RULE OF LAW – the legal and political systems, structures and practices that condition a government’s actions to protect citizens’ rights and liberties, maintain law and order, and encourage the effective functioning of the country.
RENT-SEEKING – a term from economics where actors attempt to derive economic rents by manipulating the social and political environment in which economic activities occur, rather than by adding value. Not all rent-seeking behaviour can be equated with corruption. However, rent-seeking may involve corruption where officials solicit or extract bribes for applying their discretionary authority for awarding legitimate or illegitimate benefits to clients.
SECRECY JURISDICTIONS – territories, including cities, states/provinces and countries that encourage the relocation of otherwise foreign economic and financial transactions through strong privacy protection rules. These jurisdictions ensure that the identity of those relocating their money through them cannot be disclosed. This often undermines legislation and regulation of another jurisdiction. Many secrecy jurisdictions are also tax havens.
SEXTORTION – the practice of soliciting sexual favours in exchange for a job or a promotion or a pass to the next grade, for example.
SHELL COMPANY – a limited liability entity having no physical presence in their jurisdiction, no employees and no commercial activity. It is usually formed in a tax haven or secrecy jurisdiction and its main or sole purpose is to insulate the real beneficial owner from taxes, disclosure or both. Shell companies are also referred to as international business companies, personal investment companies, front companies, or mailbox/letterbox companies.
SOLICITATION – the act of a person asking, ordering or enticing someone else to commit bribery or another crime.
SPOILATION – in legal terms, spoilation is the intentional destruction or alteration of a document required for evidence; more broadly it refers to the destruction or plunder of something valuable. Spoilation occurs when high-ranking officials loot the wealth of their states (see KLEPTOCRACY). The spoils are the benefits reaped, the booty, rewards, profits etc. from corrupt acts.
SPORADIC CORRUPTION – the opposite of SYSTEMIC CORRUPTION. Sporadic corruption occurs irregularly and therefore it does not threaten the mechanisms of control nor the economy as such. It is not crippling, but it can seriously undermine morale and sap the economy of resources.
STATE CAPTURE – the phenomenon in which outside interests (often the private sector, Mafia networks, etc.) are able to bend state laws, policies and regulations to their (mainly financial) benefit through corrupt transactions with public officers and politicians. The notion of state capture deviates from traditional concepts of corruption, in which a bureaucrat might extort bribes from powerless individuals or companies or politicians themselves steal state assets (see KLEPTOCRACY). State capture is recognised as a most destructive and intractable corruption problem, above all in transition economies with incomplete or distorted processes of democratic consolidation and insecure property rights.
SYSTEMIC CORRUPTION – as opposed to exploiting occasional opportunities, endemic or systemic corruption occurs when corruption is an integrated and essential aspect of the economic, social and political system. Systemic corruption is not a special category of corrupt practice, but rather a situation in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which most people have no alternatives to dealing with corrupt officials.