Illicit Financial Flows from Developing Countries

Measuring OECD Responses

image of Illicit Financial Flows from Developing Countries

This publication identifies the main areas of weakness and potential areas for action to combat money-laundering, tax evasion, foreign bribery, and to identify, freeze and return stolen assets. It also looks at the role of development agencies and finds that the potential returns to developing countries from using ODA on issues like combating tax evasion or asset recovery are significant.  Finally, it identifies some opportunities for a scaled-up role for development agencies.



Role for development agencies in combating illicit financial flows from developing countries

Combating illicit financial flows (IFFs) from developing countries is an increasingly important area of work for development agencies. This chapter highlights current initiatives by bilateral development agencies to tackle corruption and money laundering, reduce tax evasion and avoidance, and support civil society efforts to deal with IFFs. The scale of donor support is relatively modest and development agencies are not exploring the full range of options for supporting this complex agenda. Development agencies could play a greater role mainly on the ground in developing countries where they must continue to help build technical expertise and the capacity to negotiate and use exchange of information agreements, tackle abusive transfer pricing and investigate economic crime. They should also support civil society organisations in holding governments to account and generating pressure for reforms. They could also support further research into illicit financial flows, maintain political momentum within OECD countries to ensure that current reforms have a development dimension and undertake proper risk assessment to target aid to where it is most needed.


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