Illicit Financial Flows in the Arab Region - ESCWA

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Illicit Financial Flows in the Arab Region cover

ESCWA Publication: E/ESCWA/EDID/2018/TP.1


Publication Type: Information material

Cluster: Shared Economic Prosperity

Focus Area: Financing for development, Trade & regional connectivity

Initiatives: Integrated national financing frameworks

Keywords: Debt, Fiscal policy, International trade

Illicit Financial Flows in the Arab Region

January 2018

Illicit financial flows (IFFs) are constantly evolving outpacing detection at every corner. IFFs undermine the rule of law, distort macro-economic stability, and raise severe security complications for the Arab region. These flows constitute substantial leakages to domestic public revenues that could have otherwise been harnessed to finance national and regional efforts devoted to achieving the 2030 Agenda for Sustainable Development. 

Measuring IFFs is a challenge, not least since no tool or process can effectively measure the clandestine nature of the underlying activity. Precision in this field remains unachievable. Beyond deliberate collusion, several factors explain why gaps in trade statistics exist. Some argue that trade gaps may not be a useful entry point to estimate misinvoicing. Others demonstrate that gaps in reported trade statistics are neither erratic nor a statistical fiction, and that deliberate misinvoicing is a significant component of gaps in reported trade statistics.

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