18th International Anti-Corruption Conference

Stemming illicit financial flows (IFFs) is key to achieving sustainable development. This requires serious efforts to combat financial crimes that emanate from criminal activities like tax evasion and corruption. Unless there is an effective response, these IFFs undermine domestic mobilisation efforts in a country and hence are an impediment to the sustainable development goals. This is particularly harmful to the developing countries, where IFFs divert resources that could otherwise be invested in long-term development.

But law enforcement structures in place to combat financial crimes have not evolved at the same speed to keep pace with highly sophisticated criminal activities like tax evasion and corruption. Modern technology is enabling criminals to covertly move substantial sums between multiple jurisdictions with relative ease and great speed. Layers of offshore opaque asset ownership chains can obscure and frustrate the efforts of law enforcement, as can emerging technology like crypto-assets.

Anti-corruption authorities cannot combat this alone. As crimes cross agencies’ mandates, more integrated models of co-operation between agencies need to be developed. An effective Whole of Government approach is the key to meet these challenges, with anti-corruption agencies, tax authorities, customs, police, prosecutors, anti-money laundering agencies and regulators working effectively and on the same side. Each of these must not only discharge their immediate obligations with integrity, but have a mandate and the resources to fight financial crime more broadly.

Neither can individual countries combat this alone. As crimes cross international borders, countries need to co-operate to share intelligence and information. In a globalised economy, criminals will have an advantage over law enforcement by quickly moving beyond national borders, unless countries are working together to level the playing field. For example, transparency and international exchange of information on beneficial ownership is critical to preventing and exposing corruption and illicit financial flows. The gains made in reducing bank secrecy need to be realised. Although mechanisms for international co-operation exist, they need to be used more effectively if financial crimes are to be tackled.

Concrete action can be taken – but it requires a sustained commitment from the political leadership and senior government officials. Some countries have proven the benefits of a domestic whole of government approach, and the importance of international co-operation. For example, the OECD and World Bank will present the findings of their joint Report on Improving Co-operation between Tax Authorities and Anti-Corruption Authorities in Combating Tax Crime and Corruption, which shows that when the many
opportunities for cross-agency co-operation are used, they can have a big impact on financial crime. But these are generally not being pursued domestically, and even less so internationally – and it needs to change.

This session will explore the political and practical challenges in busting the silos and fighting financial crime co-operatively, both domestically and internationally. It will identify what needs to change within governments as part of galvanising the global response to tackle corruption and financial crime.