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May 19, 2019

Pakistan urges more global cooperation to plug illicit financial flows

National

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APP
May 19, 2019

UNITED NATIONS: Pakistan has called for "more coherent" collaboration at the national and the international levels to prevent and counter illicit financial flows (IFFs) of the illegal movements of money or capital from one country to another.

"My government's firm resolve against corrupt practices calls for a more proactive role by our partners, in line with international legal instruments, including the United Nations Convention Against Corruption (UNCAC)," Ambassador Maleeha Lodhi told a high-level meeting on the growing problem of illicit financial flows that adversely affect economic progress, especially in the developing countries.

"It (IFFs) is a key contributory factor for the economic under-performance of developing countries and a major obstacle to poverty eradication," the Pakistani envoy said.

According to the estimates of UN Office on Drugs and Crime (UNDOC), illicit financial flows, stemming only from criminal proceeds, amount to around 2.1 trillion dollars annually. That, Ambassador Lodhi said, was almost equivalent to the annual financial gap of 2.5 trillion dollars faced by developing countries in investment in core sustainable development goals-related sectors.

Developing countries are disproportionally affected by the negative consequences of illicit financial flows, Ambassador Lodhi said, pointing to their lack of capacity and resources to prevent and counter these flows.

"Estimates of Pakistan's stolen financial resources stashed abroad run into millions of dollars, for which we seek international cooperation to complement our intensified domestic efforts." Multinational companies using the resources of developing countries for profits should also contribute to their development, she said.

The Pakistani envoy also called for addressing loopholes that impede developing countries' ability to combat illicit financial flows, as significant challenges and gaps remain. These include: lack of an agreed definition of IFFs; difficulties in reliable measurement of IFFs due to their disguised nature; increasing use of information and communication technologies and crypto-currencies by criminals; inadequate participation of developing countries in multilateral initiatives and their lack of capacity in combating IFFs.

Other major hurdles in efforts against IFFs include lack of sufficient political will and familiarity with procedural requirements, secrecy, different evidentiary standards, differences in legal procedures, and delays in responding to mutual legal assistance requests.

In conclusion, Ambassador Lodhi stressed the need for "more coherent collaboration, both at the national and the international level, to make more concerted efforts against illicit financial flows."

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