This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Query
Please conduct a literature review of the available empirical evidence on the relationship between state-threat linked national security risks and illicit finance, particularly issues related to financial secrecy and corporate transparency, in a global context.
Summary
Illicit finance vulnerabilities can be exploited by state-linked actors to conduct a range of threat activities, such as access to strategic sectors, cyberthreat operations, corruption and foreign political interference. Notably, opaque ownership or shell companies are used to obscure control, move value and reduce attribution linked to threat activities. Experts recommend strengthening beneficial ownership transparency, verification and information sharing, while cautioning against over-securitised responses that risk selective enforcement or undermine longer term institutional reform.
Main points
- Existing literature links illicit finance vulnerabilities to state threats primarily through documented mechanisms of concealment, including the use of shell companies, nominee arrangements and layered ownership structures.
- Additionally, the exploitation of the pseudonymity and other vulnerabilities of virtual assets, such as cryptocurrencies, is an emerging area of concern.
- Although it is not always possible to clearly identify national security implications, case evidence shows that opaque corporate and financial structures are used for the purposes of access to strategic sectors, cyberthreats, corruption and forms of foreign political interference such as covert political finance.
- Financial secrecy vehicles are also exploited as part of sanctions evasion schemes, which aim to hinder countermeasures designed to address state threats, including proliferation.
- The literature emphasises that policy responses tend to focus on improving beneficial ownership transparency, verification and information sharing, while cautioning against over-securitisation and selective enforcement, which may negatively affect multilateral efforts to counter illicit finance.
- While there is strong documentation of how structures used to obscure company and asset ownership are used in state-linked activity, there is less evidence –particularly in the form of robust quantitative, longitudinal studies – that can test whether changes in the use of financial secrecy are associated with measurable security relevant outcomes.
Authors
Sam Parrett-Jung
Reviewers
Jamie Bergin, Vincent Freigang, Katherine Wilkins and Buren Mandakhbileg (TI)
Rosa Loureiro-Revilla (U4)
Date
02/04/2026
