ABSTRACT
Offsets, which is mainly tied to defence and security sector, is claimed to be the second most corrupt business sector by Transparency International (TI) UK's 2002 Bribe payer's index and that 40% of all corrupt practise happens in arms trade. Offsets projects are normally not announced or published due to commercial and security reasons, especially if the project relates to transfer of critical technologies to allies. In such instance, this may create an impression that such offsets transactions and projects are less transparent. This chapter argues that the practice of offsets itself should not be eliminated due to its intrinsic value but to develop a structured offsets implementation process that promotes greater transparency. It introduces Transparency International's (TI's) view on offsets, and discusses several of the allegations of corrupt practice made on offsets using case studies, highlighting areas where offsets can be susceptible to corrupt practice. The chapter suggests actions that stakeholders can undertake to mitigate corrupt practice in offsets.
