Tackling corruption in international investment

International investment plays a pivotal role in driving economic growth and sustainable development, often serving as a major source of external finance for developing countries. It helps countries to connect to international markets, mobilize global resources and bridge financing gaps for essential investment projects. It also serves as a vehicle for technology transfer, innovation, competitiveness, local capital investments, employment and tax revenues. International investment leads to improved domestic institutions, technological and human development, increased productivity, poverty reduction and many more positive effects, all of which are crucial for the achievement of the Sustainable Development Goals.

However, corruption seriously impedes these efforts. It negatively affects the attraction and retention of foreign investments, fair competition and investment quality, resulting in long-lasting consequences for the economy, environment and society. Corruption compromises the intended benefits of investment and may lead to inflated costs, unproductive debts and decreased quality of life for the public.

International investment is a primary engine for boosting economic growth and rapid recovery, with a view to contributing to the attainment of 2030 Sustainable Development Goals. Governments invest a significant portion of their national budgets in investment projects. However, there is often a sizeable investment gap due to the vast demand for development. To address the investment deficit, governments often need to cooperate with international players, such as foreign governments, multilateral financial and development institutions or business entities, including through public-private-partnership. Foreign direct investment (“FDI”) also plays an important role. By investing abroad, private sector actors expand their business and open up new markets, which, for States hosting the investments, can lead to additional tax revenues, increased employment and easier access to new technologies. Against this backdrop, international investment plays a vital role in helping countries, in particular developing countries, mobilize global resources, bridge financing gaps and promote economic development.

Corruption poses significant threats to countries around the world and negatively affects the attraction and retention of foreign investments. It weakens institutions, erodes trust and threatens economic growth, including undermining fair competition and discouraging investment. Due to their vast financial scale, complex delivery requirements, and involvement of international players, international investment projects are constantly exposed to higher corruption risks.

Resolution 8/9 of the Conference of States Parties to the UN Convention against Corruption, adopted at its Eighth Session in December 2019 in Abu Dhabi, noted the positive role of international investments and the importance of minimizing opportunities for corruption and transfer of proceeds of crime in this context. In this resolution, the Conference requested UNODC to consider organizing expert meetings and discussions to discuss the issues of the existence and extent of corruption and transfer of proceeds of crime in the context of international investments, with a view to raising awareness of existing issues in this area and promoting the implementation of the Convention and other relevant international instruments.

In the political declaration adopted during the 2021 special session of the General Assembly against corruption, UN Member States noted the importance of minimizing opportunities for all acts of corruption in international investments, and committed to adopting measures at the national level to put safeguards in place to prevent business and investment policies from being abused by corruption offenders.

To enhance synergies between promoting sustainable development through the implementation of the UN Convention against Corruption and mitigating corruption risks in international investment projects, UNODC helps States improve their accountability and integrity structures. This support includes developing and disseminating relevant knowledge products, enhancing the exchange of information, good practices and knowledge, promoting international cooperation, and strengthening capacities to prevent and combat corruption in international investment.

The UNODC project entitled “Fostering Sustainable Development by Supporting the Implementations of UNCAC in Countries along the Silk Road Economic Belt” is designed for this purpose.

UNODC is also working to build synergy between anti-corruption and foreign investment specialists. Enhancing cooperation and the understanding of issues of the existence and extent of corruption in the context of FDI and investor-state dispute settlement will facilitate discussion of challenges and identification of ways forward for minimizing the risks of and opportunities for corruption in foreign direct investment and appropriately addressing corruption allegations in investment-state dispute settlement mechanisms.

Project on fostering sustainable development by supporting the UNCAC implementation in countries along the Silk Road Economic Belt

Learn more about UNODC’s dedicated project aimed at promoting international cooperation in addressing corruption in international investment projects.

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This collection of relevant policy documents, knowledge products and other resources aims to help policymakers, practitioners and researchers enhance knowledge in the prevention and combating of corruption in international investment projects.

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United Nations

Office on Drugs and Crime

Corruption and Economic Crime Branch

Tackling corruption in international investment

More about international investment and corruption

UNODC’s mandates and work

Project on fostering sustainable development by supporting the UNCAC implementation in countries along the Silk Road Economic Belt

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