and discretion in the procurement of goods and services

What host governments can do

  • When local content targets are in place, assess whether they reflect the sector’s needs and available local capabilities.

  • Adopt, clear, specific, objective criteria for the identification or pre-qualification of local suppliers and the granting of any waivers in order to limit public officials’ discretion.

  • Make all information related to existing local content requirements and pre-qualification criteria publicly available and easily accessible.

  • Carefully define commercial and non-commercial roles of state-owned enterprises and establish appropriate governance mechanisms in order to ensure clear segregation of roles, avoid conflicts of interest and guarantee fair competition in procurement processes (Heller, Mahdavi and Schreuder, 2014).

  • Establish transparent public rules and tariffs for infrastructure access (World Bank, 2007).

  • Publicly disclose infrastructure deals.

What extractive companies/main contractors can do

  • In cases of monopolistic or quasi-monopolistic markets such as for the infrastructure services, require transparency from the government with respect to the calculation of fees and charges, and through international benchmarking or the use of international parameters and quotations.8

Lack of or inadequate due diligence procedures governing the relationship with suppliers

What extractive companies/main contractors can do

  • Conduct due diligence on local suppliers by establishing detailed supplier registration systems and questionnaires in order to gather information (for example, on the business structure, ownership, political connections to government officials and organisations closely linked with the government and other basic information) that can reveal corruption risks.9

  • Where companies are obliged to procure goods and services from pre-qualified suppliers, undertake due diligence in line with the company’s internal management systems and in accordance with available best practice guidance before the opening the offer.10 When pre-qualified suppliers present anomalies, devise a mechanism to alert competent authorities in order for them to take corrective measures or remove the supplier from the list. If no action is taken, consider suspending or discontinuing the relationship with suppliers.

  • Assess, in collaboration with relevant government authorities, chambers of commerce, other business organisations, development agencies and other relevant institutions, the capabilities of domestic businesses to supply particular goods and services.11

  • Implement procurement, commercial and other non-financial controls (e.g. competitive tendering, two signatures on work approvals and strict rules on variations).12

Regulatory capture and violation

This section covers corruption risks related to the regulation of extraction operations. It looks in particular at cases where the purpose of the corrupt conduct is to facilitate regulatory capture and violation. Regulatory capture occurs when a regulatory agency, created to act in the public interest, furthers the interests of groups that dominate the industry or sector it is charged with regulating. Corrupt conduct may be intended to influence regulatory design or enforcement. Corruption associated with regulatory violation is a form of corruption intended to break or disregard existing legislation and regulations.

Corruption schemes

Corruption associated with enforcement of local content requirements

Selection of local joint venture partner

Some countries require that international companies set up a joint venture with local partners for the performance of a licence or permit. In such case the absence of clear rules for the identification of the local company or the discretion left to the government to identify such local partners presents some risk. For instance, when the ultimate beneficiary is a public official or, even worse, when such public official is at the same time the representative of the government involved in the transaction.

Hiring of local staff

Local employment regulations may be subject to nepotism and cronyism, in particular in the context of tight labour markets where good and well-paid employment opportunities are low. The literature highlights instances where local content policies have been abused and positions filled on the basis of family ties, party affiliation or ethnicity rather than qualifications (Oxford Policy Management, 2012).

Regulatory capture and discretion in the enforcement of local content obligations

The discretion often enjoyed by public officials responsible for implementing local content policies, combined with lack of transparency, opens the door for uneven implementation and enforcement of local content rules.

In some instances, international oil companies have complained that local content implementation is “uneven, irregular and non-transparent, particularly at local levels of government” (Martini, 2014). Participants in the working group indicated that impractical or unrealistic requirements provide perverse incentives for companies to obtain waivers under applicable legal regimes or to negotiate tax breaks or subsidies as compensation for compliance with local content regulations.

Finally, public officials’ discretion in the evaluation of waiver applications may provide incentives for corruption. For example, the legislation in one country grants power to the minister to decide to waive local content obligations for a given company or project. Such practice can be highly vulnerable to corruption if the criteria for evaluating waiver applications are not made public, or are not applied in an objective or transparent manner (Martini, 2014).

Corruption related to the violation of customs clearance rules

Corruption related to the violation of customs clearance rules may serve the following purposes: accelerating the customs clearance process, skipping inspection or influencing the inspection’s findings, ignoring errors in documentation and non-compliance with customs regulations, reducing customs duties or resolving a customs dispute. Kickbacks for customs officials may also be designed to circumvent export or import bans or restrictions, or absolve non-compliance with specific product transformation requirements before export.

Thirteen cases in the Trace database refer to corruption related to violation of customs procedures. In three of the cases, improper payments were made to customs authorities to allow shipments to pass through customs in spite of small paperwork errors, to avoid causing significant delays in the importation of necessary supplies by the companies. In one case a company bribed a customs official to block the employees of a competitor company from entering the country. Payments were then made to facilitate the company’s own employees to enter the country and obtain work visas. In the other cases, bribery payments were made in exchange for favourable resolution of a customs dispute, avoidance or reduction of customs duties and penalties, circumvention of customs regulations with regard to special import permits or permit extensions (e.g. for temporary import permits).

Corruption related to the violation of labour and immigration rules

Similarly, corruption related to the violation of labour and immigration rules may be intended to accelerate immigration visa and work permit processing and approval or to settle disputes. The Trace database reports three cases in which improper payments were made to immigration officials to facilitate immigration visa and work permit issuance. In two cases at least, the bribery resulted in abuse of discretionary power, attempted extortion and embezzlement by immigration officials.

In one particular case, a settlement agreement was signed between a company and the country’s tax authorities. The company paid fees and penalties for violation of labour and immigration rules, subsequently embezzled by public officials.

Another case involved insider trading practices as the immigration official started investigating the company’s competitors, purportedly on his own initiative, providing the company with confidential information and making it difficult for the competitors to gain entry.

Corruption related to the violation of environmental regulations

Corruption related to the violation of environmental regulations may be intended to bypass existing legislation, to accelerate administrative procedures to get the necessary operational permits (e.g. environmental assessment, etc.) or to avoid penalties or secure the favourable resolution of disputes. It may take the form of bribery, trading in influence by the company or extortion by public officials.13

The literature cites an ongoing case of opposing indigenous communities and a foreign oil company accused of polluting local waterways severely affecting the indigenous peoples living in the region. Trading in influence by the company and the suspected bribery of a judge from the host country in exchange for false testimony were reported.

Another case points to extortion practices exerted on a company by public officials from the ministry of energy in relation to authorising the implementation of a power plant. The refusal of the company to pay bribes has led to attempts by public officials to sabotage the project, as reported in the complaint filed by the company.14 In another country, public officials allegedly imposed arbitrary fines on companies in order to generate additional revenue regardless of whether environmental regulations were breached or not.15

Finally, corruption may occur during the assessment of environmental liabilities arising in operations at a given site. The high level of discretion exercised by public officials in charge of identifying these environmental liabilities will determine the costs of the investment or operation. In particular, collusion with representatives from the operating companies may prompt those public officials to underestimate environmental liabilities and costs associated with the operations.16

Corruption related to the granting of administrative authorisations to operate

Given the complexity of extractive projects, there are several instances in which companies must obtain authorisations to perform their operations. In addition to work permits and customs clearance, health and environmental permits, security, quality control and assurance of operations (plants, storage, drilling), and local community development are also needed, and corruption (bribery, trading in influence and extortion) may be intended to speed up or circumvent procedures for the issuance of the necessary authorisations.17

Further gate-keeping and corruption may arise in the exercise of periodic controls to confirm the validity of the authorisation granted. These controls can be performed directly by a public official or through authorised third parties (specialised companies/consultants). Corruption may serve to keep inspectors from reporting violations and to avoid penalties or receive favourable treatment in dispute resolution. In some jurisdictions, mining companies may face difficulties in ensuring inspections of their sites and facilities by public officials, and as mandated by law, without providing significant benefits in the form of transport, accommodation and hospitality due to government resource and capacity constraints, especially in remote areas. Although this type of logistical assistance does not by itself substantiate corruption, it might offer opportunities for corruption in exchange for a favourable inspection report.

Parties involved

For corruption cases associated with the enforcement of local content rules, the parties involved in the corruption may be public officials from state-owned enterprises or ministries, representatives of local authorities and communities and private parties including executives from the foreign company’s subsidiary or local suppliers.

In some countries, state-owned enterprises, in particular national oil companies, may be central to administrative corruption stemming from regulatory capture or the violation of local content rules. This may be due to the dual role they sometimes play, de jure or de facto, as producer and regulator of the sector. Where this occurs, national oil companies are typically filling the gap or compensating for the weak capacity of the formal regulatory agency (World Bank, 2007).

Corruption in customs clearance or visa and work permit issuance typically involve customs and immigration officials, yet public officials in ministries may also be bribed to expedite approvals.

For customs clearance and visa or work permit issuance, companies may resort to intermediaries, e.g. independent brokers or consultancy companies, commonly hired to facilitate administrative processing of routine activities (e.g. customs clearance of routine shipment of equipment and materials, issuance, extensions and renewals of temporary importation permits, visas and work permits, etc.).

Depending on the scale of the scheme, corruption related to the violation of environmental regulations, may involve high-level officials in the executive and judiciary, or government inspectors and administrative officers in charge of verifying legislative compliance or delivering authorisations for companies to operate.

In the private sector, junior companies may be prone to engaging in corrupt behaviour in cases of regulatory violation due to their short operational timelines, low reputational risks, highly mobile and flexible nature, limited internal control capabilities and reliance on fickle venture capital. Often subjected to less scrutiny than larger companies, they may operate below accepted standards of corporate ethics. Moreover, due to their higher dependence on finance capital compared with revenue, junior companies tend to face short-term horizons, invest in high-risk areas where the prospects of return are the highest, and operate in weak institutional and regulatory environments where larger firms do not tend to go (Dougherty, 2015).

Vehicles and mechanisms

Intermediaries may be parties to the corrupt schemes described above or used as a vehicle to disguise bribery payments. For instance, in one case in the Trace Compendium database, the intermediary immigration consultancy company had been set up by the immigration official in charge of visa processing and approval in order to conceal bribery payments. In another case, the company hired consultants with no licence to provide visa services but with a close relationship to high-level officials responsible for issuing visas. In those cases, improper payments are disguised in invoices using vague sounding terms such as “consultancy fees” and are falsely recorded in the company’s accounting records.

Corruption risks

Risks associated with the design and enforcement of local content rules

Ill-designed local content rules setting unrealistic targets or vaguely defined roles and responsibilities or evaluation criteria for waiver applications may urge companies to use corrupt practices to circumvent those rules or get favourable treatment. Such rules may also foster political discretion and lack of transparency in their interpretation and enforcement with risks of favouritism and conflicts of interest.

Corruption may also be encouraged by lax or lower standards of government-sponsored supplier registers, compared with operators’ international standards.

For the private sector, corruption risks may include the lack of, or inadequate harmonisation between control standards required by the company and local content requirements provided by the government,18 together with unclear or inappropriate internal procedures for effective implementation and compliance with local content requirements.19

Risks associated with administrative authorisation and clearance procedures

Corruption in authorisation and clearance procedures may be encouraged by ill‐designed, lax or unclear procedures that leave too much scope for interpretation by public officials in charge of enforcement. In one case cited in the Trace Compendium database, the company alleged that procedures associated with obtaining labour and immigration authorisations for short-term workers were not clearly established in the country’s legislation, leaving companies vulnerable to the abuse of power on the part of public officials.

With respect to the regulatory process itself, an insufficient separation between the functions of inspection and assessment, authorisation, and monitoring and control may increase chances of corruption.

Inspections carried out prior to authorisation (e.g. environmental, health and safety inspections, customs inspections) may suffer from inconsistencies, arbitrariness and lack of transparency which increase opportunities for corruption.20 Corruption risks may also arise from excessive bureaucracy, which causes unreasonable processing and approval delays for import permits, visas, work permits, etc. Finally, the lack of safeguards (anti‐corruption compliance training, regular rotation, etc.) for officials exposed to corruption (e.g. inspectors, customs or immigration officials) is of particular concern.

Recommended mitigation measures



Risks associated with the design and enforcement of local content rules

What host governments can do

  • Collaborate with the extractive industry to collectively assess the sector’s needs against available capabilities in the local economy in order to devise a realistic strategy for promoting the participation of local workforces in the value chain of extractive projects (OECD, 2016).

  • Where local content regulations exist, ensure their transparent enforcement and reduce public officials’ discretion by outlining objective criteria for the hiring of local staff and the evaluation and approval of waiver applications, if any.

  • Establish government-sponsored suppliers’ registers based on certification schemes or objective and publicly available evaluation criteria, and ensure mechanisms for banning local enterprises from the register for a defined period of time in cases of non-compliance with anti-corruption laws and policies, and depending on the seriousness of the violation concerned.

Risks associated with administrative authorisation and clearance procedures

What host governments can do

  • Demonstrate leadership and commitment at the highest level of customs and immigration authorities (Revised Arusha Declaration, 2003).

  • Make customs and immigration laws, regulations, procedures and administrative guidelines public, easily accessible and ensure that they are applied in a uniform and consistent manner (Revised Arusha Declaration, 2003).

  • Simplify and streamline the overall operational framework for customs (Revised Arusha Declaration, 2003) and immigration processes in order to reduce discretion of power. For instance with regard to customs clearance processes, this may include harmonising tariff rates, minimising exemptions to standard rules, eliminating unnecessary administrative requirements, reducing the number of customs officials involved in the clearance process, providing clear rules for the classification of goods and transparent clearance requirements, and reducing the number and type of supporting documents to be provided for customs clearance (World Bank, 2007).

  • Ensure regular rotation of customs officers or immigration officials, changing both location and functions assigned, and provide for adequate anti-corruption training (World Bank, 2007).

  • To the extent possible, automate and computerise specific processes so as to reduce the exercise of discretion and the need for direct contact between customs officials and importers or their agents, or between immigration officials and visa applicants.21

  • Implement a range of appropriate monitoring and control mechanisms for customs and immigration processes such as internal check programmes, internal and external auditing and investigation and prosecution regimes (Revised Arusha Declaration, 2003).

  • Solicit private sector feedback – through periodic perception surveys or routine consultations between customs or immigration officials and private sector representatives – in order to assess the performance of the anti-corruption strategy, highlight trends, and identify problem areas (World Bank, 2007).

What companies can do

  • Perform due diligence on the selection of local workforces and suppliers, in particular for service providers (such as those providing assistance for obtaining visas or other permits, custom brokers, freight forwarders).

  • Require control and oversight of the activities of the subsidiaries by the parent company. This may include formal approval of the parent company for performing the most important transactions (World Bank, 2007).

Corruption in the conduct of daily operations

This section covers corruption risks associated with the conduct of daily operations in the different phases of extraction projects (e.g. production, transformation, distribution, transport, marketing, etc.). Corruption schemes described further include corruption related to fraud and document falsification in audit reporting, illegal resource extraction activities, corruption in connection with resource theft, extortion by means of threats on security or continuity of operations, and corruption in connection with espionage activities.

Corruption schemes

Fraud and document falsification in record-keeping or audit reporting

Corruption and bribery may be facilitated by fraud and document falsification in the context of audit reporting. The Trace Compendium database reports a case of corruption in the context of an agreement between a foreign company and a state-owned enterprise under which the company assumed all operational and financial control over the project and was to pay a tariff to the state-owned enterprise in order to use its pipeline to deliver the recovered oil. The state-owned enterprise would then reimburse the company for certain costs incurred in the oil and gas recovery process. Reimbursement was made on the basis of the submission of monthly invoices by the company documenting the volume of oil delivered through the pipeline, the pipeline fee and a calculation of the company’s reimbursable monthly operating costs. Independent auditors were annually mandated by the state-owned enterprise to determine whether costs were properly claimed. The auditors’ report would then be reviewed, discussed and conclusions agreed among the auditors, the company and the state-owned enterprise. It is alleged that during these review sessions, the company made improper payments in order to receive favourable audit reports, increase the costs recoverable under the contract, and reduce the company’s tax obligations.

Suspicious fluctuations in consultancy fees suggest the payment of bribes. In one case, the parent company’s management had an opportunity to discover the improper payments when a senior finance officer took note of an increase in contract labour costs, including consultancy fees in the country branch office. However, because the finance officer accepted the local controller’s explanation and did not make further inquiries, the issue was not investigated fully. As a result, the improper payments were not discovered until the following year; when, as part of the annual budgeting process, the company’s senior management made inquiries upon noticing narrower profit margins in the country branch office. Upon learning of the kickback scheme, the company’s senior management reported the issue to the parent company’s audit committee.

Corruption associated with illegal resource extraction

Informal small-scale and artisanal mining (ELLA, 2012)22 is particularly exposed to corruption risks, and these are often associated with and fuelled by conflicts, political instability and criminal activities such as drug smuggling. Corruption can take the form of exploitation or extortion, as well as fraud, bribery and theft. Some evidence has emerged about the mechanisms of money laundering associated with informal small-scale and artisanal mining involving international transactions as well as gold smuggling and tax fraud. For example, in one gold producing country, illegally extracted gold is laundered through the legal domestic gold sector of the neighbouring country (Global Witness, 2013). Another case shows how drug smugglers launder illegal money through fictitious transactions with local government officials in regions with informal mining activities. Drug smugglers import gold acquired abroad with the proceeds of drug smuggling and distribute it to local government officials. Government officials then send it to the Central Bank and report it as local production in order to receive the corresponding royalties, which are then divided between the local government officials and the drug smugglers (ELLA, 2012).

Bribery and diversion of public resources and assets, including through resource theft

Oil theft is a major concern in certain oil producing countries where it is practised on a large scale and severely erodes and drains revenues from oil. Even more challenging is that it is very often linked to other criminal activities. The diversion of public assets as a result of resource theft can range from small-scale pilfering and illegal local refining to large-scale illegal bunkering in the field or theft at export terminals (Katsouris and Sayne, 2013). Resource theft commonly arises through the bribery of public officials responsible for overseeing and monitoring production volumes. But it may also be orchestrated by elites benefitting from illicit oil exports.

Large-scale oil theft was often reported in the particular context of oil trading restrictions imposed by the UN Oil-for-Food Programme in Iraq. The Programme was initially established to enable Iraq to sell its oil for humanitarian purposes despite an extensive international sanctions regime. Oil thefts can also be used as a system for diverting resources for the benefit of local officials.

Extortion by means of threats on security or continuity of operations

Three cases in the Trace Compendium database relate to the payment of bribes connected to conflicts with local communities. Bribes were paid by a company in exchange for assistance in protecting and defending its operations, managing social unrest and maintaining a stable business environment.

Bribery can also happen in response to the threat of delays or halts in extractive operations or extortion demands in exchange for retaining business in the country. In one case involving extortion on the part of government officials, the company was forced to submit false paperwork and cash in order to retain business with the government and benefit from favourable tax treatment.

In a second case, threats and attempts of extortion were exerted on a subsidiary company following non-compliance with the country’s legislation. The company was required to obtain immigration documentation prior to an expatriate worker’s entry into the country. Immigration officers conducted audits after which they claimed that the company’s expatriates were working without proper immigration documentation. Following the threat of fines, jail and deportation of the expatriate workers unless the company paid cash fines, employees of the subsidiary sought and received authorisation from the parent company’s senior management to pay these officials in cash using their personal funds. The parent company then reimbursed these employees and reflected these payments as visa fines and as payroll advances on the employees’ upcoming bonus. Charges subsequently brought against the parent company did not concern the payment of bribes made in response to extortion demands but rather the inaccurate recording of payments in company’s records.

The database reports a third case in which threats were exerted by public officials from a state-owned enterprise (SOE) on a consultant hired by a foreign company to provide assistance with daily operations, including with the submission of invoices to the SOE. It is alleged that SOE employees threatened to stop or delay the company’s work if the consultant refused to take part in a kickback scheme, which consisted of the consultant overbilling his own services to the company and providing kickbacks to SOE employees. In return, the company would submit inflated invoices to the SOE justified as “lost rig time” in order to cover these additional consultancy costs.

Bribe payments in connection with espionage in industrial operations

One case in the Trace Compendium database relates to the prosecution of a foreign mining company and four employees accused of paying bribes to executives from major local industries in exchange for confidential information on industrial activities and commercial trade secrets. Press reports suggest that political and commercial interests were at the centre of the case and that the arrest of the foreign company’s employees might be related to the decision by the foreign company to cancel an investment deal with one of the country’s state-owned enterprises. Before the case was investigated, the foreign company had been repeatedly accused of forming cartels with other foreign companies to manipulate prices and harm the country’s mining industry.

Parties involved

Corruption associated with illegal resource extraction in the context of artisanal and small-scale artisanal mining (ASM) can involve a variety of stakeholders: i) ASM miners who may not respect the laws regulating their activities; ii) the customers and purchasers of the illegally extracted resources including large-scale mining (LSM) companies, state-owned enterprises, security forces, militia groups or local communities; and iii) the authorities in charge of overseeing the sector, which may include public officials operating at both central and local levels. Local government officials and police forces may agree to turn a blind eye to illegal extraction activities or deprive legitimate right holders in exchange for bribe payments or, conversely, they may actively extort a share of the proceeds (Resosudarmo, 2005). At the national level, high-level officials and senior army officers may also be involved in the ASM activity, which partly explains why there might be little incentive or inclination to regulate artisanal mining or assist in the formalisation of what is often an economically important sector. The literature reports a few large-scale bribery schemes in the informal mining sector involving high-level government officials engaged in illegal mining activities. In one country, the practice was even institutionalised through the formation of syndicates between politicians, police officers and illegal gold partners engaged in an organised and complex network of hidden corruption (Transparency International, 2012). Another case regards the outbreak of a corruption scandal when it was discovered that a high-level government official was heavily involved in the trading of gold, and was operating a gold‐exporting company in areas where gold mining was banned.

The literature points to the major role played by illegal extraction activities in financing illegal armed groups operating in conflict zones. Illegal armed groups may profit from resource extraction and trading by controlling mine sites and demanding crippling taxes from artisanal miners and local mining communities. In some cases, they may confiscate a proportion of the production from artisanal miners and sell it on themselves (Global Witness, 2013).

For oil theft, the parties involved depend on the type of schemes: small-scale pilfering and local refining or illicit trading. In the first case, oil theft activities will mainly involve actors at the local level (public officials, security forces, local communities). The second type of oil theft activities, i.e. illicit oil trading usually require high-level involvement including senior officials from the government and the military, high-level politicians, or regulatory agencies in charge of measuring production and export volumes. Private parties to the scheme include well-connected “big men” operating through local and international networks or commodity traders as well as international oil corporations actively lifting excess crude oil at the export terminals or simply turning a blind eye to the laundering of illicit fuel (Global Initiative Against Transnational Organised Crime, 2015).

In certain countries, large-scale oil thefts have led to the build up of a sophisticated and organised criminal industry involving domestic and international networks. These networks may function as forms of protection “unions”, comprised mainly of corrupt officials from the navy and government, and operating across the illicit supply chain, illegally taxing all actors engaged (Katsouris and Sayne, 2013).

In the particular case of the UN Oil-for-Food Programme, parties to the theft included politicians and senior officials, as well as lower-ranking officials who were in charge of authorising, controlling and verifying the volumes of oil being loaded. For example, in one reported case, the independent quantity-control expert that had been specifically appointed to prevent such thefts agreed to disregard unauthorised oil loadings in exchange for a 2% kickback of the proceeds of the operations from government officials (World Bank, 2007).

Corrupt schemes related to the security of operations and facilities commonly involve local public officials or civil servants. For instance, the mayor of the town located in the vicinity of resource extraction operations, the leader of the local community or local security forces may receive bribes in exchange for serving private security interests, i.e. ensuring security of the company’s facilities without government official permission or prescription.

In the case of extortion by way of threats and pressure exerted on the company’s operations, the instigators of corruption are typically lower-ranking public officials from national or local authorities. The other parties to the scheme will usually be company employees though in one of the above-mentioned cases, the corrupt activity only involved SOE employees and a consultant, without the company’s knowledge.

Vehicles and mechanisms

Vehicles and mechanisms that enable oil theft include underreporting and diversion of production volumes, as well as more direct means, such as tapping into producing wells or pipelines and carrying off the oil. The stolen oil is often added to cargoes transporting legal oil as in the case of the UN Oil-for-Food Programme.

Corruption risks

Risks associated with fraud and document falsification

For both the public and private sectors, risks associated with fraud and document falsification may result from the lack of, weak or inadequate internal control procedures and poor record-keeping and monitoring.

With specific regard to companies, the lack of robust internal financial controls exercised by the parent company may extend to its subsidiaries and offer room for corruption to thrive.

Risks associated with illegal resource extraction

First, corruption associated with illegal resource extraction may arise where regulation of the artisanal and small-scale informal mining sector is either missing, incomplete, too complex or weakly enforced. Opacity of the sector may also be reinforced due to the outdated registration of minerals, limited access to mining titles or the lack of a coherent framework for determining and monitoring the extent of the country’s subsoil wealth.

Moreover, in many cases mineral extraction does not require as much equipment and investment as required for oil and gas which facilitates its illegal extraction and export (OECD, 2012).

Finally, illegal resource extraction and corruption tend to thrive in contexts of conflict, political instability and criminal activity such as drug smuggling, which further challenges the state’s capacity for detection and prevention.

Risks associated with resource theft

Risks associated with resource theft include the lack of adequate control and metering capacity on oil production, storage and transportation on the part of both the government and the private sector23 as well as weaknesses and shortcomings in the inspection of oil volumes produced.

Risks associated with extortion practices

Abuse of power, particularly at the local level (local political elite or security forces), and insufficient control of the central government over local authorities may exacerbate corruption and extortion.

For the private sector, risks favourable to extortion include the lack of internal procedures to tackle extortion demands and prohibit facilitation payments, the failure to conduct due diligence into intermediaries’ and consultants’ backgrounds and to provide anti-corruption compliance training to intermediaries or consultants to avoid exposure and vulnerability to extortion themselves.

Recommended mitigation measures



Risks associated with fraud and document falsification

What host governments and companies can do

  • Design and implement clear internal procedures for record-keeping and financial control.

What companies can do

  • Ensure that the parent company exerts financial control over all subsidiaries.

Risks associated with illegal resource extraction

What host governments can do

  • Regulate the artisanal and small-scale mining sector.

  • Facilitate access to finance by informal miners to legally acquire land for mining.

  • Develop standards and a certification system for artisanal mining.

  • Provide a comprehensive and systematic mapping of mineral resources and mining titles, and make it available in a public registry.

  • Provide incentives for miners to operate legally.

What home governments of companies involved in commodity trading can do

  • Support transparency efforts and regulatory reforms regarding, for example, payments and beneficial ownership.24

What companies can do

  • When sourcing minerals from conflict-affected and high-risk areas, perform due diligence in accordance with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD, 2016).

  • Adopt clear rules and procedures to govern the relationship with artisanal and small-scale miners.

Risks associated with resource theft

What host governments can do

  • Refer to mitigation measures recommended in the sub-section on corruption in commodity trading under Section V (Corruption in Revenue Collection)

  • More specifically, put in place robust mechanisms for metering, monitoring and reconciliation of production volumes at pipelines, transit stations and export terminals.

What home governments of companies involved in commodity trading can do

  • Require commodity trading companies to conduct risk-based supply-chain due diligence (Katsouris and Sayne, 2013).

  • Support transparency efforts and regulatory reforms regarding, for example, payments and beneficial ownership information disclosure.

What companies can do

  • Collaborate with host governments to implement adequate control and metering systems on oil production, storage and transportation.

Risks associated with extortion practices

What companies can do

  • Include extortion practices and facilitation payments in internal compliance procedures and provide adequate training to help employees and intermediaries deal with this kind of situation.

Corruption in the acquisition or selling of shares or concessions

Corruption schemes

The privatisation or the acquisition of shares in a state-owned enterprise, the acquisition of shares in a private company by public or private investors, and the acquisition or selling of concessions may be tainted with risks of bribery, conflicts of interest, political capture, favouritism and clientelism. In the case where shares are sold through a bidding process, the process may be hampered by collusive conduct (Collier and Venables, 2011).

Corruption related to the acquisition or selling of concessions (“grabbing and flipping”)

In one case, assets in a concession were initially transferred at knockdown prices to a series of offshore companies owned by a personal friend of a high-level politician, and registered in jurisdictions where regulations allow beneficial owners to remain secret. The offshore companies in turn sold the same assets at market value to major multinational companies, striking immensely profitable deals. In another case, national authorities revoked a concession awarded to a private company where production was imminent and passed it on to a new joint venture. Through a series of complex transactions, a person with close ties to high-level politicians acquired the rights to the concession. Government officials received kickbacks in return for their sale of assets to the joint venture. The concession was then sold to another multinational company.

Corruption related to privatisation or acquisition of shares in a state-owned enterprise and the acquisition of shares in a private company

Corruption related to the privatisation or acquisition of shares in a state-owned enterprise.

The Trace Compendium database reports two cases of corruption in connection with the direct acquisition of state-owned assets by private actors in the absence of a formal bidding procedure. One case has to do with allegations of bribes paid for the privatisation of a state-owned enterprise; the other is related to the acquisition of shares in a state-owned enterprise. The purpose of the bribe was to secure shares, win control over the state-owned enterprise, or purchase shares at below-market value.

When the process involves a bidding contest, various corruption risks may arise in the different phases of privatisation. First, trading in influence, favouritism, political capture and conflicts of interest may interfere in the decision to privatise and lead to the setting of bidding terms favouring one competitor over the others. Corrupt agents may be offered an interest in the venture. Then, corrupt conduct may plague the pre-privatisation phase during which internal reforms are undertaken to ensure appropriate governance, management and administrative structures to operate as a private company. Conflicts of interest or political interference may contribute to influencing the reforms and changes. During this phase, assessors, consultants and asset evaluators may be hired to evaluate the state-owned enterprise assets and derive the fair value at which the company’s share or the company itself should be sold. These consultants may not be selected on the basis of their competencies but rather on their political affiliations and ties. They may influence decisions in favour of one particular bidder or share confidential information about the company with external actors and potential bidders. During the award itself, the bidding process may be undermined by risks of corruption described in previous sections (i.e. collusive bidding, favouritism, patronage, clientelism, etc.).25 The Trace Compendium database cites a case of collusion between a businessman and public officials to win an auction to seize control of a state-owned enterprise. Bribes were offered in stock shares, cash and other gifts and several front companies owned by the businessman’s family and friends were created to purchase vouchers and options in order to bid for shares in the country’s state-owned extractive enterprise.

Regarding privatisation more specifically, the literature cites, in particular, allegations of political capture and collusion between the government and business elite in a number of producing countries, during the waves of privatisation in the 1990s (Chêne, 2012).

Corruption related to the acquisition or selling of shares of a private entity

Instances of corruption may also arise during the acquisition of shares in a private entity by a private company. Collusive behaviour between the companies involved in the transaction may lead to an over or underestimated value of the shares, which may conceal improper advantages. Where shares are sold at inflated prices and where the beneficial owner of the acquired shares is a public official, the difference between the real value of the shares and the price paid may integrate a bribe. In case of underestimated value, if the beneficial owner of the acquiring party is a public official, the difference between the price paid and the real value (discount) may constitute a bribe.

The press further reports suspicions of corrupt practices in the context of a lawsuit filed by a private company against one of its partners in the exploitation of a mine. The company had sued its partner following its announcement to sell its stake in the mine to a third party, on the grounds that the partnership agreement gave the remaining partners the first right of refusal on any sale. The vendor was suspected of threatening and blackmailing its former partners to abandon judicial charges and corruptly interfered in the national court decision.

When strategic resources are at stake, the state may be entitled by law to become shareholder in ongoing business ventures in order to bear part of the risks and get its share of the profit. Risks of corruption may arise when the decision-making process allows for a high level of discretion of public officials; and public officials, in turn, may collude with or impose their authority on incumbent private entities for personal interests.26

Parties involved

This type of corruption scheme usually involves politicians at the highest level and officials from the state-owned enterprise. It may also involve judicial officers receiving bribes in exchange for favourable treatment in resolving disputes.

For the private sector, corrupt agents may be senior executives in the interested companies, investors, consultants, advisors and intermediaries. In the case of acquiring shares in a private company, the acquirer may be a public (e.g. state-owned) or a private entity. The private entity may be a local private company owned or affiliated with public officials or politicians.

Vehicles and mechanisms

In the case of the privatisation or acquisition of shares in a state-owned company, the bribery scheme may involve setting up a series of front companies to purchase vouchers and options in order to bid on the shares of the state-owned enterprise. Those companies are typically owned by relatives and friends of the public officials or private investors behind the conspiracy. Government officials may be offered vouchers and options as well as a share of the profits realised from the operation by the acquiring companies.

In case of the sale and acquisition of private companies, the corrupt transaction may involve the use of companies whose beneficial owners are concealed or shielded through figureheads or foundations.27

Corruption risks

Lack of transparency in the process of privatisation or selling of shares

Opacities in the process of privatisation or selling of shares may result from the lack of the following elements: an open and transparent bidding process; transparent and appropriate evaluation methods to assess state-owned enterprise’s assets and determine the base price for the sale of shares or privatisation of the state-owned company;28 transparent rules and procedures for the hiring of external consultants, assessors and asset evaluators; harmonisation and enforcement of disclosure standards regarding contractual arrangements (McMillan, 2005); full disclosure of the form of payment, governance and ownership arrangements in the case of state equity participation in private companies (composition of board, audit practices, etc.) (IMF, 2007); and clear regulations allowing for the identification of the ultimate beneficial owners of the operations subject to privatisation or share acquisition.

Inadequate internal rules and procedures governing corporate mergers and acquisitions

For the private sector, risks associated with corruption in the acquisition of shares in a public or private company may include the lack of clear rules and constraints on payment (e.g. cross-border transfers, particularly when tax heavens are involved) (IMF, 2007); insufficient oversight of the parent company over the subsidiary’s merger and acquisition29 as well as inadequate segregation of roles and duties within the sale process (proposal, evaluation, negotiation, final authorisation).

Recommended mitigation measures



Lack of transparency of the process of privatisation or selling of shares

What host governments can do

  • Provide for appropriate and robust regulatory frameworks to be put in place before privatisation begins.

  • Draw up a plan of action to encourage accountability and transparency of privatisation programmes.

  • Allocate shares and interests only through public, transparent and clear tender rules.30

  • Require government officials to disclose assets, including any ownership interests in extractive companies and require public disclosure of beneficial ownership information from corporate entities.

  • Identify and apply in a transparent manner international standards and best practices to determine the base price for the shares of the state-owned company to be fully or partly privatised.31

  • Define a set of transparent rules and a clear and objective process to hire external consultants, assessors and asset evaluators.32

  • Mandate the disclosure of all significant aspects of share acquisition/disposal, ownership and governance in the case of state equity participation in private companies.33

  • Support regulatory reforms regarding, for example, the disclosure of beneficial ownership.

Inadequacy of corporate internal rules and procedures governing mergers and acquisitions

What companies can do

  • Strengthen financial controls, particularly on mergers and acquisitions involving cross-border transfers.

  • Ensure proper segregation of roles and duties within the sale process.

  • Ensure close co-ordination and oversight of the activities of subsidiaries by the parent company, including in mergers and acquisitions. This may involve requiring the approval by the parent company for the most important transactions.


Chene, M. (2012), “Corruption in natural resource management in Mongolia”, U4 Expert Answer, 16 November.

Collier, P. and A.J. Venables (2011), Plundered Nations? Successes and Failures in Natural Resource Extraction, Palgrave Macmillan, October.

Dougherty, M.L. (2015), “By the gun or by the bribe: Firm size, environmental governance and corruption among mining companies in Guatemala”, U4 Issue No. 17, Anti-Corruption Resource Centre, September 2015.

ELLA (2012), “Small-scale and Informal Mining: A Big Problem for Latin American States”, Policy Brief, Evidence and Lessons from Latin America, London, December.

Global Initiative Against Transnational Organised Crime (2015), “Illicit Financial Flows resulting from Illicit Trade in West Africa”, Inception Report, commissioned by the OECD Development Cooperation Directorate, February 2015.

Global Witness (2013), “Putting principles into practice – Risks and opportunities for conflict-free sourcing in eastern Congo”, May.

Global Witness (2012), “Rigged? The Scramble for Africa’s Oil, Gas and Minerals”, January, London.’s%20oil,%20gas%20and%20minerals %20.pdf.

Heller, P., P. Mahdavi and J. Schreuder (2014), Reforming National Oil Companies: Nine recommendations, Natural Resource Governance Institute, July, 9Recs_Web.pdf.

IMF (2007), Guide on Resource Revenue Transparency, Fiscal Affairs Department, International Monetary Fund, Washington, DC.

Katsouris, C. and A. Sayne (2013), Nigeria’s Criminal Crude: International Options to Combat the Export of Stolen Oil, Chatham House, September.

Martini, M. (2014), “Local content policies and corruption in the oil and gas industry,” U4 Expert Answer 2014:15, September.

McMillan, J. (2005), “The Main Institution in the Country Is Corruption: Creating Transparency in Angola”, CDDRL Working Papers Number 36, Center on Democracy, Development, and The Rule of Law, Stanford Institute on International Studies, 7 February, transparency_Angola1_No36.pdf.

OECD (2016), Framework on Public-Private Collaboration for In-Country Shared Value Creation from Extractive Projects, available at

OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris,

OECD (2012), International Drivers of Corruption: A Tool for Analysis, OECD Publishing, Paris,

OECD (2009), Guidelines for Fighting Bid Rigging in Public Procurement – Helping governments to obtain best value for money,

Oxford Policy Management (2012), Enhancing the integrity of the Oil for Development Programme: Assessing vulnerabilities to corruption and identifying prevention measures – case studies of Bolivia, Mozambique Uganda, NORAD,

Resosudarmo, B.P. (2005), The Politics and Economics of Indonesia’s Natural Resources, Institute of Southeast Asian Studies, Indonesia Update Series.

Revised Arusha Declaration (2003), Declaration of the Customs Co-operation Council Concerning Good Governance and Integrity in Customs, done at Arusha, Tanzania, on the 7th day of July 1993 (81st/82nd Council Sessions) and revised in June 2003 (101st/102nd Council Sessions).

Transparency International (2012), Annual State of Corruption Report 2012 – A look at the mining sector in Zimbabwe – Gold, Diamonds and Platinum, Transparency International Zimbabwe, Harare.

World Bank (2007), The Many Faces of Corruption – Tracking Vulnerabilities at the Sector Level, edited by J.E. Campos and S. Pradhan, The International Bank for Reconstruction and Development/The World Bank, Washington, DC,


← 1. Comments received from participants in the Working Group on Corruption Risks during the consultations between January and May 2015.

← 2. See note 1.

← 3. See note 1.

← 4. See note 1.

← 5. World Bank (2007), The Many Faces of Corruption - Tracking Vulnerabilities at the Sector Level, edited by J.E. Campos and S. Pradhan, The International Bank for Reconstruction and Development/The World Bank, Washington, DC. pp 314-315: “The most vulnerable evaluation systems are those that convert evaluation criteria, and sometimes, inexplicably, even price itself, into notional points, which are then awarded to each bid by one or more evaluators based on his or her own subjective assessment of the worth of the bid against each criterion. Under such evaluation systems, there is often no right or wrong answer in the decision-making process, as the winning bid is simply the one that receives the most points; in such a situation, the decision is wide open to corrupt influence, and it becomes all but impossible to hold the evaluators accountable for the correctness of their decision.”

← 6. See note 1.

← 7. See note 1.

← 8. See note 1.

← 9. Comments received from participants in the Working Group on Corruption Risks during the consultations between September and November 2015.

← 10. See note 1.

← 11. See note 9.

← 12. See note 9.

← 13. See the Business Anti-Corruption Portal country profiles available at com/country-profiles: “[...], environmental controls are not effective. It is generally known that company owners violate rules on noise, emission and waste management, and bribes are employed in order to obtain business licenses without complying with all the requirements.”

← 14. See the Business Anti-Corruption Portal country profiles available at com/country-profiles.

← 15. See note 14.

← 16. Comments received from participants during the consultation of the Fourth Meeting of the Policy Dialogue on Natural Resource-based Development on 29 June 2015 at the OECD in Paris.

← 17. See note 1.

← 18. See note 1.

← 19. See note 1.

← 20. See note 14.

← 21. Revised Arusha Declaration (2003), “Declaration of the Customs Co-operation Council Concerning Good Governance and Integrity in Customs”, done at Arusha, Tanzania, on the 7th day of July 1993 (81st/82nd Council Sessions) and revised in June 2003 (101st/102ndCouncil Sessions).

← 22. See note 1.

← 23. See note 1.

← 24. See Chapter 1 for more information.

← 25. See note 1.

← 26. See note 16.

← 27. See note 16.

← 28. See note 1.

← 29. See note 9.

← 30. See note 9.

← 31. See note 9.

← 32. See note 9.

← 33. See note 9.