llicit financial flows: the “Stolen” Capital Wealth / Prof Madya Dr. Eley Suzana Kasim

Illicit financial flows (IFFs) are illegal or illicit transfer of financial capital from one country to another in violation of national or international laws. The Global Financial Integrity (GFI), a US-based think tank focused on issues of illicit financial flows, corruption, illicit trade and money laundering, defines IFF as funds that are illegally earned, transferred, and/or utilized across an international border. This definition suggests that flow of funds can be considered as illicit in three ways. Firstly, an IFF can occur due to the origin of the transferred funds. For example, when funds are generated through criminal activities such as bribery, money laundering, illegal arms dealings, wildlife or human trafficking, the funds obtained are obviously illegal. Secondly, an IFF can occur from legitimate commercial activities such as when it involves hiding of wealth, tax evasion, and trade mis-invoicing. Finally, a flow of funds can be illicit when it is used for illegal purposes such as terrorism financing.