Global Financial Integrity

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Moving Towards a Clear SDG to Halve Trade Misinvoicing by 2030


Mexico and Bangladesh Voice Support for a Clear Target on Curbing Illicit Financial Flows on the Sustainable Development Agenda

The United Nations is in the process of forming the post-2015 development agenda. These proposed Sustainable Development Goals (SDGs) will eventually replace the Millennium Development Goals (MDGs) that were agreed upon for 2000-2015. As with the MDGs, the SDGs will inform which development issues take priority in the coming years.

Sustainable Development Goal 16.4, as is currently proposed by the UN’s Open Working Group, calls on the international community to:

“by 2030 reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime.”

Global Financial Integrity (GFI) applauds the Open Working Group for considering illicit financial flows in its proposal. Though Goal 16.4 is definitely a start in the right direction, it is not exclusively focused on illicit financial flows, nor is it measurable in the least. GFI proposes the following as an alternative:

“by 2030, reduce illicit financial flows related to trade misinvoicing by 50%.”

This goal targets a specific problem – not just illicit financial flows, but trade misinvoicing in particular – and is definitely measurable. While there are other components of illicit financial flows, GFI’s research has found that illicit financial flows drain nearly US$1 trillion from developing and emerging economies each year, with trade misinvoicing accounting for nearly 80 percent of those illicit outflows from 2002-2011.

Combating trade misinvoicing is by far the most impactful way to curb illicit financial flows.

There is consistent and growing interest in the need to curtail illicit financial flows; a consensus is forming that these flows are incredibly harmful to the prospects of developing countries. Mexico’s Director General for Global Issues, Roberto Dondisch, stated at the United Nations on November 12th, that a Sustainable Development Goals target on illicit financial flows is key “to the necessities of developing countries.”

In a presentation at the World Bank on October 11th, Atiur Rahman, the Governor of the Central Bank of Bangladesh, spoke about the importance of focusing on illicit financial flows in the Sustainable Development Goals:

“The upcoming 2015 global sustainable development agenda will require massive mobilization of new investment resources for the developing countries. Given the realities of official development assistance…developing countries will need to rely mainly on domestic resource mobilization. One window of opportunity for significant broadening their domestic resource bases is that of blocking illicit financial outflows.”

Dr. Rahman added:

“I’m truly on board with [GFI] on [halving] the amount of [trade] misinvoicing” by 2030.

With that in mind, we’ll keep pushing. The Sustainable Development Goals must include a separate, measurable, and impactful goal related to illicit financial flows.