The fight against illicit financial flows
The fight against illicit financial flows: a challenge for development - Briefing
Author: Marta LATEK
Date of publication: August 2018
Author: Marta LATEK
Date of publication: August 2018
The repeated financial scandals revealed in the media, like the Panama Papers, have intensified the public debate on tax havens, tax evasion and illicit capital flight. Uncertainly difficult to estimate, illicit financial flows (IFFs), ie funds received, transferred or used illegally beyond the borders of a country, are a phenomenon of great magnitude, diverse forms and feeding on the opacity of the international financial structure. Although it spares no country, its impact is felt most heavily in the poorest countries. Indeed, FFIs transfer wealth that could have been invested locally, burden already low government revenues, and corrupt state institutions, thereby helping to maintain or exacerbate levels of poverty and inequality.
International action, a necessary complement to any domestic policy to address IFFs that cross borders, has proliferated but lacks coherence and universality. The lists of tax havens established by the OECD and the European Union are very succinct, whereas in practice many jurisdictions, often in developed countries, continue to operate in this way. While developing countries lack about $ 2.5 trillion to invest in achieving the 2030 Sustainable Development Goals, a more effective fight against IFFs should be a priority, as the European Parliament has pointed out several occasions.
[Text in french]