On September 5, 2024, the Forum on the Arms Trade and Transparency International hosted an event discussing defense offsets. Experts examined current research on the many risks associated with increased offset demands in a lax U.S. regulatory environment, the role of offsets and anti-corruption efforts in South Korea, as well as the role of sovereign wealth funds, especially two based in the United Arab Emirates. All offered recommendations on how to improve transparency and tackle corruption that is currently endemic to offsets.
Video of the event is available in three recordings:
Video of the event is available in three recordings:
- Original languages - https://youtu.be/ufzqZlgbwmo
- English only (with interpretation) - https://www.youtube.com/watch?v=2pJN7YLrxRs
- Korean only (with interpretation) - https://youtu.be/LF7B20ZXVtU
Select resources*
Guide to the recording (with timestamps indicated)
Sara Bandali, Director of International Engagement, Transparency International-United Kingdom (TI-UK) (moderator)
4:35 Welcome and definition of offsets
Colby Goodman, Senior Researcher, Transparency International Defence & Security (TI-DS), and Transparency International-United States (TI-US)
8:24 Replying to questions: “You’ve noted some big changes in the defense offset market in the past few years. Could you highlight some of these key changes? Based on your report, what do you see as the most significant corruption risks with defense offsets? And looking ahead, how do you think these risks could evolve, particularly in the relationships between U.S. defense companies and partner countries around the world?"
Byung-Ook Choi, Professor of National Security, Sangmyung University in Seoul, and Director, Institute for Security and Unification Studies, a member of the Integrity Defense Committee of Transparency International Korea
19:57 Replying to questions: “South Korea is in a unique position—not just as a major purchaser of weapons but also as an emerging supplier. Offsets have played a role in some of these recent deals, and they’ve certainly stirred up some debate. It would be good to hear more about this and your take on how South Korea is navigating the complexities and challenges of offsets.”
29:52 Replying to questions: “You’ve highlighted some serious concerns about the transparency of these deals. How do you see these issues affecting South Korea’s broader defense strategy and its relationships with international partners, particularly the U.S.? And what role do you think public and governmental oversight should play in mitigating these risks?”
Jodi Vittori, Non-Resident Fellow, Carnegie Endowment for International Peace, and Professor of Practice and co-chair of the Global Politics and Security program at Georgetown University’s School of Foreign Service
33:15 Replying to questions: “You’ve been a strong voice in the fight against corruption for quite a while, and your recent work on sovereign wealth funds dives deep into some of these issues. Can you break down how sovereign wealth funds tie into the world of offsets? It would be good to also hear more about what you discovered specifically in the case of the UAE.”
47:53 Replying to questions: “Given what you’ve found about the UAE’s use of sovereign wealth funds in defense offsets, what do you see as the most significant risks these funds pose in terms of corruption and lack of transparency? And how do you think international regulatory bodies or governments can address these challenges?”
RECOMMENDATIONS
“What are your top recommendations for addressing some of the challenges and issues that you have highlighted particularly on how to improve transparency and tackle corruption that is currently endemic to defence offsets, is there any advice you would give to governments/policy makers on this issue?”
54:35 Colby Goodman
57:35 Byung-Ook Choi
1:00:25 Jodi Vitorri
QUESTION AND ANSWER (Q&A)
1:01:55 “Have any of the speakers or their organizations sought to define what the boundaries should be for “legitimate” national security that would set the limits and so permit far-reaching transparency, even if it is not total transparency?”
With responses by Colby Goodman and Byung-Ook Choi.
1:06:43 “Are sovereign wealth funds (SWFs) which hold investments in other countries (the USA, for example) required to pay taxes on those investments? If so, does this offer an opportunity to improve disclosure (in tax filings) concerning how these SWFs are operating in a particular country?” and “the U.S. national security community is increasingly concerned with "adversarial capital" which is primarily a concern about state actors within U.S. and allied/partner countries. Is there any realistic chance to use that growing infrastructure for anti-corruption purposes or would that risk tainting good governance efforts with power politics concerns?”
With responses by Jodi Vitorri.
1:11:30 “Do you think that South Korea’s use of offsets for military and economic development is a model that could be copied by other countries? Or were there factors specific to South Korea that made it able to successfully translate offsets into a strong domestic defense industry?”
With responses by Byung-Ook Choi and Colby Goodman.
* Panelists at this event do not necessarily endorse the views and opinions of others, nor does the Forum necessarily endorse the views and opinions of others. Please feel free to contact panelists directly for additional conversation.
- Colby Goodman, "Blissfully Blind: The new US push for defence industrial collaboration with partner countries and its corruption risks," Transparency International Defence & Security (TI-DS), April 11, 2024. See also slides used during the event.
- Jodi Vittori and Lakshmi Kumar "Sovereign Wealth Funds: Corruption and Other Governance Risks," Carnegie Endowment for International Peace, June 26, 2024. See also slides used during the event.
- Byung-Ook Choi, prepared remarks, English and 한국어
Guide to the recording (with timestamps indicated)
Sara Bandali, Director of International Engagement, Transparency International-United Kingdom (TI-UK) (moderator)
4:35 Welcome and definition of offsets
Colby Goodman, Senior Researcher, Transparency International Defence & Security (TI-DS), and Transparency International-United States (TI-US)
8:24 Replying to questions: “You’ve noted some big changes in the defense offset market in the past few years. Could you highlight some of these key changes? Based on your report, what do you see as the most significant corruption risks with defense offsets? And looking ahead, how do you think these risks could evolve, particularly in the relationships between U.S. defense companies and partner countries around the world?"
Byung-Ook Choi, Professor of National Security, Sangmyung University in Seoul, and Director, Institute for Security and Unification Studies, a member of the Integrity Defense Committee of Transparency International Korea
19:57 Replying to questions: “South Korea is in a unique position—not just as a major purchaser of weapons but also as an emerging supplier. Offsets have played a role in some of these recent deals, and they’ve certainly stirred up some debate. It would be good to hear more about this and your take on how South Korea is navigating the complexities and challenges of offsets.”
29:52 Replying to questions: “You’ve highlighted some serious concerns about the transparency of these deals. How do you see these issues affecting South Korea’s broader defense strategy and its relationships with international partners, particularly the U.S.? And what role do you think public and governmental oversight should play in mitigating these risks?”
Jodi Vittori, Non-Resident Fellow, Carnegie Endowment for International Peace, and Professor of Practice and co-chair of the Global Politics and Security program at Georgetown University’s School of Foreign Service
33:15 Replying to questions: “You’ve been a strong voice in the fight against corruption for quite a while, and your recent work on sovereign wealth funds dives deep into some of these issues. Can you break down how sovereign wealth funds tie into the world of offsets? It would be good to also hear more about what you discovered specifically in the case of the UAE.”
47:53 Replying to questions: “Given what you’ve found about the UAE’s use of sovereign wealth funds in defense offsets, what do you see as the most significant risks these funds pose in terms of corruption and lack of transparency? And how do you think international regulatory bodies or governments can address these challenges?”
RECOMMENDATIONS
“What are your top recommendations for addressing some of the challenges and issues that you have highlighted particularly on how to improve transparency and tackle corruption that is currently endemic to defence offsets, is there any advice you would give to governments/policy makers on this issue?”
54:35 Colby Goodman
57:35 Byung-Ook Choi
1:00:25 Jodi Vitorri
QUESTION AND ANSWER (Q&A)
1:01:55 “Have any of the speakers or their organizations sought to define what the boundaries should be for “legitimate” national security that would set the limits and so permit far-reaching transparency, even if it is not total transparency?”
With responses by Colby Goodman and Byung-Ook Choi.
1:06:43 “Are sovereign wealth funds (SWFs) which hold investments in other countries (the USA, for example) required to pay taxes on those investments? If so, does this offer an opportunity to improve disclosure (in tax filings) concerning how these SWFs are operating in a particular country?” and “the U.S. national security community is increasingly concerned with "adversarial capital" which is primarily a concern about state actors within U.S. and allied/partner countries. Is there any realistic chance to use that growing infrastructure for anti-corruption purposes or would that risk tainting good governance efforts with power politics concerns?”
With responses by Jodi Vitorri.
1:11:30 “Do you think that South Korea’s use of offsets for military and economic development is a model that could be copied by other countries? Or were there factors specific to South Korea that made it able to successfully translate offsets into a strong domestic defense industry?”
With responses by Byung-Ook Choi and Colby Goodman.
* Panelists at this event do not necessarily endorse the views and opinions of others, nor does the Forum necessarily endorse the views and opinions of others. Please feel free to contact panelists directly for additional conversation.
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