By Tom Cardamone, Jr., March 18, 2015
The “Zero Draft” of the Financing for Development Conference Outcome Document Should be Improved to Aim to Halve Illicit Flows from Trade Misinvoicing
On Monday, the United Nations released a so-called “Zero Draft” of the Financing for Development (FfD) Conference Outcome Document. Simply stated, this draft lays out the current political consensus on a vast array of development issues including how to address the growing problem of illicit financial flows (IFFs). It is by no means the final word on IFFs—or any other issue for that matter—but it gives a good indication where things are heading.
The draft proposes three specific steps to address IFFs, including:
- Developing “a proposal for an official definition of IFFs”,
- Developing “a proposal to publish official estimates [of IFF] volumes and breakdown,” and
- An international effort to “substantially reduce” the flow of IFFs.
These measures go a long way toward addressing a problem that has captured the attention of the development community over the last few years. For example, in 2013 the World Bank noted that “there is little doubt” that IFFs have a caustic effect on development, and last year the African Union noted that “it is imperative to curtail” illicit flows.