Institutional Reform Goals: Illicit Trade-Related Flows

(Click on the above link to access this discussion paper, authored by Esther Shubert, Yale University, for ASAP)

Summary: Reforming the rules and regulations that facilitate illicit financial flows would have a major impact on human development. For this reason, ASAP believes that illicit financial flows are a crucial item for the international community to address in the post-2015 development agenda. This discussion paper focuses specifically on the rules and regulations that allow for illicit trade-related flows (as opposed to criminal and corrupt flows), and especially on the practice of corporate tax abuse (tax evasion and avoidance). It reviews measures currently in place or under discussion by the international community to address illicit trade-related flows. It then makes six policy recommendations for inclusion in the post-2015 agenda: reform the arm’s-length transfer pricing system; reform international accounting standards; implement universal automatic exchange of information; require public registers of beneficial ownership; increase rate of stolen asset repatriation; and increase ODA for capacity-building on matters of tax.

This report was written thanks to the generous support of Canada’s International Development Research Center (IDRC).


Curbing Illicit Financial Flows: The Post-2015 Agenda and International Human Rights Law

A report on illicit financial flows from The Hague Institute for Global Justice.


The New Haven Declaration

The initial signatories of the New Haven Declaration convened at Yale University in New Haven, Connecticut, USA on December 8, 2010. The New Haven Declaration on on Corporate Financial Transparency is the result of that meeting in New Haven. Shortly following the December 8th meeting, several participants—with over US$20 billion under management—sent a letter (PDF) to the European Commission asking them to “require country-by-country reporting within the annual audited financial statements of all multinational corporations listed on a stock exchange.”


Backgrounder: Illicit Financial Flows and the Post-MDG Agenda

An introduction to illicit financial flows: 1 trillion dollars were spirited out of developing countries in 2010 in the form of illicit financial flows. llicit financial flows (IFFs) refer to money that is illegally earned, transferred, or utilized. This money is strategically shifted from developing economies and into the global shadow financial system through various channels including trade mispricing, smuggling, corruption, and money laundering.