Global Financial Integrity

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Tagged ‘Illicit Financial Flows’

The Need for a Clear SDG Target on Illicit Financial Flows

GFI Calls for the Adoption of a Sustainable Development Goal (SDG) Aimed Strictly at Halving Illicit Financial Flows from Trade Misinvoicing by 2030

Since the beginning of the year, the UN’s Open Working Group (OWG) has been wrestling with a nearly herculean task: to winnow a set of roughly 200 suggested Post-2015 sustainable development goals (SDGs) down to about a dozen.  The process will culminate with the list being presented to the UN General Assembly (UNGA) during its annual meeting in September.  The UNGA will then have one year—until the next UNGA meeting—to consider and, perhaps, amend the list.  By September 2015, the international community’s roadmap toward sustainable development will be set in stone for the next 15 years.  Simply put, there is a lot riding on what the OWG does in the next three months.

The current list of potential OWG recommendations covers the gamut from reductions in corruption to significant improvements in clean water, education and health care.  While Global Financial Integrity (GFI) is pleased to see that the OWG has included a target to reduce illicit financial flows (IFFs)—which are estimated at close to $1 trillion annually—we believe the language as currently drafted is flawed.

As written, the IFF target (goal 16.3) is coupled with numerous other issues—including reductions in organized crime, human trafficking, and drug smuggling—making it unwieldy, unmeasurable and, as a result, unachievable.  We believe a concise SDG target on IFFs will have a far greater chance of being proposed by the OWG and approved by the General Assembly.

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From Monetary To Fiscal Dominance: Implications For Illicit Financial Flows

Time is running short for recipient countries to curtail illicit financial outflows and for developed countries to implement stricter oversight of banks and offshore financial centers that absorb these flows. Developing countries cannot count on a continued increase in bilateral assistance to offset the erosion of real values through inflation let alone counteract the reduction in aid effectiveness due to unrecorded leakages of capital.

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