Economic crime in war

Quenivet, Noelle; Hock, Branislav

Abstract

This presentation focuses on a largely unexplored area – economic crime in war. By highlighting key examples of how economic crime links to war, we aim to open the discussion on how to disrupt economic crime in war effectively. We invite scholars with diverse disciplinary backgrounds, being it economic criminology; international law or security studies, to participate in this exploration.
Economic crime in the Russo-Ukrainian war illustrates the major impact that fraud, corruption, money laundering, bribery and sanction evasion have on national security and global peace. Tens of billions of dollars provided by Western allies to Ukraine in military and humanitarian aid present a major risk of economic crime committed internally by Ukrainian fraudsters and corrupt government officials. Inflated pricing for military food suppliers (Radio Free Europe, 2023) or the embezzlement of aided weapons ending up in the hands of criminals exemplify large-scale issues in this area (Guardian, 2022). Moreover, major quid-pro-quo bribery schemes have been revealed. Consider the case of military recruitment chiefs accepting bribes in exchange for illegally transporting draft-eligible men across the border despite a wartime ban on them leaving the country, a scandal resulting in a SBI’s criminal investigation and firing all regional recruitment bosses in August 2023 (Reuters, 2023). Similarly, Ukrainian officials received bribes ranging from $3,000 to $15,000 for issuing corrupt medical exemptions enabling mass departures abroad with at least thousands of people avoiding military service (Guardian, 2023).
Furthermore, many economic crimes are transnational (Hock, 2020, 2021, 2022). In large volumes, the Kremlin and Russian oligarchs have laundered their dirty money in the United Kingdom (UK). Until the February 2022 invasion, however, the security impact of those activities has been largely ignored (House of Commons, 2022). It is well documented, for example, how Russian oligarchs and Russia’s state-owned companies such as Gazprom have funded the war through the UK financial system by establishing their own private military companies (Financial Times, 2023).
Economic crimes can even be linked to war crimes. Russian aggression in Ukraine that began in April 2014 has been associated with large number of war crimes including murder, torture, terrorism, deportation, forced transfer, rape, and attacks against civilian objects (OHCHR, 2016). Since the second Russian invasion in February 2022 until August 2023 alone, Ukrainian prosecutors have documented more than 104,000 war crimes committed by Russian forces and others (Office of General Prosecutor, 2023). Our own preliminary work indicates that many of those war crimes are facilitated by economic crimes and even can take the form of war crimes. For example, a major issue has been how large businesses and professional enablers directly and indirectly receive money by facilitating war crimes through money laundering, fraud, and helping to evade sanctions against Russia (House of Commons, 2022).
In this light, we argue that new knowledge on effective response to economic crime as a matter of national/international security is urgently needed. Indeed, the evidence of economic crime being an important issue in warfare has started a process of a major policy shift in economic crime policing from purely finance-driven to policing motivated by the protection of national security. The link between economic crime and national security, however, is largely unexplored, both at a theoretical level and at a practical level, especially when it comes to warfare even though we are aware of economic crimes taking place in occupied territories and areas of contested statehood that belong to the former Soviet Union realm.
It was only after the war started in 2014 that Ukraine and the Western allies began recognising how economic crime linked to Russia and the Russo-Ukrainian war posed serious risks to national security and global peace. For example, in response to numerous corruption scandals, the Ukrainian president’s office stated that corruption allegations ‘pose a threat to Ukraine's national security and undermine confidence in state institutions’, and President Zelensky even linked bribery of government officials at a time of war to ‘high treason’ (Reuters, 2023).
We thus contend that in a first step, we need a better understanding of which economic crime schemes are most pervasive in the war in Ukraine and the challenges Ukrainian authorities face. Once this is established, we can then suggest changes in the nature of policing in this area. Criminal justice systems need to rethink, for example, their operational prioritisation, which agencies have competence, and cooperate to get a more holistic understanding of the actors and networks involved.
After explaining what is encompassed under the notion of ‘economic crimes’, this paper will provide examples of economic crimes that have been reported in the war in Ukraine and highlight the challenges posed to law enforcement agencies in Ukraine and abroad.

Citation

Quenivet, N., & Hock, B. (2024, April). Economic crime in war. Presented at Crime and Counteraction to it in the Conditions of War and in the Postwar Perspective: An Interdisciplinary Panorama, Kharkiv National University of Internal Affairs (Ukraine)

• Presentation Conference Type: Speech
• Conference Name: Crime and Counteraction to it in the Conditions of War and in the Postwar Perspective: An Interdisciplinary Panorama
• Conference Location: Kharkiv National University of Internal Affairs (Ukraine)
• Start Date: Apr 19, 2024
• End Date: Apr 19, 2024
• Deposit Date: Apr 21, 2024
• Publicly Available Date: Apr 23, 2024
• Keywords: Ukraine; economic crime; war; armed conflict; war crime
• Public URL: https://uwe-repository.worktribe.com/output/11909517