UN agencies finalise framework to measure illicit financial flows

The United Nations Conference on Trade and Development (UNCTAD) and the United Nations Office on Drugs and Crime (UNODC) have finalised a conceptual framework for the statistical measurement of illicit financial flows (IFFs).

Pilot projects are either underway or due to commence soon using the new framework to calculate the costs of illicit trade and business practices in Afghanistan, Colombia, Ecuador, Mexico, Nigeria, Panama and Peru.

Extensive consultations

The framework is the result of extensive expert consultations held in 2017-2018 and reflects the considerations of an international task force in 2019-2020 involving international organisations and national tax, customs and statistics experts.

The framework identifies four main types of activities that can generate IFFs: illicit tax and commercial activities; illegal markets; corruption, and exploitative activities and financing of crime and terrorism.

Official statistics

“For the first time, we have an agreed upon definition of illicit financial flows for statistical measurement,” UNCTAD chief statistician Steve MacFeely says.

In an apparent response to several estimates of IFF’s by non-profit organisations and others, he adds that it is important for official statisticians to take the lead in measuring IFFs. Only official statistics provide objective, independently produced and comparable information on IFFs to guide policy making.

“Next, we will prepare guidance for pilot countries to help them assess the types of IFFs relevant in their context, review data availability and select best methods to measure IFFs in line with the conceptual framework,” MacFeely says.

More pilot projects

Pilot projects using the new framework are already underway in Afghanistan, Colombia, Ecuador, Mexico, Nigeria, Panama and Peru.

More pilot projects using the framework are planned to start in 2021 in other African and Asian nations.

UNCTAD and UNODC’s conceptual framework for the statistical measurement of illicit financial flows can be found here.



Categories: Trade Based Financial crimes News

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