The WCO presented to the G20 its study report on illicit financial flows

16 July 2018

At the invitation of the G20, the WCO presented its study report on illicit financial flows (IFFs) to the Development Working Group (DWG) of the G20, at its second meeting held in Tucumán, Argentina, on 12 July 2018.

Ping Liu, Director for Tariff and Trade Affairs of the WCO Secretariat, presented the key findings of the study report on the assessment of the methodologies used to estimate the magnitude of IFFs through trade misinvoicing (TM), its Executive Summary and Policy Recommendations on fighting against IFFs/TM which are: (1) securing sufficient mandate for Customs; (2) capacity building; (3) enhancing partnership with business, tax authorities, Financial Intelligence Unit, police, and Customs administrations of trading partners; and (4) use of new technologies such as blockchain.

Members of the G20 DWG expressed their appreciation of the WCO’s study report.

The study report was co-authored with WCO Members and external experts from other international organizations and academia, including the OECD.  It had been approved by the WCO Policy Commission and Council in June 2018, following a WCO Global Conference on IFFs/TM held in Brussels, 23 May 2018.  Earlier in June 2017, an Action Plan on Customs and the Fight against IFFs had been endorsed by the WCO Policy Commission and Council as an interim response to a G20 mandate.

The G20 Leaders’ Communique (Hangzhou Summit, 4 - 5 September 2016) states that “36. We will continue our work on addressing cross-border financial flows derived from illicit activities, including deliberate trade misinvoicing, which hampers the mobilization of domestic resources for development, and welcome the communication and coordination with the World Customs Organization for a study report in this regard following the Hangzhou Summit.”  The presentation of the WCO’s study report to the G20 DWG, where the G20 work on IFFs had been initiated, represented the most successful of its engagement with the G20 (the Chinese, German and Argentine presidencies, G20 Members) in responding to the mandate from the G20 leaders by the international Customs Community.