By Fritz Brugger, Joschka J. Proksik & Felicitas Fischer

Most research on illicit financial flows (IFFs) has focused on illicit outflows from low-income countries and the role of non-state actors in generating IFFs. Less attention has been paid to processes through which IFFs enter formal value chains – in effect being legalised before leaving the country – or the crucial role of state institutions as gatekeepers. We develop a novel explanatory approach to account for the enabling role of state institutions in the legalisation of IFFs. Building on political settlement theory, we explain the performance of institutions in regulating IFFs as a function to maintain political power. Taking the case of Bolivia, we examine how legalising illicit value flows works in practice and analyse the motives and underlying conditions that lead state institutions to permit the formal export of gold shipments that have been illicitly sourced or transferred. We find that the legalisation of IFFs accommodates the interests of powerful cooperatives dominating the gold-mining sector, which are critical to maintaining the political settlement on which the incumbent government’s power is based. By maintaining a status quo of non-enforcement, legal ambiguity, and informality, gold-mining cooperatives reap higher benefits from resource extraction at the expense of domestic revenue mobilisation.

New Political Economy, Volume 29, 2024 - Issue 4

By The United Nations Conference on Trade and Development

Focus on Illicit Payments: The document examines transnational bribery in the context of international investment agreements (IIAs) and other related instruments, highlighting efforts to combat corruption at various levels.

Legal Definitions and Jurisdiction: It discusses the legal definition of bribery, the role of public officials, and the complexities of jurisdiction and international cooperation in addressing transnational bribery.

Enforcement and Sanctions: Emphasis is placed on the enforcement of anti-bribery laws and the sanctions imposed on those involved incorrupt practices, including the responsibilities of transnational corporations (TNCs).

Policy Options: The document outlines policy options for addressing illicit payments in IIAs, ranging from non-inclusion to substantive provisions that tackle transnational bribery issues comprehensively.

United Nations, 2001 , 101 pages

By EUROPOL

The use of cryptocurrency as part of criminal schemes is increasing and the uptake of this payment medium accelerating. However, the overall number and value of cryptocurrency transactions related to criminal activities still represents only a limited share of the criminal economy when compared to cash and other forms of transactions. A range of constraints are related to the use of cryptocurrencies, with high volatility likely a major factor in criminals’ reluctance to use cryptocurrencies for long term investments. Recent years have seen cryptocurrency increasingly used as part of criminal activities and to launder criminal proceeds. Criminals have also become more sophisticated in their use of cryptocurrencies. In addition to using cryptocurrencies to obfuscate money flows as part of increasingly complex money laundering schemes, cryptocurrencies are increasingly used by criminals as a means of payment or as an investment fraud currency. The number of cases involving cryptocurrencies for the financing of terrorism remains limited. The criminal use of cryptocurrency is no longer primarily confined to cybercrime activities, but now relates to all types of crime that require the transmission of monetary value. However, the scale and share of the illicit use of cryptocurrencies as part of criminal activities is difficult to estimate. Criminals and criminal networks involved in serious and organised crime also continue to rely on traditional fiat money and transactions to a large degree, in addition to emerging value transfer opportunities.    

The Hague: EUROPOL, 2022. 20p.