Combating illicit financial flows

Project description

Title: Combating illicit financial flows
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)​​​​​​​
Co-funded by: Norwegian Ministry of Foreign Affairs (MFA)​​​​​​​
Country: Global
Overall term: 2021 to 2024

Context

Illicit financial flows (IFFs) present a complex global challenge. The term refers to financial flows that are illicit because of their origin (e.g. stemming from environmental crime), their purpose (e.g. to finance terrorism) or the nature of the transfer (e.g. money laundering).

Their effects are especially devastating for low-income countries and undermine international efforts to promote sustainable development.

The criminal activities linked to IFFs can destabilise entire regions and increase the risk of violent conflict.

The United Nations estimates that USD 1.6 trillion are lost every year due to IFFs – dwarfing the amount low-income countries receive in official development assistance. IFFs prevent urgently needed investments in health, education and other public services.

Moreover, access to international finance depends on how well countries can prevent ‘dirty money’ from entering the financial system.

Objective

Global, regional and national systems for the development-oriented fight against illicit financial flows are strengthened.

Combating illicit financial flows helps developing and emerging economies to mobilise their revenues, become safer and grow their economy.

Approach

The programme pursues a holistic approach against IFFs that focuses on financial transactions linked to illicit or legally questionable activities (‘follow the money’). Given the cross-border nature of IFFs, the programme aims to bring about greater policy coherence nationally, regionally and globally.

To this end, the programme implements the following activities in its priority regions Africa, Latin America and the Western Balkans:

  • Prevention: setting up transparency registers in Albania to provide information about the true beneficial owners
  • Financial investigation: introducing inter-agency and cross-border investigation teams in East and southern Africa
  • Asset recovery: establishing a series of dialogue events between African and European countries on asset recovery

Last update: January 2022

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