Illicit financial flows describe the movement of money that is illegally acquired, transferred or spent across borders. The sources of the funds of these cross-border transfers come in three forms: corruption, such as bribery and theft by government officials; criminal activities, such as drug trading, human trafficking, illegal arms sales and more; and tax evasion and transfer mispricing.
Why it matters
The volume of illicit financial flows is huge. They have a major impact on the global economy with a devastating impact on poorer countries and have clear links to corruption. Secrecy jurisdictions play a major role in receiving illicit financial flows. Governments should establish mandatory, public registers that disclose the beneficial ownership of trust funds and companies to allow illicit financial flows to be more easily traced and make it harder for people to benefit from the proceeds of corruption and crime.