Contents

Introduction

Illicit Financial Flows (IFF) is an umbrella term for a group of harmful, cross-border economic or financial transactions where capital is illicitly acquired or transferred.

They encompass:

  1. Proceeds of crime and illegal markets

  2. Theft of state assets and corruption

  3. Market and commercial abuse

In addition to depleting foreign exchange reserves and eroding tax revenues, illicit financial flows worsen poverty, undermine the rule of law, and weaken state institutions.

Policy background

In 2011, the 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/UNECA) mandated the establishment of a High Level Panel on Illicit Financial Flows from Africa, chaired by Thabo Mbeki.

The panel produced a flagship report in 2015 establishing the scale and severity of the problem in the continent. In 2015, the 24th Assembly of the African Union endorsed the findings of the report and resolved to combat IFF out of Africa.

In 2019, the United Nations Economic Commission for Africa (UNECA) produced new estimates of trade-based illicit financial flows. These estimates are used to support policy reform in the region, including a multilateral project aimed at presenting trade mis-invoicing in 6 pilot African countries: Egypt, Nigeria, Senegal, South Africa, Tunisia and United Republic of Tanzania.

Unsupervised Machine Learning on Illicit Trade Activity Set-up of this Jupyter Book