Combating Illicit Finance

The threat posed by illicit finance is not new, nor limited to state actors. Indeed, illicit finance is what enables criminals to profit from heinous crimes and to finance terrorism. It can cause immense financial and human harm to individuals, communities, taxpayers, governments, and the wider society. It is often the most vulnerable, for example those living in poverty or in jurisdictions blighted by corruption, at greatest risk. Moreover, the scope of illicit finance is broad. It includes, among others, corruption, money laundering, terrorist financing and fraud, and the statistics paint a frightening picture. Globally, the United Nations Office for Drugs and Crime has estimated the amount of money laundered annually at 2% to 5% of global GDP, putting the total at US$1.9 to US$4.9 trillion.

While these system challenges are considerable, there is growing consensus among policymakers, regulators, law enforcement and the private sector that systemwide reform is essential. There is a growing shift in sentiment and momentum for change around the globe, driven by new legislation, policy changes and public/private sector partnerships. Although the challenges are considerable, policy makers, regulators, law enforcement, and the private sector recently have made some progress in developing solutions.

The global response to illicit finance is at an inflection point. The scale and impact of illicit finance activity is growing, and the poor outcomes being achieved against the threats resulting from it are such that more can be done. A whole system approach is needed with all ecosystem stakeholders (regulators, supervisors, law enforcement, policy makers) enabled to maximize the impact they can have on delivering outcomes against criminals. Some recommendations for change include: Prioritizing clear system leadership, which means having a system leader that can bring together the whole ecosystem to create a cross-industry response to a cross-industry problem, with collaboration to drive forward toward an agreed ambition; Improving information-sharing amongst both justice officials as well as public and private stakeholders; Enabling faster action by reducing duplicative processes; Boosting public sector funding; Improving rates of asset recovery, by bringing investigators with high-end skills to the table—forensic accounting, asset tracing, cyber, and an ability to access and analyse open-source intelligence and finally; Enhancing transparency of data sharing of registries.