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U4 Practitioner Experience Note

Twenty years with anti-corruption. Part 5

Money laundering and illicit financial flows – the ‘getaway car’ of corruption

Combatting money laundering and flows of illicit finance is central to the global response to corruption. These are the means by which criminals enjoy the fruits of their wrongdoing. Yet development agencies remain relative newcomers to the field, not least because the anti-money laundering/illicit finance problem presents major challenges to donors’ ways of working. There also continues to be much debate over what should be included in the term ‘illicit financial flows’ – and over methods to measure them. Without better means for countries to know how each is affected by illicit finance, policy responses risk not fitting the actual problem.

18 June 2020
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Twenty years with anti-corruption. Part 5

Main points

  • Developing countries are keen to include ‘abusive’ commercial practices such as tax evasion and avoidance, transfer pricing, and profit shifting as part of illicit finance. By contrast, developed country governments and companies hold that apart from tax evasion, such practices are not automatically illegal. This definitional problem means the foundation for concerted international co-operation is weak.
  • Dealing with IFFs is problematic for donors. There are profound obstacles to accommodating this work in normal donor practice, meaning that the developmental damage of illicit finance has often been overlooked.
  • Methods for measuring IFFs are a source of much debate. A consensus to better measurement is urgently needed if governments are to make correct policy responses.

Cite this publication

Mason OBE, P.; (2020) Twenty years with anti-corruption. Part 5. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Practitioner Experience Note 2020:5)

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About the author

Phil Mason OBE

Phil Mason OBE was senior anti-corruption adviser in DFID from 2000 until March 2019. He formally retired from the UK public service after 35 years, 31 of which were with ODA/DFID. He continues in the anti-corruption field in an independent capacity.


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)