How enablers facilitate illicit financial flows: Evidence from Africa…

African nations, both independently and collectively, have made commitments to combat illicit financial flows and recover stolen assets. They should undoubtedly intensify efforts to fulfil these pledges. However, because of the cross-border nature of illicit financial flows, it is essential to close loopholes in the frameworks of countries that act as transit or destination points for funds leaving the continent.

While the sample of cases we analysed is not representative of the wider phenomenon of illicit financial flows from Africa, the outcomes of this study align with prior research on the crucial features of corruption and associated money laundering: foreign enablers and opaque corporate structures.

Our findings underscore the need to subject professionals providing these high-risk services to anti-money laundering obligations. Lawyers, accountants, corporate service providers and other professionals who are engaged in activities that could be abused by corrupt individuals and money launderers are in a privileged position to detect suspicious behaviour. They should be required to do so.

Globally, governments need to supervise and inspect these professionals more effectively. Those found to be complicit should be investigated and prosecuted. In particular, governments of countries offering offshore services should increase regulatory and supervisory efforts of enablers.

When it comes to corporate secrecy, governments that have not yet done so must set up centralised registers to record and track companies’ beneficial owners – that is, those who really own and control companies. It’s also crucial that they provide the public with adequate access to information on companies’ beneficial owners. At a minimum, all those who have a role in preventing, detecting and following up on cases of possible financial crime – including authorities, civil society, media and enablers themselves – should have such access to the data.

Simultaneously, the international community needs to increase pressure on financial centres to adequately implement beneficial ownership transparency reforms. They should encourage countries that have chosen against making beneficial ownership registers widely accessible to ensure that at the very least foreign competent authorities are able to directly consult them. The upcoming conference of signatories to the UN Convention against Corruption is a crucial and immediate opportunity to do so.

For too long, non-financial enablers have flown under the radar. It’s time to put them under the microscope and close the loopholes that they exploit to aid the corrupt.

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