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Using datasets of licit financial movement to estimate illicit financial flows

Given the clandestine nature of illicit financial flows, attempts to measure their scale and volume typically adopt an indirect approach. Current measurements are mainly based on estimates derived from irregularities in datasets of licit financial movements, including capital flows and trade flows. Though useful in providing estimates of illicit financial flows, there are challenges in using these datasets. These include the unreliability of data used, as well as the limitations of the datasets in estimating illicit financial flows related to corruption and other criminal activities.

9 July 2020
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Main points

  • Measuring IFFs is a challenging task, and estimates are mainly based on irregularities in data rather than direct measurement.
  • The main datasets used include the IMF’s Direction of Trade Statistics and Balance of Payments data, United Nations Commodity Trade Statistics Database, Bank for International Settlements datasets, Foreign Affiliates Statistics and Foreign Direct Investments datasets.
  • A major challenge in estimating IFFs from these datasets is the reliability of the data used. For instance, some IFF calculations have been revised due to the inaccuracy of data used.
  • Most datasets cannot be used to measure crime and corruption-related IFFs, and these types of IFFs are mainly measured using data from investigations, suspicious transaction reports, prosecutions, convictions or surveys.

Cite this publication


Duri, J.; Rahman, K.; (2020) Using datasets of licit financial movement to estimate illicit financial flows. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2020:18)

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About the authors

Jorum is a Research Coordinator at Transparency International, with his primary responsibilities at the Anti-Corruption Helpdesk.

Kaunain received her Master's in Corruption and Governance from The Centre for the Study of Corruption at the University of Sussex in the UK where her focus area of research was corruption in international business. She works as Research Coordinator at Transparency International (TI), and her main responsibilities lie with the Anti-Corruption Helpdesk.

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

Keywords


illicit financial flows, datasets