Corruption refers to the abuse of entrusted power for personal gain, often involving bribery, embezzlement, favoritism or other unethical conduct by individuals in positions of authority. Within the discipline of Know Your Customer (KYC), Anti-Money Laundering (AML) and Compliance, corruption is a key financial crime risk, as it frequently involves the movement and concealment of illicit funds through legitimate financial systems.

Corruption can take many forms, including public sector corruption - for example: a government official accepting bribes in exchange for favorable treatment or private sector corruption, where employees may engage in kickback schemes or manipulate contracts for personal benefit. Funds derived from corrupt activities are often laundered through complex transactions, shell companies, offshore accounts or real estate purchases to hide their illegal origin.

Financial institutions and regulated entities are required to identify and mitigate the risk of facilitating corrupt activities, especially when dealing with high-risk customers such as politically exposed persons (PEPs) or those operating in jurisdictions known for weak anti-corruption enforcement. This includes conducting Enhanced Due Diligence (EDD), monitoring for suspicious activity and screening for adverse media related to corruption.