Illicit Financial Flows in the Mekong
January 2024
Research Paper 30
Kristina Amerhauser, Global Initiative Against Transnational Organized Crime (GI-TOC)
SOC ACE Project: Unlocking the black box of political will on IFFs: going beyond technical responses
PUBLICATION SUMMARY
IFFs are a serious concern in the Mekong region, which includes Cambodia, Lao People’s Democratic Republic (PDR), Myanmar, Thailand and Vietnam. Facilitated by state-embedded actors, each year vast amounts of illicit proceeds are generated, moved and laundered across the region and beyond in offshore tax havens. This distorts the local economies; deprives the state of income needed for health, education and infrastructure; and deepens inequality.
This paper contributes to the comparative research phase of a broader project aiming to understand the challenges of countering IFFs. The project aims to better understand what enables IFFs, whether there is political will to address IFFs and what interventions have been successful in addressing IFFs as part of a politically sensitive approach.
Building upon the initial evidence review conducted in project’s first phase of the project, Reitano (2022) proposed the ‘IFFs pyramid’, a new framework of analysis of IFFs, to explain the three dominant means by which IFFs are enabled, moved and held: financial flows, trade flows and informal flows.
This phase tests and applies the ‘IFFs pyramid’, in the context of East and southern Africa and the Mekong region. Based on a review of secondary literature, this paper provides an overview of financial flows, trade flows and informality and discusses how IFFs manifest across the Mekong.