![]() ![]() The debates point to major divergences and disagreement on all these points. ![]() Beyond the narrow/broad definitional debate, several questions remain with respect to the following (Erikkson, 2017): (1) the type of cross-border transfers that qualify as IFFs-whether money flows or anything with monetary value, from loans embedded in private contracts to smuggled physical goods (2) the type and degree of illegality involved and (3) whether the source, the use, or the transfer mechanism of a cross-border transfer should be assessed as illegal. 2 Making such a clear distinction in relation to tax-motivated IFFs is fraught with serious conceptual problems, as discussed in the following analysis. 1 The ‘broad’ definition of IFFs stretches the concept further by including transactions that are deemed unethical, even if not illegal in the assessed jurisdiction (High Level Panel on Illicit Financial Flows from Africa, 2015 Independent Expert on the Effects of Foreign Debt, 2016 UNCTAD, 2014). In a ‘narrow’ sense, IFFs refer to cross-border financial transfers ‘that have a clear connection with illegality’ (World Bank, 2016, 1). The dominant narrative, which we deconstruct in Section 2, distinguishes between a ‘narrow’ and a ‘broad’ definition of IFFs (for a review of the debate, see Forstater, 2018a). Yet there is still no consensus regarding the concept and definition of IFFs. 2 For example, certain tax optimisation schemes that make use of offshore structures to get around an (.)ġ Countries have committed to ‘significantly’ reducing ‘illicit financial flows’ (IFFs) by 2030 in accordance with Sustainable Development Goal (SDG) target 16.4.1 The narrow definition essentially covers transfers associated with ‘corruption, illegal natural res (.).It concludes with some summary observations. It bridges development and legal perspectives by firmly embedding the legal discourse in the Sustainable Development Agenda and the SDGs. In these areas, the analysis briefly rehearses the state of the debate, questions some entrenched assumptions, and presents ideas that help to reconcile conflicting views. The analysis tackles two further contested areas in the debate: the tension between ‘development’ and ‘legal’ approaches to IFFs, and aggregate versus disaggregate approaches under the IFF agenda. It then brings much-needed clarity to the ‘broad’ definition of IFFs, by anchoring it in legal concepts, rather than ethics. The analysis challenges the ‘narrow’ definition of IFFs, arguing that it mis-characterises the legal terrain. This article reviews and challenges some key tenets of the debate on illicit financial flows (IFFs), and articulates some lines of legal reasoning that can help to define the boundaries of what constitutes illicit flows (or not). ![]()
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