China’s belt and road initiative to fuel IFFs and TBML

China’s belt and road initiative (BRI), the massive global infrastructure development strategy aimed at reshaping global trade routes, has improved transport corridors according to a report published by Global Financial Integrity (GFI) and London university’s Kings College.

But these improved supply routes are fuelling illicit financial flows (IFFs) and criminal exploitation because the BRI has not been designed and implemented with the aversion of crime in mind according to the report, Everything Everywhere All at Once.

It also concludes that increased trade along the BRI will lead to more trade-based money laundering (TBML) that will prove hard to detect due to data deficiencies.


The absence and purposeful manipulation of trade data in countries that are part of the BRI increases the challenge of detecting TBML and illicit activity across supply chains according to the report.

Improved trade facilitation meanwhile only exacerbates pre-existing limitations in supervision, oversight and enforcement in free-trade zones (FTZs), while new transhipment schemes may make it easier to mask the origin of products according to the authors.

They say an increase in trade means consequent growth in TBML activities including opportunities for newer and more innovative black market peso exchange schemes to launder proceeds from drug trafficking in the European Union.

Stretched supply chains

Projects in the initiative render supply chains more stretched and complicated, thereby increasing opportunities for illicit activity and criminal exploitation according to the report.

It says that expansion of the initiative meanwhile creates more rent-seeking opportunities among political elites in BRI partner countries and makes the environment more vulnerable to corrupt practices in customs and border agencies.

Future threats

The report concedes that the impact of the BRI on increasing illicit trade flows at present is negligible.

But it concludes that improved road and railway transportation may deliver illegal commodities faster and with more regularity while new BRI infrastructure projects may attract the migration of illicit actors, who intend to profit from the economic growth as a result.

More information on the report, Everything Everywhere All at Once, can be found here, from where it can also be downloaded.


Categories: Trade Based Financial crimes News

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