Nearly $20bn flowed illegally out of Myanmar between 1960 and 2013, according to a report by Global Financial Integrity (GFI).

The non-profit watchdog over illicit financial flows says that smuggling of imports via fraudulent misinvoicing accounts for 71% of Myanmar’s illicit inflows while illicit outflows average 6.5% of Myanmar’s official GDP.

Economic damage

Trade misinvoicing accounted for the majority of the country’s illicit financial outflows (59.6%) and inflows (89.2%) over the 54-year period analysed.

Myanmar’s underground economy averaged 55.1% of country’s GDP. The economy is essentially driven by illicit inflows and outflows according to GFI, which says that tax losses due to illicit flows exceed the country’s public spending on healthcare.

Urgent measures

GFI is calling for the matter to be addressed by a concerted effort incorporating customs enforcement, transparency measures and political will.

In addition to estimating illicit flows of capital to and from Myanmar, the study also estimates that broad capital flight – a combination of both legal and illicit flows – amounted to $35.9bn in outflows between 1960 and 2013.

More information about the GFI report – including Excel files with the report’s data – is available on the GFI website here.

A PDF of the full report can be downloaded here.

Categories: Trade Based Financial crimes News

Tags: AML, misinvoicing