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Corruption (e.g. bribery of state officials and theft of state assets) and outright criminal activity (e.g. drug trafficking and human trafficking) are important contributors to Illicit Financial Flows, estimated respectively at 5% and 30%. But, corporate commercial activity particularly stands out as the biggest culprit – accounting for as much as 65% of all illicit outflows.

 

The main mechanism through which corporates are bleeding the continent is through trade mis-invoicing – the practice of misrepresenting the price or quantity of imports or exports in order to hide or accumulate money in other jurisdictions. This way, companies, especially multinationals evade taxes, avoid customs duties, transfer kickbacks and launder money.

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