Illicit financial flows easier during coronavirus crisis

Illicit financial flows (IFFs) will be easier to arrange during the coronavirus crisis according to an expert on the linkages of corruption, state fragility, illicit finance and US national security.

Jodi Vittori, a non-resident scholar in the Democracy, Conflict, and Governance Programme at the Carnegie Endowment for International Peace says law enforcers are too busy dealing with the fallout from the crisis while the criminal entities that thrive on IFFs see the disruption as an opportunity.

She warns that unless banks, governments, and multilateral institutions take action, the US will witness increased corruption and criminal activity.

Corruption can thrive

Vittori says one reason that IFFs can increase is that the coronavirus crisis is an environment in which corruption can thrive.

“Government outlays of tremendous amounts of money to procure resources and services, often without enough transparency and oversight, mean plenty of open doors for bribes, kickbacks, and contract malfeasance,” she says.

Foreign aid abuse

Foreign assistance associated with relieving the worst of the pandemic outside the US is ripe for misappropriation Vittori argues.

She says misallocated funds will be laundered and moved through the international financial system while transnational criminal organisations will still engage in money laundering and other illicit financial activity to maintain their criminal supply chains.

Jodi Vittori’s analysis, Illicit Financial Flows Will be Easier During the Coronavirus Pandemic, can be found here.

Categories: Trade Based Financial crimes News

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