The CoE presents the results of illicit financial flows measurement in Latin America

UNODC, and the Center of Excellence (CoE) for Statistical Information on Government, Crime, Victimization and Justice together with experts from national institutions in Colombia, Ecuador, Mexico and Peru, shared their experiences in the pilot measurement of indicator 16.4.1 of the 2030 Development Agenda in terms of illicit financial flows, in addition to pointing out its usefulness in the framework of strategies to combat organized crime.

During the webinar Jean-Luc Lemahieu, Director of the Division for Policy Analysis and Public Affairs of UNODC highlighted the importance of combatting IFFs as a crucial component of the global efforts to tackle transnational organised crime and promote peace, justice and strong institutions around the world. Salome Flores, Coordinator of the CoE, David Ravaux, Jr. Researcher, and Laura Castro, Local Coordinator of UNODC Colombia, presented the results of the pilot, highlighting the conceptual and methodological framework, as well as the finalized markets by country. Adrian Franco, Vice President of the Governing Board and President of the National Institue of Statistics ans Geography, underscored the challenge of implementing the pilot’s conceptual tools in practice due to the scarcity of data related to illicit markets in the participating countries.

The pilot measurement started in 2018 and involved a number of national institutions (such as National Statistical Offices, and law enforcement agencies, among others) in the process of data collection and the production of estimates. The markets under measurement were drug trafficking, smuggling of migrants, trafficking in persons and illegal mining.

In Mexico, migrant smuggling services for both entry and transit through Mexico and especially for crossing the U.S.-Mexico border are mostly operated by transnational networks resident in Mexico. On average, from 2016 to 2018, inward IFFs were 1,116 million US dollars and outward IFFs were 13.77 million US dollars. On a different note, heroin trafficking is the most profitable market with an average of US$4.79 billion, followed by cocaine (US4.45 billion US dollars) and methamphetamine (US3.05 billion US dollars). Cocaine-related outward IFFs were estimated at 34 million US dollars, on average.

In Peru, the drug trafficking organizations operating use sophisticated cocaine trafficking networks with logistical capacity to ship the drug to extra-continental markets in North America, Europe and Asia. Peruvian drug trafficking groups export cocaine to neighboring countries, such as Bolivia, Brazil and Ecuador, but additional revenue to regional exports comes from servicing the delivery of cocaine shipments to non-resident drug trafficking organizations engaged in extra-continental exports. On average, from 2015 to 2017, an estimated 1.48 billion US dollars of inward IFFs to Peru related to cocaine trafficking. The outward IFFs related to smuggling of migrants from Ecuador, mainly Ecuadorians travelling to get to the United States, between 2016 to 2018 were estimated with an average value of 13.56 million US dollars.

Regarding Colombia, where illegal mining is linked to gold exploitation, although no estimation on this market was reached due to lack of quantitative and qualitative data, a methodology in line with the System of National Accounts (SNA) was presented. This methodology relies on the Supply and Use Balances as well as the Supply and Use Table. Similarly, the results of inward IFFs related to cocaine trafficking were presented by describing the structure of the production and income generation accounts. On average, in the period 2015-2018, the IFFs value ranged from 1.07 billion USD  to 8.22 billion USD dollars and the outward IFFs were estimated at 220.23 million US dollars.

Further Information:

Conceptual Framework for the Statistical Measurement of Illicit Financial Flows

UNODC section on IFFs

CoE section on IFFs

UNCTAD section on IFFs