A new report, Illicit Finacial Flows and Colombia has been published by the Economist Intelligence Unit (EIU) in collaboration with Colombian non-governmental organisation (NGO) Cedetrabajo, and US-based lobby and research group, Global Financial Integrity (GFI).

The report quotes GFI estimates that the Colombian government lost US$2.8 billion in revenue to trade misinvoicing in 2016, revealing a value gap of US$10.8 billion between the trade values reported by Colombia and those reported by all of its trading partners in 2016.

GFI estimates that illicit outflows from Colombia due to misinvoicing totalled US$6.1 billion, while illicit inflows reached US$4.8 billion in 2016.

Favourable misinvoicing environment

Examining the illicit financial flows most impacting Colombia today, the EIU found that the country’s significant informal economy provides a favourable environment for illicit activities of many types.

These include trade misinvoicing, grand corruption, tax evasion, smuggling and transnational crime.

Influencing factors

Additional factors – ranging from the cultural and geographic to institutional and economic – explain the scale of criminal activities in the country the report finds.

It says these factors include an inefficient legal system (which processes only five per cent of crimes), a lack of effective state presence in vast areas of the country and the long-standing presence of illegally armed groups.

The groups, that include leftist guerrillas, right-wing paramilitaries and other criminal organisations, are among the principal factors behind the crimes that generate illicit financial flows impacting Colombia.

Categories: Trade Based Financial crimes News