White-Collar Crimes and Corruption at Border Crossings in the Kurdistan Region of Iraq: Causes, Effffects, and Challenges for Reform

Abstract

This paper examines border crossing corruption in Kurdistan in northern Iraq. Based on data obtained from key informants, government documents, peer review literature and grey literature, the study uncovered widespread white-collar fraud by criminals and corruption in all four formal, and all five informal, border crossings in Kurdistan. These criminals and corruption take two forms: collusion between factional groups and private companies; and white-collar fraud committed by criminals. The unique feature of these criminals and corruption is that it is the result of an officially sanctioned system of sharing management of border control posts between Kurdistan’s two main political parties - the Patriotic Union of Kurdistan (PUK) and the Democratic Party of Kurdistan (PDK) – i.e. the politicization/privatization of border control governance. Privatization in this context attracted criticism due to abuse and inefficiency. For the most part, the abuse focuses on consequences of privatization. Moreover, politicization has drawn the private sector into its web of corruption thereby creating a blend of politicization and privatization wherein officials and owner of firms have used legal means to protect their own interests thereby exercising an artificial monopoly and privilege. The total estimated sum of revenue lost to the government of Kurdistan because of these criminals and corruption is more than $US 200 million per month . The present paper discusses two alternative ways of dealing with these criminals and corruption: either radical change to end border control corruption completely by structural and/or cultural change; or piecemeal reform to reduce the extent of the damage caused by border control corruption. While the long-term aim should be radical change in order to eliminate the problem, a more realistic objective is piecemeal reform in order to manage the problem by minimizing its effects.