Illicit Financial Flows – What are Illicit Financial Flows IFFs?

Illicit financial flows are the cross-border movement of money that is illegally earned, transferred, or utilized.

Illicit financial flows (IFFs) generally involve the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities.

According to the latest update of Global Financial Integrity’s 2012 report, ‘Illicit Financial Flows from Developing Countries: 2001-2010’, it is estimated that at least US$859 billion left the developing world in 2010 in illicit financial flows.

Illicit-Financial-Flows-Report-Dec-2012

From 2001 to 2010, developing countries lost US$5.86 trillion to illicit outflows.

The Top 10 countries with the highest measured cumulative illicit financial outflows between 2001 and 2010 were:

    • China: US$2.74 trillion
    • Mexico: US$476 billion
    • Malaysia: US$285 billon
    • Saudi Arabia: US$210 billion
    • Russia: US$152 billion
    • Philippines: US$138 billion
    • Nigeria: US$129 billion
    • India: US$123 billion
    • Indonesia: US$109 billion
    • United Arab Emirates: US$107 billion

The heat map below shows the total cumulative outflows of Illicit financial flows 2001-2010

Illicit-Financial-Flows-Heat-Map-2012

Asia still remains the primary driver of illicit flows from developing countries led by China. In fact, five of the ten countries with the highest illicit outflows are in Asia (China, Malaysia, the Philippines, India, and Indonesia).

The countries with the ten highest outflows are China, Mexico, Malaysia, Saudi Arabia, Russia, the Philippines, Nigeria, India, Indonesia, and the United Arab Emirates in declining order of magnitude. Cumulative outflows from China (US$2,742 billion) exceed total cumulative outflows from all other nine countries (US$1,728 billion). The top ten countries account for 76.2 percent of cumulative illicit flows from all developing countries over this period.

To read the GFI report see: http://iff.gfintegrity.org/iff2012/2012report.html