Illicit financial flows (IFFs) are illegal movements of money or capital from one country to another. GFI classifies this movement as an illicit flow when the funds are illegally earned, transferred, and/or utilized. Some examples of illicit financial flows might include:
- A drug cartel using trade-based money laundering techniques to mix legal money from the sale of used cars with illegal money from drug sales;
- An importer using trade misinvoicing to evade customs duties, VAT, or income taxes;
- A corrupt public official using an anonymous shell company to transfer dirty money to a bank account in the United States;
- An human trafficker carrying a briefcase of cash across the border and depositing it in a foreign bank; or
- A terrorist wiring money from the Middle East to an operative in Europe.
GFI estimates that in 2013, US$1.1 trillion left developing countries in illicit financial outflows. This estimate is regarded as highly conservative, as it does not pick up movements of bulk cash, the mispricing of services, or many types of money laundering.
GFI believes that the most effective way to limit illicit financial flows is to increase financial transparency. GFI believes that we should enact policies to:
- Detect and deter cross-border tax evasion;
- Eliminate anonymous shell companies;
- Strengthen anti-money laundering laws and practices;
- Work to curtail trade misinvoicing; and
- Improve transparency of multinational corporations.
1. Knowledge Transfer – We coach administrative / law enforcement officials, on the requirements of law & procedures and assist them to do right with courage and grit.
2. We resurrect the ‘good governance practices’ of the past [in performing administrative / law enforcement work] which were in the past 3 decades gradually relegated into oblivion.
3. System failure, if any, noticed in administration or law enforcement are brought to the notice of the authorities suggesting workable remedies.