Published: October, 2022
Authors: Maha Rafi Atal, Stephanie Trapnell, Dieter Zinnbauer
The commodity trading sector has historically presented particular corruption risks. From the extraction of raw materials to the final sale of refined goods, commodities pass along complex supply chains with multiple overlapping intermediaries. For each firm along the chain, commodity trading is a low-margin, high-volume activity, where profits depend on arbitrage. In this market, offshore financial centers (OFC), minimally-regulated global financial hubs and professional “enablers” facilitate everything from questionable deals to outright theft. Corruption at this cross-national scale does not simply distort competition and prices. It can erode political stability, exacerbate conflict, and jeopardize national security by allowing powerful actors to behave with impunity.
