Citation:Bernd Otto Schlenther , (2016) «Addressing illicit financial flows in Africa: how broad is the whole of government approach supposed to be?», Journal of Financial Crime, Vol. 23 Iss: 4, pp. –
Abstract:
Purpose
This paper identifies the underlying key components of IFFs and highlights the priority areas where government resources should be pooled under a whole of government approach to mitigate the risks posed by IFFs. These areas are tax avoidance and tax evasion (specifically intra-company profit shifting, investment and profit shifting within the extractive sector, fraud and beneficial ownership), anti-corruption measures, governance and accountability measures, anti-money laundering effectiveness and effectiveness in the detection of falsified customs declarations.
Design/methodology/approach
The concept of “illicit financial flows” (IFFs) is emerging as an umbrella term for bringing together seemingly disconnected issues. The concept is ill defined but there are various identifiable components supporting the term IFF such as capital flight, corruption, money laundering, tax avoidance, tax havens, and transfer pricing practices. The author identifies the key areas of concern through a literature review and makes recommendations on prioritization of short to medium term risk areas and long term policy imperatives.
Findings
In the short to medium term, an effective “whole of government” approach should be based on uniform risk identification and prioritization between mandated government agencies and in the long run, it should be focused on building responsive and effective institutions through a process of good governance and effective taxation.
Originality/value
A large body of literature deals with “IFFs” and the “whole of government approach” as separate concepts. This paper draws on the existing literature and identifies priority areas for addressing IFFs and, for these to be successful, they are entirely dependent on a whole of government approach – both in the short and long run.
Publisher:Emerald Group Publishing Limited