Context
Illicit financial flows (IFFs) are a complex global challenge. The term refers to financial flows that are illicit due to their origin (for example from environmental crime), their utilisation (such as funding terrorism) or the purpose of the transfer itself (money laundering, for instance).
IFFs have a particularly devastating impact on low-income countries and undermine international efforts to affect lasting positive change. In addition, illicit activities linked to IFFs destabilise societies and increase the risk of violent conflict.
Countries around the world lose trillions due to IFFs every year. This in turn hinders urgently needed investments in public services.
Furthermore, a country’s access to international funding depends in part on its ability to prevent ‘dirty money’ from finding its way into its financial system.
Objective
Global, regional and national systems for the development-oriented fight against illicit financial flows are strengthened.
Approach
The program pursues a holistic approach against illicit or legally questionable financial transfers (‘follow the money’). Since IFFs transcend national borders, the program is promoting more standardised policies against money laundering and terrorist financing nationally, regionally and globally.
To that end, the program implements the following measures with a focus on Africa, Latin America and the Western Balkans:
- To prevent illicit financial flows, it collaborates with partners to improve their regime in accordance with international standards. North Macedonia, for example, established a beneficial ownership register.
- In the field of financial investigation, the program advises law enforcement authorities on innovative investigative techniques. Peru, for instance, is using artificial intelligence and various other digital approaches to identify and trace IFFs.
- The program is also encouraging cross-border cooperation to ensure that stolen assets are recovered. As part of this effort, it has established the ARINs’ Talk – an informal exchange platform for asset recovery interagency networks.