government defence anti-corruption index 2013 · government defence anti-corruption index 2013 ......

Government Defence Anti-Corruption Index 2013

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Band a)

Type of Corruption Risk

Political Finance Personnel Operations Procurement

Austria B Austria is placed in Band B, with reasonably strong controls across all five risk areas. Pertaining to political corruption risk, there is separation of powers in Austria, and two permanent committees that oversee national security matters and the control of the intelligence services. The defence policy is published across various documents (i.e. the White Books) and is subject to active debate. The Code of Conduct in the Armed Forces and the Criminal Code are relevant for the preven-tion of corruption, although there is no specific anticorruption poli-cy. The military is found to re-ceive strong public trust. Despite the defence budget being pub-lished in the White Books, details are general, and whether com-plete information is given to the legislature could not be con-firmed. That said, the budget and defence income are evidently well-scrutinised, with sound ex-ternal audit. Strong and objective selection criteria within the intelli-gence services have been recog-nised; only at the higher levels are there concerns over potential politicisation.

In relation to finance cor-ruption risk, there are no military owned businesses and no off-budget ex-penditure. On the latter, all accounts must be in sub-heading 14 of the General Budget. There is clear evidence of scrutiny of financial aspects of the security sector. Mean-while, there are formalised procedures and boards of control for asset dispos-als, although transparency is not assessed to be optimal. Cases in the past of unauthorised private enterprise by personnel, are sought to be omitted through the Code of Con-duct, an enactment con-cerning additional illegal occupations, and other items.

In personnel, controls are in place: a publicly availa-ble and comprehensive Code of Conduct, and robust payment systems within which the chain of command and chain of payments are separated. However, provisions for facilitation of whistle-blowing are weak. Con-scription-related bribery, though not specifically mentioned in legislation, is recognised to be well con-trolled by existing rules. A lack of clarity is recog-nised in the management of staff in sensitive posi-tions and recruitment pro-cedures

Regarding operations risk, although there is a lack of specific military doctrine covering corrup-tion in operations, there is awareness of it as an operational issue but no evidence of anticorruption training for commanders. There is no Private Mili-tary Contractor (PMC) use by the armed forces.

General procurement legislation and specific legislation for de-fence and security exists and the procurement cycle is publicly disclosed - although it is recog-nised this is not done in a particu-larly accessible way. With regard to offsets contracts, general con-trols are in place, but with no explicit recognition of corruption risk. The Law concerning the Neutrality of Austria and the Kriegsmaterialgesetz (Arms Act) are instrumental in preventing political influence in procurement. Transparency is lacking in the disclosure of purchases, and in the use of a systematic procure-ment strategy or plan. Controls over agents and subcontractors are recognised to be insufficient.

Bulgaria C Pertaining to political corruption risk, the country has active and effective means of legislative scrutiny and parliamentary over-sight of defence policy and relat-ed issues.

In terms of finance risk, there are low levels of spending on secret items, and the relevant legisla-tive committee is provided with information related to secret item expenditure.

In personnel, meanwhile, the Bulgarian leadership promulgates a strong anti-corruption message, and there is transparency con-cerning personnel num-bers and pay rates.

In terms of operations, there is little evidence of effectiveness in anticor-ruption training for com-manders,

Defence procurement is partly based on a national strategy, and procurement requirements are largely based on identified re-quirements. Integrity Pacts are required for major procurements.


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Band a)



Bulgaria (cont.)

There is engagement of civil so-ciety organisations (CSOs) with defence and security institutions as well as encouraging dialogue on relevant issues between the Ministry of Defence (MOD) and the public. Bulgaria has ratified and complies with a spread of international anti-corruption in-struments, and it has a transpar-ent and detailed defence budget in which all sources of income are published. While defence and security institutions were found to have financial and controlling interests in businesses related to natural resource exploitation of the country, they are subject to extensive public and parliamen-tary scrutiny. There is public trust on the defence establishments' capacity to tackle corruption but in practice authorities do not ad-dress this sufficiently. Parliamen-tary oversight of intelligence ser-vices‘ administration, policies and budget is in place, although the appointment of senior intelligence officials is considered to be politi-cally influenced.

However, transparency concerning the operations and scrutiny of military-run companies is weak, and its audit details are con-sidered ‗classified‘, thus not publicly available. There is little evidence of law enforcement sur-rounding unauthorised private enterprise in mili-tary institutions, of which there is believed to be a high frequency.

A Code of Conduct for the military comprehensively covers bribery, hospitality, gifts, and conflict of inter-est, with evidence of disci-plinary hearings related to acts of corruption; the results of which are usual-ly not public, however. The strong mechanisms ena-bling whistle-blowing (which includes the func-tionality for anyone to whistle-blow online) have not, it is understood, yet been translated into wide-spread practice. The sys-tem of appointments and promotion of personnel lacks transparency and is judged to be subject to political influence.

and assessments of cor-ruption risk monitoring by Bulgarian forces in thea-tre, a finding corroborated by the NATO integrity assessment.

While defence procurement is in principle conducted as open competition, there are several single-sourced purchases. The transparency of the procurement process is limited, and the effec-tiveness of the implementation of anticorruption controls uncertain, with many MOD deals under investigation. There is little indica-tion that procurement decisions are based on the political influ-ence of seller countries, rather than on strategic and operational requirements.

Croatia C Regarding political risk, the coun-try‘s parliament debates a yearly report by the government on de-fence, and the parliamentary Defence Committee is generally transparent and can affect par-liamentary decisions on defence – though it cannot scrutinise the Ministry of Defence (MOD).

In financial corruption risk, the Defence Inspectorate controls asset disposals but has discretionary powers. There is little financial transparency on the secret services and parliament receives lim-ited information on sensi-tive items.

In terms of personnel risk, the Law on Service in Armed Forces penalises corruption but its effec-tiveness has been uncer-tain. Examples of prosecu-tion are not forthcoming, and there is no provision for whistleblowing.

In operations corruption risk, there is not yet anti-corruption provision in military doctrine, but the new Strategic Defence Review does contain a paragraph relating to anti-corruption.

On the procurement front, the Public Procurement Act and the attendant defence and security regulation cover purchasing by the MOD but there are quite clear exceptions to the legislation, such as purchases for the intelligence system. Transparency around procurement is limited,


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Band a)



Croatia (cont.)

Basic defence strategy docu-ments are publicly debated but whether the feedback is pro-cessed properly is uncertain. The Chief Army Inspectorate and the Criminal Military Police exist to counter corruption though their degree of independence is also uncertain. There appears to be no links between the military and natural resource exploitation, nor to organised crime. However, the disclosed defence budget is not detailed and committee scrutiny of the budget is recognised to be undermined by lack of time. Sources of the budget other than from central allocation are pub-lished but not scrutinised.

There is no evidence of off-budget expenditure, though there are reported to be modest contingency funds that are rarely used. Lastly, there are some MOD-owned businesses, for example the ‗Alan Agency‘ which trades equipment, though details on the operations of such firms are not transparent and standards of scrutiny are uncertain.

There are publicly dis-closed personnel numbers and payment systems, and there is a lack of evi-dence to suggest that chains of command and chains of payment are not separated, nor that ghost soldiers do not exist. Con-sistent with a theme of considerable uncertainty over personnel issues, there is little sign of objec-tivity of promotions, and though the Penal Code covers facilitation pay-ments, certainty over its application is again lack-ing.

There is selective training in anticorruption topics for deployed troops, but there is no evidence of opera-tional monitoring role for Croatian forces even when they are part of a bigger, international, op-erational contingent.

and it is indicated that purchases are unnecessarily declared ‗se-cret‘ as this makes the process for the MOD easier. Suppliers do not appear to be required to have compliance programmes, nor are there checks on agents or sub-contractors. Competitiveness is limited: less than 10% of the val-ue of purchases is made as a result of open competition, ad hoc tender boards are recognised to be used, and there are indications of clear collusion risk. It is also recognised that procurement is often decided in advance and that this is common knowledge, dis-couraging complaints about mal-practice in procurement. Finally, in offsets contracts there is little transparency and competition, and little confidence in processes of due diligence.

Cyprus D+ Cyprus is placed in Band D. The ‗Cyprus dispute‘ is a factor con-tributing to elements of confiden-tiality that cut across many de-fence issues. In terms of political corruption risk, while there is an effective and independent Par-liamentary Defence Committee (PDC) to exercise oversight over the Ministry of Defence (MOD), the defence policy itself is not publicly known. Public trust in the integrity of the defence and secu-rity establishments, and particu-larly the intelligence services, is found to be low.

In finance risk, Cyprus is found to have full legisla-tive scrutiny of spending on secret items, and there is no evidence of off-budget military expendi-ture. The procedure gov-erning classification of information, though not legally regulated, is indi-cated not to have resulted in undue influence. There is no evidence that de-fence and security per-sonnel own any commer-cial businesses.

Regarding personnel risk, there is no evidence of commitment to anti-corruption measures by high-ranking defence offi-cials, whistleblowing is not encouraged, and the number, positions and salaries of civilian and military personnel are not publicly released.

In terms of operations risk, there is no specific military doctrine to ad-dress corruption as a strategic issue during operations, nor is there any known anti-corruption training of commanders. There are no guidelines relating to corruption risks in contracting while on deployed operations or on peacekeeping missions.

In procurement, broad legislation regarding purchases exists, but it is recognised to be often by-passed and there is only highly abbreviated public information on the procurement cycle process. There is a policy to disclose de-fence purchases (barring secret items) to the public, and these receive considerable attention from the media. All defence pro-curement is indicated to be sys-tematically based on identified requirements and is mostly con-ducted as an open competition.


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Band a)



Cyprus (cont.)

The defence budget is available to the public in a limited way, having been classified as a state secret in the past. Defence insti-tutions are not provided with any controlling or financial interests in Cyprus‘s natural resource exploi-tation by statutory or constitution-al means. Although there is no evidence of penetration of organ-ised crime into the services, whether the government has the ability to deal with such a threat is uncertain. However, Cyprus has a good record of signing and ratify-ing relevant international anti-corruption instruments and a generally strong and transparent procedure for acquisition planning is recognised to exist.

Promotions of personnel are known to be less than meritocratic and there is strong evidence that brib-ery for soliciting preferred postings in conscription is widely practiced. There are few examples of pros-ecutions of corrupt per-sonnel in the media. Nev-ertheless, the system of payment is seen as, well-established, and routine.

While no publicly available re-quirements beyond company law are imposed on bidding defence companies, formal mechanisms exist for firms to complain about perceived malpractice in pro-curement.

Czech Republic

C In relation to political risk, the country‘s parliament has formal rights to scrutinise defence policy and the security committee is active, though its impact is re-ported to be uncertain. Some policy documents in the sector cover transparency and anti-corruption, and there are institu-tions with that remit, but there is little information on implementa-tion or effectiveness. There is a defined acquisition process and the budget and income sources are generally publicly available, but there is evidence of potential shortcomings in transparency.

In terms of finance risk, recent reforms have aimed to improve prose-cutions and oversight of asset disposals. Budget information is well dis-closed, although the non-government researchers‘ efforts to find information on secret spending were unsuccessful. Off-budget expenditure does not appear to exist – but this finding is based on a lack of contrary evidence.

In the personnel front, payments are made in a timely fashion, the pay system is separated from chains of command, and there is no evidence of ghost soldiers. Although no substantive whistle-blowing provision could be found, the government is hoping to reform this through a recently ap-proved Act. The 2013 strategy to modernise appointments and promo-tions aims to stem a histo-ry of patronage.

In operations, there is no formal doctrine recognis-ing corruption as a strate-gic issue, but it is under-stood to be a governance issue in internal regula-tions. There is a lack of provision for operational monitoring of corruption. Although there is some training, whether it touch-es on operational issues is uncertain.

Regarding procurement risk, a New Procurement Act was adopted in early 2012, which means it is too early to assess its impact. Also, reform over over-sight in the area is imminent, including a new Office for Acquisi-tions, to replace the current sys-tems. There is a legacy of single-sourcing, but improvements have been evident. Nevertheless, the assessment identified a lack of enforcement of anti-collusion mechanisms. Transparency gen-erally reflects a mixed picture, with transparent non-strategic procurement, but less openness over sensitive purchases, and too little attention paid to suppliers‘ compliance programmes.


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Band a)



Czech Republic (cont.)

Defence institutions have no in-terests in natural resource exploi-tation, though there are consider-able concerns over penetration of organised crime into the sector, which the government is looking to address. Lastly, there is trans-parent information on the Czech intelligence agencies, though scandals have cast the controls into question.

There are informal mech-anisms available for in-formation classification, though there is insufficient evidence of enforcement and oversight. There is also little sign of transpar-ency and oversight of military-owned business-es, which relate to military equipment renovation.

Facilitation payments and gifts are recognised to be an on-going concern, alt-hough the government is aware of the problem and prohibitions are in place. There is uncertainty over the scope and implemen-tation of any Code of Con-duct for the military.

On offsets, the Ministry of De-fence (MOD) indicates strong controls and a long-term aim of greater transparency, but with little focus on corruption risk.

France C Regarding political risk, the as-sessment shows an active and well-resourced defence commit-tee, a published defence policy subject to parliamentary debate, strong levels of transparency with regard to the defence budget and to income streams, and objective selection processes in the intelli-gence services. However, it was found that corruption lacks recog-nition as a true problem within the defence establishment, so an anti-corruption policy is not evi-dent; neither are anti-corruption civil society organisations (CSOs) recognised to be welcomed or acknowledged by the govern-ment, even if public debate on wider defence issues is wide-spread.

In finance, only 0.5% of the defence budget is secret, and there is very limited evidence of off-budget military expendi-ture, unauthorised private enterprise by military per-sonnel, or military owner-ship of commercial busi-nesses.

In personnel, France has strong and reliable pay-ment and recruitment processes. There is no Code of Conduct for de-fence personnel, there is a lack of evidence of prose-cution activity, and there is found to be limited en-couragement of whistle-blowing. In regard to the latter point, there is, none-theless, potential for re-form prompted by the work and scope of the Commis-sion for the Prevention of Conflicts of Interest.

Regarding operations risk, there is a lack of military doctrine address-ing corruption risk and no evidence of operational anticorruption training.

In procurement, France exhibits some strong controls: the Public Procurement Code is found to tightly regulate procurement needs and is subject to strong oversight. There is open competi-tion for contracts, collusion is strongly disallowed, and legal remedies are in place for compa-nies to complain about malprac-tice in procurement. Yet there is little evidence of anti-corruption policies requirements for compa-nies, limited transparency in fi-nancing packages, and the con-trols pertaining to sub-contractors and intermediaries are believed to be weak.

Germany A Germany is one of only two coun-tries placed in Band A (Australia is the other one). The country has strong controls across all risk areas except operations.

In terms of finance corrup-tion risk, the assessment shows robust systems are in place to ensure over-sight.

In the area of personnel corruption risk, there are strong anti-corruption systems.

In relation to operations corruption risk, the coun-try does not have a mili-tary doctrine that specifi-cally targets corruption as a strategic issue on oper-ations.

Regarding procurement, The Federal Office of Defence Tech-nology and Procurement, located within the Federal Defence Ad-ministration, is responsible for military procurement procedures.


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Band a)



Germany (cont.)

In terms of political corruption risk, a defence committee is in place to ensure effective and independent legislative scrutiny of defence policy. This committee also possesses the right to con-vene as a committee of inquiry. The defence budget is publicly available and all sources of de-fence income are published in ‗Einzelplan 14‘. Both internal and external audits are carried out; internally by the Budget and Con-trolling Division, and externally by the Federal Audit Court (FAC). On the basis of its audits, the FAC provides recommendations to the Parliament and its reports are available online. However, there is a lack of openness to-wards civil society organisations‘ (CSOs) involvement in govern-ment anti-corruption initiatives. Furthermore, evidence indicates that the public still do not believe that defence and security institu-tions are doing sufficient work to counter corruption across this sector.

Information about the disposal of assets is pub-licly available and the FAC provides external scrutiny of these disposals. Less than 1% of defence ex-penditure is spent on secret items and this must be reviewed by the FAC, although findings are only shared with a few mem-bers of the legislature. All spending must be record-ed in official records and there is no evidence of off-budget expenditure occur-ring. Systems are in place to determine the condi-tions under which infor-mation can be classified. Military-owned businesses are in existence, though these are found to be subject to rigorous audit-ing.

The extent to which legis-lation is in place to reduce corruption risk demon-strates strong commitment to anti-corruption on the part of leaders. A directive was issued in 2004 to prevent corruption in pub-lic administration and this was recently followed up by recommendations pub-lished by the government in 2012. These recom-mendations show that whistle-blowing is encour-aged and that whistle-blowers will be protected. They also address the time in post and oversight of personnel in sensitive positions. Payroll systems are recognised to be effec-tively organised and chains of command are kept separate from chains of payment.

Though there is little evi-dence of trained subsidi-sionals being deployed to monitor corruption risk in the field, the government states that ‗Points of Con-tact for the Prevention of Corruption‘ are deployed to address this need.

Defence and security procure-ment is found to be subject to rigorous regulation and oversight mechanisms. While most pur-chases are sourced via open competition, some exceptions to this are permitted due to a stated need for secrecy on some occa-sions. The Federal Financial Plan 2011-2015 includes information about actual and planned defence purchases, though a full list of future planned purchases is not available. Companies bidding for work for the Ministry of Defence must comply with requirements laid out by the Bundesamt für Wehrtechnik und Beschaffung (BWB). The national security strategy, from which procurement decisions are derived, is detailed in the Weissbuch, last published in 2006. Offsets contracts are not supported by the German Ministry of Defence which officially states that offsets are damaging to competition.

Greece C Political corruption risk is one of the greater risk areas. On the positive side, there is a parlia-ment with formal powers to scru-tinise defence policy and an iden-tifiable parliamentary defence committee enabled to exercise parliamentary oversight and legis-lative work.

Financial corruption vul-nerability is high, with, there is little transparency of asset disposal controls as well as very limited oversight found of secret items expenditure.

In personnel corruption risk, there is strong public commitment to anticorrup-tion by the Defence Minis-ter and transparency with relation to the number of civilian and military per-sonnel, as well as their pay-rates and allowances.

On the operations front, corruption is specifically addressed as a strategic issue in operations in military doctrine and there is deployment of trained professionals to monitor corruption risk in mis-sions.

Regarding procurement risk, formal rules are found to be in place but are often recognised to be ineffective in practice due to patron-client relationships in the sector. The EU Defence and Security Procurement Directive 2009/81/EC was transposed into national law in 2011, creating a framework for regulation and oversight of defence and security procurement,


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Greece (cont.)

Formal structures which enable consultation and regular public debate on defence policy include think-tanks, researchers, and policy-makers. The Ministry of Defence (MOD) is found not to have controlling or financial inter-ests related to Greece‘s natural resource subsidisation, and arms export control decisions are in line with international rules, re-ported to and scrutinised by the European Commission. However, limited detail is available with regard to the defence budget and extra-budgetary sources of de-fence income, and the former is rarely debated in parliament. Evidence indicates some penetra-tion of organised crime within military personnel and while insti-tutions are in place to counter such activities, there is little proof of their effectiveness.

The percentage of de-fence and security ex-penditure allocated to secret spending is not publicly available either, and information on the same is not included in the budget for parliamen-tary scrutiny and may not be provided even when the parliament enquires about details of specific cases. The Greek Army owns several businesses which are believed to be scrutinised and audited to a degree, although infor-mation regarding this is not public. However, it is recognised there is effi-cient controls over off-budget expenditure, and private enterprise by per-sonnel is illegal and penal-ised.

There is no evidence of ghost soldiers, and a well-established, routine sys-tem of payments for per-sonnel. Institutionalised systems for appointments and promotions are ob-served, although high-ranking positions are rec-ognised to be vulnerable to nepotism and political influence. While legal provisions exist to punish personnel involved in cor-rupt activities, loopholes are indicated to exist and are exploited by many to escape punishment. Brib-ery is legally penalised although bribes for exemp-tion from compulsory con-scription and for preferred postings in voluntary con-scription are recognised to be common.

There is evidence that military personnel select-ed for international mis-sions are provided with training which addresses corruption issues in the field. However, there is extensive use of private military contractors, and a lack of corresponding scrutiny of their activities.

although it is early to determine its efficacy. There is some trans-parency with relation to the pro-curement process cycle and some actual and planned pur-chases. In practice, defence con-tracts have usually been single-sourced, although with the new legislation, procurement is in principle conducted as open competition. Strong sanctions are in place to punish corrupt suppli-ers, though there is no published evidence of their application in practice. Companies are required to have anti-corruption standards and processes in place in order to bid, and to ensure their subsidiar-ies and subcontractors do the same. The use of agents or in-termediaries in the procurement process is outlawed. Finally, off-set contracts are being phased out following a recent change in the law in 2011.

Hungary C In relation to political corruption risk, the Parliament‘s Defence and Internal Security Committee has formal powers of scrutiny of defence policy, though this was found to occur post facto. The new defence policy has been subject to public consultation, and debate on the sector has involved academics and think-tanks. There has been some systematic anti-corruption assessment by the State Audit Office (SAO),

In terms of finance risk, the SAO audits asset disposals and they are indicated to be transpar-ent as per legislation. There is no evidence of off-budget expenditure either. Parliamentary committees approve se-cret procurements, though there appears to be no separate audit of secret items.

In the area of personnel, there is considerable anti-corruption commitment in speeches and there is public evidence of action having been taken in White Books. Personnel numbers and pay rates are transparent and pay-ment systems are indicat-ed to be generally robust and not compromised.

In operations, a new mili-tary strategy is scheduled to be brought out immi-nently, but the current one does not address corrup-tion as an operational issue. There are opera-tional civil-military co-operation handbooks that make reference to corrup-tion, and some anticorrup-tion monitoring is indicat-ed to occur.

Regarding procurement corrup-tion risk, formal legislation exists but contains risk of exclusions, though oversight mechanisms are indicated to be comprehensive (involving four bodies, potentially, as per general procurement prac-tice), and there is transparency surrounding purchasing. Probity is found to be aided by tender boards working closely with legal, economic, and financial experts.


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Hungary (cont.)

and the budget is fairly detailed, is subject to committee scrutiny, and is largely transparent – though, not in an easily digestible format. Arms controls are trans-parent and align with international protocols, though scrutiny is found to be limited. The assess-ment shows lack of effectiveness in the scrutiny of the intelligence services by the National Security Council, but there are formal procedures in place.

Finally, the MOD has business interests in vari-ous industries, including communications, arms, and cartography. A White Book was recently pub-lished covering controls of at least some of these firms.

Although there are objec-tive de juro recruitment systems, it is less certain that in practice such sys-tems are immune from politicisation. There ap-pears to be a lack of whis-tleblowing policy and anti-corruption training. The Code of Conduct is found to lack clarity and cover-age, and evidence of ef-fectiveness is limited.

However, when considering po-tential bidders, the government does not specifically mention corruption as a barring factor. Poor controls in offsets have been linked to scandals and there is little transparency surrounding these contracts.

Italy C In relation to political corruption risk, the Italian parliament scruti-nises issues of defence strategy and has budgetary powers but its sphere of influence is recognised to be limited. The Defence Com-mission has no binding powers. The defence policy is publicly available but debate occurs only occasionally. There are signs of a lack of ratification of various cor-ruption instruments and inade-quate compliance with others. A 3-year plan for transparency and integrity in the Ministry of Defence (MOD) 2011-2013 exists, but there is no systematic evaluation of corruption risks in place. The MOD budget is largely transpar-ent, with scrutiny of expenditure and the intelligence services. Appointments at the higher levels of the intelligence services are, however, understood to be sub-ject to politicisation.

In the field of finance, the assessment reveals an inadequate degree of scrutiny of expenditure on secret items and the audit-ing of security accounts. Transparency surrounding off-budget expenditure and the classification of information is lacking. The MOD owns the company Difesa Servizi S.P.A., a new development of which details are limited at this stage. Nevertheless, asset sales are controlled by the Supreme Audit Institution, reported to be independ-ent and effective.

In terms of personnel risk, payroll systems are largely robust, with separated chains of command and chains of payment. Fur-thermore, there is evi-dence of anti-corruption training for MOD staff having very recently taken place, but whether this will be repeated is uncertain. The Criminal Code ap-plies, effectively, to corrupt personnel, yet the effec-tiveness of enforcement is unclear. The Code of Conduct on the MOD website is generic and not sector-specific, and results of investigations are not transparent. Whistle-blowing regulations and protections are judged ineffective.

In terms of operations corruption risk, there is no clear anticorruption remit in military doctrine, nor evidence of operational anticorruption training, though the problem of corruption in the field is recognised. Indeed, there is Italian participation in anti-corruption monitoring through international or-ganisation initiatives. The country also has anti-mercenary laws.

In the field of procurement risk, there has been a new legislative decree to update defence and security procurement in line with EC Directive 2009/81/EC. The procurement cycle is largely dis-closed and the Supreme Audit Institution conducts oversight. There is a yearly national defence and security strategy in place to guide procurement and quantifi-cation techniques are used. In other areas there is evidence of gaps. Previously corrupt firms are barred from bids but compliance programmes are not required. Over half of purchases are sole-sourced and collision is not spe-cifically addressed in the sector. Defence company Finmeccanica manages the majority of capabili-ties, in whom the state has a golden share. Finally, agents in procurement are found to be controlled only in a limited way.


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Italy (cont.)

There are no policing functions within the sector to investigate corruption and organised crime, though the Carabinieri, the mili-tary police, carry out anti-mafia activities.

Latvia C In relation to political corruption risk, there is formal scrutiny of defence policy by the Standing Committee on Defence, Interior Affairs, and Anti-Corruption. The Anti-Corruption Bureau (KNAB) has a non-governmental organi-sation (NGO) consultative coun-cil. There is audit of expenditure by the Auditor General‘s Office, whose efficacy is recognised to be enabled by their possession of appropriate clearances and ac-cess. However, examples of in-sufficient budget oversight are identified, including the disputed purchase of a mine ship identified in the 2010 Auditor‘s Report. Furthermore, though the public is recognised to trust the army, there is evidence of less popular confidence in the ability of the government to address corruption more generally.

Regarding finance corrup-tion risk, the State Audit Office conducts asset disposal scrutiny and information on such dis-posals is available on request, even if it is not volunteered proactively. The level of secret ex-penditure is not publicly disclosed. However, in-formation on the same is available to the legislature and there are no off-budget items. There is no evidence of unauthorised private enterprise or of significant military in-volvement in commerce.

In terms of personnel cor-ruption risk, it is indicated that corruption is not toler-ated by the government. However the assessment identifies insufficient laws on whistle-blowing protec-tion (a new concept in Latvia) and publication of prosecutions. Personnel numbers are well known, and strong payment sys-tems appear to be in place. There is a Code of Ethics for the Ministry of Defence (MOD), and there were efforts to instil ethical behaviours at the grass-roots of the MOD in 2009/2010, though it is uncertain if this has been pursued subsequently. Whether military personnel appointment and promo-tions are fully meritocratic is also unclear.

Regarding operations risk, there is no Private Military Contractors (PMCs). Though there is awareness of ethics is-sues in operations, this is not formalised into military doctrine dealing with cor-ruption. There is a lack of evidence of operational anti-corruption training, monitoring, and guide-lines. The government makes the point that there are a few operational units deployed, and that they obey to anticorrup-tion controls by other partner nations.

In procurement risk, the coverage of the new Public Procurement Law is recognised to be exten-sive, though there are notable exceptions to its remit. Transpar-ency and oversight in the pro-curement process is indicated to be of mixed quality. However, Requirements Documents guide procurement, and only 4% of procurement in 2011 was single-source. Controls are in place to address unfair tendering and collusion, and the Procurement Monitoring Bureau is active in considering complaints by com-panies.

Poland C In terms of political risk, the as-sessment indicates democratic control of the armed forces, transparency of the defence budget and a parliamentary Na-tional Defence Committee em-powered to scrutinise defence policy.

In terms of financial cor-ruption risk, the Military Property Agency is re-sponsible for undertaking asset disposals and there are mechanisms for scru-tiny.

Regarding personnel cor-ruption risk, the Depart-ment for Combating Or-ganised Crime of Military Prosecutor‘s Office is recognised to have been effective in punishing per-sonnel for involvement

Regarding operations risk, there is no evidence corruption is addressed as a strategic issue in any documents forming the general framework for operations,

Pertaining procurement risk, The Bureau of Anticorruption Proce-dures within the MOD supervises public procurement and has in the past suspended suspect pro-curement contracts.


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Poland (cont.)

Relevant stakeholders are recog-nised to be actively involved in debates related to defence, and there are institutionalised consul-tations with civil society. Poland has signed international anti-corruption instruments including UNCAC and the OECD conven-tion with evidence of compliance. A Bureau of Anti-Corruption Pro-cedures within the Ministry of Defence (MOD) came into exist-ence in 2006 which, inter alia, regularly monitors corruption risk. The most prominent natural re-sources in Poland are coal and gas, and there is no evidence that defence institutions have any controlling or financial interests in related businesses. However, there is evidence of organised crime in the sector, although this has been recognised by the gov-ernment and successfully com-batted in several instances. There is evidence of the potential for politicisation of appointments of top officials in the intelligence services.

While the percentage of defence and security ex-penditure allocated to secret items is not publicly available, full information is provided to the Parlia-ment‘s Committee for Security Services. Audit reports of the same are not produced, however, and thus are not subject to parliamentary debate. There is no legal provision allowing off-budget ex-penditure or any evidence that it exists in practice. While the MOD does not own any commercial busi-nesses, it does exercise property rights on behalf of the State Treasury over commercial businesses controlled by the state. These are obliged to pro-vide annual financial re-porting, which in turn is verified by an independ-ent, statutory auditor and published.

in corrupt activities, which is indicated to be a marked difference from the past. There is no evi-dence of ghost soldiers, and chains of command are separate from that of payment. A comprehen-sive Code of Conduct with strict regulations is in place, usually with public reports of prosecutions relating to breaches of the Code. Facilitation pay-ments are strictly illegal although there is evidence of potential shortcomings in implementation. There is no formal legislation to facilitate whistle-blowing and the public availability of details of the numbers of civil and military per-sonnel is not entire. Nev-ertheless, pay-rates and allowances are made public. Moreover, there are signs of political ele-ments influencing ap-pointments of top military personnel, and promotions are marred by unclear criteria.

nor is there evidence of anti-corruption training for deployed commanders. However, Private Military Companies (PMCs) are assessed to be well-regulated when employed by defence and security establishments within the country, accountable to the Police Commander in Chief.

Yet there is no evidence of formal requirements for bidding compa-nies to have compliance pro-grammes or ethical conduct guidelines in place, or for main contractors to ensure subsidiaries or subcontractors adopt anti-corruption programmes. Further-more, a substantial amount of defence procurement is recog-nised to be non-competitive. Nevertheless, there is a compre-hensive system of supervision of contract fulfilment and training for procurement staff.

Slovak Republic

C In political risk, there is oversight of the defence sector by legisla-tive bodies that include a general parliamentary committee and two special committees, and the sec-tor is not exempt from anti-corruption law.

With regards to finance risk, scrutiny of asset disposals is the purview of two parliamentary commit-tees and the SAO, yet the availability of reports is limited.

In personnel risk, investi-gations of corruption among personnel are recognised to incur into delays and there is no culture of whistleblowing.

In terms of operations risk, there is a lack of evidence of military doc-trine specifically address-ing corruption in opera-tions, despite awareness of corruption as a security issue.

Regarding procurement, there is a legacy of a lack of transparency which has not been resolved. There is evidence of little ethical standards required of suppliers, though those guilty of corruption are prohibited from bidding for contracts.


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Slovak Republic (cont.)

There is a publicly available de-fence policy and evidence of some public discussion of it. It is adjudged that opening debate to remits less comfortable to the Ministry of Defence (MOD), and to further involve civil society organisations (CSOs), are poten-tial reforms. There is indication of gaps in the Supreme Audit Of-fice‘s (SAO) scrutiny of defence income and spending, and there is no evidence of internal auditing of expenditure. Nevertheless, there is no evidence of organised crime linked to the military and the Security Strategy and Model 2015 specifically identifies this risk. Slovakia is a signatory to many arms control protocols, and the Ministry of Economy releases a yearly report on the arms trade.

The budget is not recog-nised to contain any se-cret items, nor off-budget expenditure. There are commercial businesses owned by the MOD, but they only account for 1.5% of the budget.

Transparency surrounding numbers of personnel, payroll, promotions, and appointments is inclined to be weak. It is also difficult to talk of a clear separa-tion between chains of command and chains of payment due to intercon-nections between institu-tions across which chains of command are diffused. Finally, there is evidence of prosecutions and public outcomes of cases of corruption in the military; less certain is whether this is true of the MOD as well.

Competitive tendering is recog-nised to be generally observed, but a lack of transparency and little evidence surrounding the outcomes of complaints made by suppliers who have reported per-ceived malpractice reduces confi-dence. Moreover, controls on agents are opaque.

Spain C In terms of political risk, there is uncertainty regarding the legisla-tive scrutiny of defence policy and the quality of oversight by the parliamentary defence committee. There is limited public debate on defence issues. However, Spain has signed up to major interna-tional anti-corruption instruments, with good evidence of compliance and the defence budget is largely transparent. There is no evidence of organised crime penetration in the Ministry of Defence (MOD) and anti-corruption policing exists across the public sector.

In the area of finance risk, less than 1% of the de-fence budget is dedicated to secret item expenditure. The legislature is provided with information on secret budgets, and there is evidence that related audit and parliamentary scrutiny is undertaken. Controls are in place concerning asset disposals, military institutions do not own any commercial businesses, and there is no evidence of any personnel being engaged in unauthorised private enterprise.

Regarding operations risk, while there is no specific military doctrine, several workshops on addressing corruption as a strategic issue in operations are held for high-ranking mili-tary officials being de-ployed, with a focus on operations in Afghanistan.

Regarding operations risk, while there is no specific military doctrine, several workshops on addressing corruption as a strategic issue in opera-tions are held for high-ranking military officials being deployed, with a focus on operations in Afghanistan.

On the procurement front, there are legislation and oversight mechanisms in place. Defence procurement, in line with Europe-an legislation, is indicated to be conducted as open competition and tender boards are judged well-regulated. Bidding compa-nies are subject to requirements by the MOD relating to ‗reputation and business sustainability‘ and legislation penalises collusion between bidders, and regulates the use of agents and intermedi-aries. There is little transparency, however, regarding transparency of offset contracts.


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Spain (cont.)

Additionally, Spain is signatory to international arms control proto-cols and has had some success with increasing transparency with relation to controls over arms exports.

Sweden B In terms of political corruption risk, there is evidence of robust and independent legislative scru-tiny of defence and security poli-cy. Sweden has signed and rati-fied relevant international anti-corruption instruments. The de-fence budget is transparent and reviewed by the Auditor General. There is no evidence of the armed forces having business interests related to natural re-source exploitation. There is evi-dence of a low level of engage-ment between national defence and security establishments and civil society organisations. Public confidence in the Armed Forces‘ ability to combat corruption, influ-enced presumably by scandals in the recent past, is also indicated to be low.

With regard to finance risk, the National Audit Office does not scrutinise asset disposal sales car-ried out by the defence establishment; it focuses instead on the materiel supply process which has been greatly criticised. The percentage of de-fence and security ex-penditure dedicated to secret items and the intel-ligence services is not publicly available. Never-theless, there is no evi-dence of off-budget mili-tary expenditure or mili-tary-owned businesses.

In the field of personnel, effective measures having taken part in corruption or bribery are in place, and there is evidence of their enforcement. The ap-pointment and promotion system is understood to be robust. While chains of command and of payment are separate, the current payment system has oc-casionally delivered de-layed and incorrect pay-ments. There is no evi-dence of effective whistle-blowing legislation in place, although there is on-going lobbying activity in this regard.

In operations, while cor-ruption is not explicitly referred to as a strategic issue in operations in Sweden‘s military doc-trine, there is comprehen-sive anti-corruption train-ing for commanders, and legal advisors qualified to report back on corruption risks are deployed in missions. There is, how-ever, a lack of transpar-ency with relation to the activities of Private Mili-tary Contractors (PMCs) operating in Sweden, although laws in place are capable of punishing them for wrongdoing.

Regarding procurement, there are legislation and effective oversight mechanisms in place. Defence and security purchases are based on carefully identified and quanti-fied requirements, tender boards are audited and collusion is strongly regulated. Companies violating procurement laws are given sanctions and risk being banned. Companies can com-plain to the Parliamentary Om-budsman regarding perceived malpractice and they are recog-nised to be well protected against discrimination in future procure-ments. However, the Swedish Defence Materiel Administration (FMV) reports that a majority of defence contracts are purchased by single-sourcing. Sweden sub-scribes to the European Defence Agency (EDA) Code of Conduct on offsets, though no transparen-cy in relation to offset contracts is observed.

United Kingdom

B With regard to political integrity, the UK is characterised by effec-tive and independent mecha-nisms of scrutiny of defence poli-cy, an active defence committee, and frequent public debates on defence.

In terms of financial de-fence corruption risk, there are mechanisms in place to ensure strong control and oversight of asset disposals.

Regarding the field of personnel risk, the num-bers of military and civilian personnel, along with corresponding pay rates and allowances,

In relation to operations corruption risk, members of the UK military receive anti-corruption training through organisations like NATO.

In the sphere of defence pro-curement corruption risk, relevant legislation is in place through UK and EU law. Single-source pro-curement is estimated to account for, on average, half of all de-fence procurement in the past 3 years.


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United Kingdom

Information on the defence policy and the budget is easily available. There is evidence of transparent internal audit procedures and external auditing of military ex-penditure. Nonetheless, the ab-sence of a specific anti-corruption policy for the Ministry of Defence (MOD) and institutions within it to build integrity and counter corrup-tion increase the risk for impropri-ety. The UK‘s insufficient re-sponse to defence-related scan-dals, such as the Al-Yamamah arms deal with Saudi Arabia, is observed to have reduced the public‘s trust in its defence institu-tions. Further, while the UK ad-heres to international protocols related to arms controls, there is evidence of occasional shortcom-ings in compliance.

Off-budget expenditure is illegal and there is no evidence of its existence. The military is not known to have ownership of commercial enterprises nor is there any indication of unauthorised private ventures by defence and security personnel. How-ever, over 8% of the de-fence budget is allocated to spending on secret items and programmes, although evidence implies effective oversight is exer-cised by the Intelligence and Security Committee (ISC), which is provided with extensive details on such expenditure.

are openly published, and systems of payment, ap-pointment, and promotion are judged well-established. Policies re-garding whistle-blowing differ for civilian and mili-tary personnel, with seri-ous weaknesses having been identified in the pro-tection provided to military whistle-blowers. The Ar-my‘s Code of Conduct, while referring to integrity, does not adequately cover or provide guidance re-garding corruption issues.

Troops are aware of cor-ruption as a strategic issue during operations, although there is no spe-cific doctrine on the sub-ject. Private Military Con-tractors (PMCs) are em-ployed to a significant extent in Iraq and Afghan-istan, and are subject to the same criminal law as the military.

However, companies are required by the MOD and by UK civilian law to have formal and publicly declared compliance pro-grammes. Collusion is discour-aged by strong EU and UK legis-lation. Corrupt suppliers can be debarred by the executive and by other legal sanctions. Finally, formal mechanisms are in place to allow companies to complain about perceived malpractice in procurement.

Serbia D+ Regarding political risk, precondi-

tions for effective legislative scru-tiny of defence policy were set in 2010 and as such these powers are yet to be fully and regularly utilised. Some oversight over defence matters is in place through the existing parliamentary committee. Budgets are publicly available, although not in detail and scrutiny of them is rare. While there have been consulta-tions between the Ministry of Defence (MOD) and civil society organisations, there is no organ-ised, regular dialogue between them.

In terms of financial risk, more than 8% of the de-fence and security budget is allocated towards secret items. Annual accounts of the security sector, includ-ing defence and secret programmes, are audited by the State Audit Institu-tion (SAI); however, re-ports of the same are not subject to parliamentary debate. There is little clarity with regard to the legal status of off-budget expenditure and the ex-tent to which they exist in practice.

In terms of personnel cor-ruption risk, there is evi-dence of some public commitment by high-ranking MOD officials to anti-corruption and of a well-established, routine payment system with sep-arated chains of command and payment. There is no evidence of ghost soldiers on the payroll. It is indicat-ed that a well-regulated, transparent system for appointments and promo-tions of personnel in in place.

With respect to corruption risk in operations, Serbian Military Doctrine does not directly refer to corruption as a strategic issue and there is no evidence of anti-corruption training for personnel deployed on operations. There is also no monitoring of corrup-tion risks in the field, nor guidelines on combatting corruption in contracting in operations.

On the procurement front, the assessment finds that legislation is often bypassed in defence and security on the grounds of confi-dentiality relating to national se-curity, which is also reflected in the limited transparency of the procurement cycle process as well as of actual and planned purchases. There is no evidence of compliance programme re-quirements for bidding compa-nies, nor of sanctions for corrupt suppliers.


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Serbia (cont.)

The MOD owns hunting grounds and national parks which are not believed to be subject to scrutiny. There is evidence of occasional links between organised crime and armed forces personnel. However, Serbia‘s security intelli-gence agencies are legally sub-ject to parliamentary scrutiny, although the effectiveness of this is uncertain.

Controls over asset dis-posals are considered ineffective, although the first ever audit of the MOD‘s finances by the SAI in 2011 did include scrutiny of asset dispos-als. The MOD owns shares in, and controls several defence compa-nies. These are subject to limited scrutiny, given that there is yet no internal audit system within the MOD.

Yet mechanisms to facili-tate whistle-blowing and protect whistle-blowers is lacking. Little or no atten-tion is paid to officials in sensitive positions and there is limited transpar-ency regarding the num-ber of civilian and military personnel and their pay-rates and allowances. A Code of Honour for mili-tary and civilian personnel does exist, although there is no evidence of penalties for breaching it.

Norway B Political corruption risk is low,

with strong institutions in place, and high levels of transparency. There are no indications of undue influence or criminal activity. The budget is accessible, as is infor-mation on defence policy issues, and considerable debate across civil society is observed. Although classified items are discussed in an extended (rather than stand-ard) parliamentary committee, parliamentary disclosure is forced if six committee members desire this to be so. Some sophisticated mechanisms are indicated to be in place: where the process of internal audit of expenditure has been found to be insufficient, the criticisms themselves have been made publicly available. Internal audit involves discussion of the findings of external audit by the National Audit Office (NAO).

In finance, there is exten-sive and regular auditing of, and evidence of at-tempts to improve asset disposals. Key parliamen-tary figures in the Foreign and Defence Committee are given details on secret items in the budget, and there is no evidence of off-budget expenditure. One military owned business, Aerospace Industrial Maintenance Norway SF, is in existence, though no reports of problems with military-owned businesses exist, nor does evidence of unauthorised private enterprise. Nevertheless, the percentage of the budget spent on secret items is not disclosed to the public.

In terms of personnel cor-ruption risk, along with evidence of strong com-mitment to anti-corruption by senior leadership, Nor-way has robust payment and conscription systems and the potential for cor-ruption is recognised to be small. The Siemens Scan-dal was found to illustrate encouragement of whistle-blowing, however, there are inadequate systems of punitive law due to few punishments arising from the incident. There is a lack of a systematic ap-proach to processes in-volving staff in particularly sensitive positions, and limited transparency of appointments and pro-motions to the highest levels.

In operations corruption risk, there is limited clarity concerning anticorruption in military doctrine and little certainty on the de-gree of anticorruption activity in terms of opera-tional training, monitoring, and contracting. Nonethe-less, governmental efforts to reduce corruption in operations in Afghanistan are evident, and include aiding the establishment of Integrity Watch there.

On the procurement front, rules for the defence sector specifically address defence corruption, and there is disclosure of the purchas-ing cycle and of purchases them-selves. Objective procurement plans rather than opportunism is indicated to drive purchases, though the NAO has found occa-sional slips. Over 60% of recent procurement was single-sourced. Although training among pro-curement staff was previously recognised to have been inade-quate, improvements have been installed. The assessment shows that offsets are generally well-regulated, but regulation of sub-contractors is insufficient.


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Norway (cont.)

Furthermore, after the intelligence services were found to have car-ried out illegal surveillance, this led to reform.

The government recognis-es the need for improve-ment in both cases.

Turkey D– Regarding political risk, there is no evidence that the national defence policy is publicly availa-ble. Public debates on defence issues are recognised to be re-stricted to foreign and domestic policy-related conflict, and dis-cussion of arms deals and budg-ets is reportedly unobserved. The Turkish Court of Accounts‘ au-thority has recently been intended to extend to cover all military assets, bids and expenditure. Appointment procedures for intel-ligence service personnel are classified, and the services are subject only to adequacy audits, which are not made public. How-ever, the Ministry of Defence (MOD) and armed forces incomes are allocated from the general budget that has no link to natural resource exploitation. While rele-vant international anti-corruption instruments have been signed and ratified, the effectiveness of implementation is gauged to be uncertain.

With regard to financial risk, controls over asset disposals are not trans-parent and the percentage of defence and security expenditure dedicated to secret items in the budget is not released to the public. Parliament is indi-cated to be given only limited information on secret spending. National defence and security insti-tutions own numerous enterprises, subject only to private law regulation, and there is little transpar-ency surrounding their operations and finances. Nevertheless, there is no evidence of unauthorised private enterprise by de-fence or security person-nel.

Controls over personnel corruption risks are rela-tively strong, with effective measures in place to com-bat bribery and corruption among personnel. Alt-hough only few public available examples exist, recent prosecutions of high-ranking officials are considered a break-through in Turkey. Pay-ment systems in place are judged robust and there is no evidence of ghost sol-diers. There is evidence of strong laws against bribery for avoiding conscription and for preferential post-ings, and facilitation pay-ments are illegal. Howev-er, there is no evidence of legislation to facilitate whistle-blowing or whistle-blower protection. Fur-thermore, the recruitment of retired officers by agents or foreign manu-facturers with offices in Turkey is recognised to be a tolerated, though illegal, practice.

In operations, there is no military doctrine address-ing corruption as a strate-gic issue in operations. Commanders are indicat-ed to be given only irregu-lar and informal training on operational corruption issues and it is unclear whether professionals are deployed to monitor cor-ruption issues in the field.

On the procurement front, while there is legislation in place, with by-laws regulating exempt items, the oversight mechanisms lack transparency. As the National Security Policy Document is not public or audited, it is difficult to ascertain whether procurement decisions are in line with Turkey‘s national defence and security policy. While tender boards are subject to regulations, the inde-pendence of their auditing is un-certain. There is no evidence of audit, due diligence or competi-tion regulation for offset contracts. There is also no sign of regula-tions to control the use of agents and intermediaries, who are po-tentially influential in defence procurement decisions.


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Australia A In political corruption risk, parlia-ment is constitutionally empow-ered to legislate in defence and a Joint Standing Committee exer-cises active oversight. There is a transparent defence policy that is rigorously debated in academia and civil society. The Attorney General‘s department and the Audit and Fraud Control Division exercise anti-corruption powers. A ‗two pass‘ decision making is in place with regard to defence ac-quisitions, and spending is sub-ject to rigorous audit. Australia exhibits a detailed, publicly dis-closed budget, extensive arms controls, and the intelligence services are subject to independ-ent review, with supervision un-dertaken by the Strategic and Defence Policy Institute.

In finance corruption risk, while strong controls exist over asset disposals, shortcomings have been identified in the transpar-ency of the disposal pro-cess. There are occasion-al off-budget expendi-tures, but no illicit activity has been linked to their existence and the new Strategic Reform Pro-gramme aims to reduce their occurrence. The military owns no commer-cial enterprises, and scandals involving unau-thorised private ventures by defence personnel are rare. However, the per-centage of the budget spent on secret items is not disclosed, and it is considered to have in-creased since the advent of the ―war on terror.‖

In terms of personnel cor-ruption risk, robust legisla-tion is in place to deal with personnel proven to be corrupt, and Australia is moving forward on whistle-blowing legislation. Num-bers of personnel, pay rates, and appointment systems are transparently disclosed, and strong payment systems are in place. Breaches relating to Code of Conduct are ad-dressed seriously, with investigations often lead-ing to violations being proven and employment termination. The Defence Annual Report discloses prosecutions in defence, and the outcomes of disci-plinary proceedings. Nonetheless, evidence indicates that internal merit-based promotion for senior positions in the Australian Defence Force (ADF) takes place without independent scrutiny. Additionally, no specific legislation is in place with regard to facilitation pay-ments, although consulta-tions have been held to this end.

In operations corruption risk, while corruption is not explicitly addressed as a strategic issue in a military doctrine, pre-deployment training for officers cover related issues in the field. AusAID works towards monitoring and elimination of corrup-tion risks in theatre. Pri-vate Military Contractors (PMCs) are utilised and are subject to the general public service Code of Conduct regulations, rather than more specific mechanisms of scrutiny.

Finally, with regard to procure-ment, there is robust legislation, outlined in the Defence Procure-ment Policy Manual, which also covers high risk areas such as agents. There is strong transpar-ency regarding the procurement cycle and purchases, and a Joint Standing Committee contains oversight power. High standards on firms are set by the Defence Export Control Office and the Defence Materiel Organisation. A Strategy Framework defines requirements based on opera-tional need, though some political influence by the USA is assessed to factor into purchasing deci-sions defended on the grounds that this means the purchase of state-of-the-art capabilities.


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Brazil C Online resources evidence Bra-zil‘s strength in fighting political corruption risk. For example, the Ministry of Defence‘s (MOD) website seems to encourage public debate, and comprehen-sive information on the defence budget is available online in an easy to navigate format. There is a clear legislative body in charge of defence related matters is the Committee of Foreign Affairs and National Security of the Chamber of Deputies, which carries out monitoring and oversight activi-ties. The defence budget is sub-ject to scrutiny by the congres-sional budget committee, the general rapporteur for the budget, and a sectorial budget rapporteur for defence and security issues. Audits of defence expenditure are carried out by external institutions such as independent think tanks. Problem areas remain, however. There is no anti-corruption policy specific to the defence sector, for example, and there is no policing to investigate corruption in de-fence beyond audit activities. The MOD has also not demonstrated openness towards working with civil society.

In the realm of financial corruption risk, asset dis-posals are an area of particular concern for Brazil. The Army does not disclose information re-garding the disposal of assets. There is some evidence of military enter-prises that lack transpar-ency, and of unauthorised private enterprise by mili-tary or defence employ-ees. On the other hand, off-budget military ex-penditures are not permit-ted.

Regarding personnel risks, Brazil has a well-established payments system, and good control over ghost soldiers. How-ever, it appears to have poor systems of hiring, promotion, and appoint-ment. Risk areas are per-sonnel in sensitive posi-tions, and limitations placed on post-retirement activities. Brazil lacks transparency and clarity in the appointment of man-agement personnel in the MOD and military, and stricter controls on promo-tions. Anti-corruption train-ing is not conducted for staff, and whistle-blower protection programmes are not effective. Never-theless, there is a strong code of ethical conduct, which is enforced by the prosecutor‘s office (though the process is often lengthy).

Brazil lacks a military doctrine to address op-erations corruption risks in theatre. There is no guidance or training for commanders for prevent-ing corruption when de-ployed on operations or peacekeeping missions, nor is there evidence that corruption is taken into consideration in the field.

Brazil‘s procurement process features some protections in place against corruption, though there are some significant limita-tions. There are few requirements placed upon bidding companies, or their subsidiaries and sub-contractors, to show that they have anti-corruption mechanisms in place; and specific due dili-gence requirements are not in place to address corruption risk in offsets. The defence procurement process, however, is available to the public online, and there are strong oversight mechanisms in place, including well-regulated tender boards and mechanisms to prevent single-sourcing and collusive bidding. Brazil also for-bids the use of agents and inter-mediaries.

China D– China‘s highly centralised struc-tures ensure a wealth of regula-tion in the defence sector, but the concentration of power itself cre-ates corruption risk arising from the lack of checks and balances.

In terms of finance corrup-tion risk, the official budg-et, which is submitted by the CMC to the NPC, excludes many expenses which are only reported internally; the exact sys-tem is unknown.

In the area of personnel corruption risk, there is considerable leadership rhetoric on the matter of anti-corruption. There are also comprehensive pen-alties for corruption,

In operations corruption risk, ‗training‘ for officials constitutes political and moral education rather than practical anti-corruption knowledge for application on the field.

Procurementis controlled by the CMC structure with almost no scrutiny and little transparency; purchases of weapons are partic-ularly closed, exposed sporadical-ly through the media.


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China (cont.)

In political corruption risk, there is no dedicated Defence Commit-tee, and the National People‘s Congress‘s (NPC‘s) formal ability to carry a veto is not evident in practice. With regard to the de-fence budget, only basic budget figures are disclosed. The intelli-gence services are a major source of secrecy and are recog-nised as highly politicised and party-centric. The People‘s Liber-ation Army‘s (PLA‘s) commercial activities in natural resources, which were previously extensive, have declined, following an earlier anti-corruption drive, though the potential for control and misuse still exists. Meanwhile, China has ratified UNCAC and sought to harmonise Chinese law with its obligations. The Central Military Commission‘s (CMC‘s) work has led to increased transparency, although only a few of its specific implementation plans are known publicly.

There is no provision for the scrutiny of information deemed to be classified by the National Admin-istration for the Protection of State Secrets. The PLA budget could be, reported-ly, double than what is known to be due to com-mercial activity of the military. On that matter, the details of such com-merce are not transparent. Nonetheless, there are many rules in place re-garding PLA asset man-agement and disposal and, although transparen-cy is still inadequate, measures to address corruption risks have been attempted.

though its effectiveness is potentially undermined by politicisation. Article 41 in the constitution provides for whistle-blower protec-tion, but it is weakly en-forced. Fairly strong pay-ment systems (though they are not separate from the chain of command) along with well established recruitment procedures are in place, but party loyalty is adjudged to be very influential. Additional-ly, facilitation payments have been a customary way of building political relationships and they continue to do so, in the absence of an independ-ent mechanism to monitor and audit officers.

There is also no evidence of corruption monitors on operations, nor guidelines in contracting while in the field. While Private Mili-tary Companies (PMCs) rarely provide services for military operations, there is no relevant law for their regulation.

While close supervision of suppli-ers is undertaken by the state, extending to stringent inspection requirements, there is no indica-tion of related independent over-sight. There is highly centralised reward of contracts; whether announcements from 2011 of increasing competition will be borne out is yet to be seen. While collusion is reported to be a prob-lem with defence procurement, the existence of political influence on supplier selection is not sup-ported by evidence. Personnel overseeing procurement are well-trained, though a lack of trans-parency in this area creates un-certainty. Finally, there is no evi-dence of a formal policy specific to the use of offset contracts, and transparency is inadequate.

India D+ With regard to political corruption risk, it is unclear from public in-formation whether a national defence policy exists in India. While the Ministry of Defence (MOD) asserts that a draft policy has been prepared, this is not available to the public. A parlia-mentary standing committee on defence examines a range of issues its effectiveness is con-strained as the recommendations of parliamentary committees are not binding on the Executive.

In finance corruption risk, procedures and controls are in place to regulate asset disposals and an independent body, the Comptroller and Auditor General of India, also exists to conduct audits on the same. Nonetheless, evidence indicates that it is difficult for members of the public to obtain infor-mation in relation to asset disposals.

With regard to personnel corruption risk, there are robust payment promotion and appointments mecha-nisms; the number of sol-diers is known, and there is no evidence of ghost soldiers. However, there is no evidence that special attention is paid to per-sonnel in sensitive posi-tions.

With regard to operations corruption risk, there is no explicit doctrine on cor-ruption as a strategic issue for operations. The MOD's annual report stipulates that command-ers at all levels receive training in corruption is-sues.

In procurement corruption risk, while anti-corruption mechanisms are be in place, their actual en-forcement is difficult to ascertain. Whistle-blowers and media re-ports have alleged that the De-fence Procurement Procedure and the Defence Production Poli-cy (released in 2011) are not strictly adhered to. It is also likely that some defence purchases are not made public.


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India (cont.)

There is no evidence that Civil Society Organisation (CSO) en-gagement has occurred to any significant extent, despite re-quests from civil society to be involved in consultations on the Whistle-blower Bill. In recent years, India has ratified UNCAC and signed up to other anti-corruption instruments, yet it is still early to gauge the extent of its compliance to these.

Also, the percentage of defence and security ex-penditure dedicated to spending on secret items is not available to the general public. While legislators are provided with access to audit re-ports related to the securi-ty sector including secret programmes, debate on their content is limited on grounds of potential breaches to internal and national security.

There are no known poli-cies or mechanisms to prevent preferred postings being solicited and press reports indicate that brib-ery is widely practised. Additionally, there is no evidence of a Code of Conduct specifically cover-ing corruption for Defence Ministry personnel, though there is instead a broader ‗Honour Code‘ in place.

However, evidence is limited as to whether in fact this training is rigor-ously carried out in the field. No guidelines are in place with regard to cor-ruption risks in contracting during operations nor is there any proof of wheth-er corruption risks are monitored in the field.

Offset contracts are often negoti-ated in secret and are not subject to public scrutiny, impacting the follow-up of offset contract re-quirements. India‘s defence pur-chasing decisions have been influenced by treaty arrange-ments with the former Soviet Union, although there is evidence that it aims to diversify its arms import sources.

Japan C Japan is placed in Band B. With regard to political corruption risk, Japan‘s National Diet (the Japa-nese legislature) has strong pow-ers of oversight and the defence policy is transparent. Engage-ment with Civil Society Organisa-tions (CSOs) has extended to noting their concerns, even if full dialogue is less evident. Other-wise healthy debate in civil socie-ty is impacted by the closed na-ture of the Japan Press Club. Strong transparency is evident with regard to the defence budget and expenditure, and related scrutiny is undertaken by a range of internal, external, and legisla-tive bodies. Two historical lega-cies, furthermore, are noted to cast different shadows on other areas of political corruption risk. Firstly, there is a legacy of strong weapons export restrictions. as-sociated wrongdoing.

In terms of financial cor-ruption risk, there is evi-dence of good controls overall. Nonetheless, there is insufficient trans-parency related to asset disposal, control of secret expenditure by parliament, and legislative debate of security sector audit. Only minimal items in the budget are opaque. Addi-tionally, off-budget spend-ing is legally permitted and there is a lack of clari-ty with regard to its extent in practice. Furthermore, there are close ties be-tween ministries and par-ticular domestic enterpris-es in the sector, prompted by the system of amaku-dari (post-retirement ap-pointment), though large scale military-owned busi-nesses do not exist.

In personnel, strong, au-tomated payment sys-tems, and strict, transpar-ent codes of conduct and ethics are indicated to be in place. However, the persistence of amakudari and non-transparent pro-motions to senior levels risk compromising recruit-ment mechanisms. Pre-emptive anti-corruption training is not as evident as reactive measures after defence-related scandals. Furthermore, while some legal protection is in place to facilitate whistle-blowing, in practice, the social consequences of reporting corruption act as a strong deterrent.

In terms of operational corruption risk, strong ethical awareness and desire to present an up-standing impression are factors aiding integrity in deployment. However, there is a lack of official or statutory mechanisms to address corruption risk in the area comprehensive-ly. For example, there is strong ethical awareness among several levels of command with regard to carrying out missions overseas, in terms of taking responsibility for representing Japan and portraying a national im-age morality and profes-sionalism..

Finally, in procurement, strict policies and mechanisms for oversight are in place, yet high profile corruption cases in this area and gaps in transparency are evident as well. While wide-ranging details regarding justifica-tions for discretionary and com-petitive procurement contracts and bidding are publically availa-ble, single sourcing is practiced to a considerable extent. A factor which sheds further light on this is Japan‘s post-World War II de-fence policy and as such, defence procurement, which are influ-enced heavily by its security trea-ty with USA. Despite adequate legal provisions relating to penal-ise corrupt suppliers, in practice, only few well-known procurement scandals have reached litigation.


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Secondly, the historical connec-tion between the defence sector and organised crime exacerbates the lack of sufficient policing to prevent

While this would be effec-tive in countering oppor-tunities for corruption, there are no legal or offi-cial documents specifying anticorruption training or guidelines

Korea B South Korea is placed in Band B, with good controls across most risk areas. In terms of political corruption risk, the National De-fence Committee is empowered to scrutinise defence policy and related issues. South Korea has signed and ratified international anti-corruption instruments such as the UNCAC and the OECD Convention, and several anti-corruption laws and policies per-taining to the public sector exist. The defence budget is transpar-ent, publicly available, and sub-ject to legislative scrutiny. Parlia-mentary oversight is imposed on the nation‘s intelligence services, their leadership and policies. The Ministry of Defence‘s (MOD) en-gagement with Civil Society Or-ganisations, however, is limited to those funded by the government, and such organisations are the ones participating in debates on defence and security issues as well, along with government offi-cials and the media. Risk as-sessment of areas vulnerable to corruption and the application of mechanisms to combat them are not, however, regularly practiced.

In finance corruption risk, while a legal framework exists for asset disposals, there is a lack of related information publicly dis-closed. The percentage of defence and security ex-penditure on secret items is not public; however, details on secret spending are subject to legislative scrutiny and parliamentary debate. Income from businesses owned by the military are clearly de-tailed in the budget and while there are provisions for its oversight, there is no evidence that they adhere to an international standard. The few cases of unauthorised private enterprise by defence and security officials which have been uncovered are dealt with by heavy penal-ties.

Strong, objective, and meritocratic procedures for the appointment and pro-motion of personnel are also in place, and there is evidence that officials in sensitive roles are subject to particular scrutiny. A comprehensive Code of Conduct exists and while there is evidence that breaches are effectively dealt with, violations and prosecutions are not made public by the military. Nonetheless, although whistle-blowing is legally protected and facilitated, there are reports of it be-ing discouraged and pun-ished in the army. The precise number of civilian and military personnel is not publicly available, given the nature of the country‘s external security threat. Furthermore, facili-tation payments made to foreign officials are legal. In the area of personnel corruption risk, the gov-ernment has made public commitments to anti-corruption.

In the sphere of opera-tions corruption risk, anti-corruption training exists for personnel involved in peacekeeping operations and monitoring of disci-pline and corruption in the field takes place through the deployment of Inspec-tor-Generals.

With regard to defence procure-ment corruption, there is trans-parency with relation to the pro-curement cycle process as well as actual and planned purchases. Defence procurement is based on the national security strategy and major purchases are planned and evaluated. Evidence indicates that open competition is well im-plemented and legislation is in place to penalise collusion and other corrupt activities of bidders. While offset contracts are as-sessed to be well-regulated and transparent, corruption risks with-in them need to be addressed further. Other features are opacity related to defence procurement financing packages, a lack of clear, formal policies for compa-nies to complain about perceived malpractice, and an absence of control over intermediaries in the procurement process.


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Korea (cont.)

Nonetheless, there are reported failures to en-force mechanisms, de-signed to deal with per-sonnel found to have tak-en part in corruption.

Mexico D+ In relation to political corruption risk, defence institutions operate with high levels of autonomy and only limited legislative oversight. The Ministry of Defence (MOD) is perceived to be ‗cleaner‘ than the public security forces (i.e. the police), which are seen as having been infiltrated by organised crime; however, several cases of organised crime in the MOD have emerged recently. A national defence and security commission exists, albeit lacking sector-specific expertise. Leaders of ethics and integrity offices are appointed by the Defence Minis-ter, raising questions about their independence. Audit bodies have found irregularities, particularly in acquisition and planning, which have not been followed up with sanctions. While arms control protocols have been signed, pro-liferation of arms continues to exist, reflecting insufficient en-forcement.

With regard to controls of financial corruption risks, the MOD disclosed infor-mation on secret spending following citizens‘ re-quests for the same, showing that less than 1% is spent on secret items. However, legislative over-sight of such spending is of insufficient quality and effectiveness. A right to information law is in place and has been extended to defence issues, but is found to be cumbersome to use in practice. Only summary information on asset disposals is availa-ble to the public. Sales of arms, a source of income for the Army, are not sub-ject to appropriate scruti-ny. While off-budget ex-penditure is legalised for contingency purposes, audits have uncovered irregularities in its use.

Code of Conduct for the military. Recently ap-proved anti-corruption laws encourage anti-corruption reporting, alt-hough this is impacted by limited protection for whis-tle-blowers. While high-level promotions must be ratified by the legislature, the procedure is far too time-consuming and lack-ing in expertise for thor-ough reviews to take place. There is no indica-tion of special attention paid to sensitive postings and evidence reveals that bribes are paid for exemp-tion from conscription. On the other hand, training programmes on ethical issues and the Code of Conduct are carried out as part of Mexico‘s Merida Initiative.

With relation to control of corruption risks in opera-tions, training of troops covers human rights, but not corruption issues, and there is no anti-corruption monitoring in place. The lack of control of soldiers is reported to be well-known, and as the military plays an increasing role in public security, there is increasing contact with civilians heightening cor-ruption risk.

In procurement, civilian personnel do have access to many pro-curement debates, and most military procurement occurs through ―direct adjudication‖. However, tender boards lack expertise in defence procurement and, as such, are seen as ineffec-tive. Cases of bribery to win con-tracts have been exposed, while audits have uncovered supplier delay and questions about the suitability of materiel purchased. No integrity requirements are placed upon bidding companies, although the private sector (not defence-specific) has instigated an initiative to sign anti-corruption clauses in contracts with the gov-ernment. The hiring of ―consul-tancy, advising, or support‖ ser-vices for procurement is prohibit-ed, and bidders must be legally identified, lowering the risk of impropriety through agents and brokers. Though offsets are pro-hibited by the North American Free Trade Agreement (NAFTA), defence is an exception, and such contracts are very opaque.


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Apart from ties to the U.S. through the Merida Initiative, evidence indicates that political influence from abroad does not have a major effect on procure-ment decisions, with imports from a wide range of countries.

Russian Federation

D– The country‘s Ministry of Defence (MOD) adopted an anti-corruption plan in May 2010 in order to align with the government-wide nation-al anti-corruption plan and strate-gy. While the plan includes anti-corruption measures, the opacity of the MOD overall makes it diffi-cult to determine whether it is implemented or effective.

Regarding political corrup-tion risk, the assessment shows the legislature has oversight capacity de jure, but lacks de facto control or oversight capabilities. The parliament and de-fence committees formally approve the budget, but there is scepticism of their true control of spending. Most government state-ments regarding defence spending are recognised to come verbally during interviews with military officials, rather than in published, publicly availa-ble documents. Nearly half of the defence budget is secret. There are indi-cations of almost no ex-ternal control over the intelligence services. Re-cent developments have shown Russia to be unre-sponsive to civil society organisations. There is evidence of organised crime penetration into defence and security es-tablishments,

In personnel corruption risk, the criteria for certain appointments are unclear: several top MOD positions have been filled by officers with convictions on their records. Conscription is an area that is recognised to be rife with bribery—payments are made to avoid it entirely or for se-lect positions. There is no evidence of whistle-blower protection, and a fear of reporting is understood to exist, as officers are often sued on the grounds of disclosure. Ghost officers have been linked all the way to the most senior leadership of the defence sector. There is evidence of a separation between chains of command and chains of payment.

In the area of operations, there is no evidence of people in place to prevent corruption in the field, or specific guidelines for missions.

In procurement risk, non-secret spending is indicated to be con-ducted with relative transparency, with tenders being published in advance. There are civic projects that aim to monitor the contracts and procurements that are not secret, which have had some impact including getting some contracts cancelled. 30% of the MOD‘s spending, however, is secret. This is reported to be conducted through arms compa-nies or import-export businesses which are owned by the MOD. These businesses are understood to be only weakly regulated and lack transparency. In addition, there is no evidence of laws regu-lating the use of intermediaries or agents in the procurement pro-cess or of regulations of subsidi-ary contractors‘ anticorruption activities.


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and little evidence of the government‘s ability to address this. There are no signs that the MOD is directly linked to the ex-tractive industries, but some military officials have controlling financial interests in natural re-source companies. A number of government-owned arms companies and scientific institutes exist which are not indi-cated to be subject to parliamentary scrutiny.

United States

B In relation to political corruption risk, the country's defence policy is widely debated and, with the exception of certain classified documents, is publicly accessible. The country has signed up to international anti-corruption in-struments including UNCAC and the OECD Convention. There is room for improvement for internal and external audit processes. The Department of Defence (DOD) has been criticised for providing auditors with data of questionable quality. With regard to arms con-trol mechanisms, three agencies are jointly responsible for deci-sion-making. This has been found to lead to some problems with overlapping jurisdictions and a lack of clarity.

Regarding finance corrup-tion risk, mandatory clas-sification reviews are carried out to determine whether protected records merit continued classifica-tion. There is no evidence of business ownership by defence and security insti-tutions. Nevertheless, over 8% of the national security budget is dedi-cated to secret items, and significant off-budget mili-tary expenditure is asso-ciated with military opera-tions in both Iraq and Afghanistan, which have been considered as emergency spending.

On the personnel front, robust punitive mecha-nisms are in place both for personnel found to have taken part in bribery and corruption, and there is protection in place for whistle-blowers who report these activities. The Ency-clopaedia of Ethical Fail-ure, for use in training, includes a collection of cases of corruption and resultant actions. The Whistle-blower Program commits the Inspector General of the Department of Defence to whistle-blower protection and training of personnel on their whistle-blower rights.

Shortcomings exist in the area of operations corrup-tion risks. While guide-lines and training exist to address corruption risks whilst on deployed opera-tions, evidence of corrup-tion in the field indicates that these instruments are not always effective. In addition, numerous prob-lems have been associat-ed with the employment of Private Military Con-tractors (PMCs), as lower levels of scrutiny are ap-plied to PMCs than those applied to the armed forc-es.

The USA has extensive legisla-tion in place to regulate defence procurement. It is also one of the best countries in the requirements it places on companies who wish to bid for Pentagon contracts. However, there is a lack of trained and experienced contract staff, which weakens contract negotiation, management, and oversight. Furthermore, evidence suggests that defence acquisition decisions are often political in nature. The Regional Defence Employment and Purchase Pro-jection System aims to forecast defence expenditures at the state level. These projections, which are updated annually, are made available on request to business-es, trade associations, state and local government planning agen-cies, and other organisations with an interest in defence markets.


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United States (cont.)

Systems are in place to address corruption risk in the areas of payroll, pro-motions, and salary chains, and the Standards of Conduct Office over-sees Codes of Conduct throughout the Depart-ment of Defence.

(a) Level of Corruption Vulnerability.

This table relates to a CESifo DICE Report Database Article (2/2013) (Summer), available at: www.ifo.de/w/4BdzShSs3

Source: Transparency International UK, Government Defence Anti-Corruption Index 2013, http://government.defenceindex.org/results/overall, accessed on 01. July 2013.

http://www.ifo.de/w/4BdzShSs3

http://government.defenceindex.org/results/overall