International Drivers of Corruption

Some global mechanisms allow corruption to be a profitable crime. Find out how to deal with the negative impact this brings to developing countries.

Globalisation has been beneficial in many ways. However, the structures that facilitate legitimate businesses and international financial transactions are also used for illicit purposes: laundering proceeds of corruption, generating illicit flows out of development countries, paying bribes or evading taxes. These mechanisms create incentives for corrupt behavior in developing and developed countries and need solutions at local and international levels.

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Illicit financial flows and their impacts on development

Lecture by Raymond Baker from Global Financial Integrity (1 Oct 2010)
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Author: Financial Action Task Force
Release date: July 2011

FATF Report: Laundering the Proceeds of Corruption

Politically Exposed Persons (PEPs) are at an advantage when it comes to using money laundering mechanisms to hide stolen funds. Not only they have access to intermediaries capable to advise them on how to do it but they also, in general, control institutions in their own country, which facilitates access to financial markets and allows them to block attempts to investigate stolen assets. This FATF report analyses the most common methods employed by PEPs to launder proceeds of corruption and reviews the weaknesses in the anti-money laundering system that need to be addressed in order to reinforce it against abuse.

Author: J.C. Sharman
Release date: November 2010

Shopping for anonymous shell companies: An audit study of anonymity and crime in the international financial system

Anonymity of bank account, shell companies and trusts are products usually associated with the island tax havens. However, as this study shows, many of the providers of such services are still located in OECD countries. Out of 54 attempts to establish a shell company and an anonymous account conducted by the author in 22 countryes, 17 offered to deliver on such services -- and 13 out of this pool were companies set up in rich economies.


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