Shadow Economies: The Rise of Illicit Networks and Alternative Markets in Sanctions Circumvention

This paper examines how illicit financial flows (IFFs) in the Western Balkans and Black Sea regions have surged in the wake of Russia’s invasion of Ukraine. Using trade and econometric analysis, it estimates that IFFs doubled to USD 31 billion by 2023, driven by sanctions evasion, trade misinvoicing, and re-exports of dual-use goods. Armenia and Serbia have emerged as key re-export hubs, while weak enforcement and state capture have deepened vulnerabilities across the region. The study calls for stronger EU oversight, early warning systems, and closer alignment with export control regimes to curb sanctions circumvention.

Consulting firms, corruption and state capture: A case study from South Africa

This paper analyses how consulting firms enabled state capture in South Africa’s state-owned enterprises. It shows how weak procurement rules, manipulated success fees, and the reputational cover of global firms like McKinsey allowed local partners Regiments and Trillian to embed themselves within Transnet and Eskom. By sidelining internal expertise and justifying inflated contracts, consultants became active facilitators of corruption—undermining state capacity and exposing systemic governance risks.