Most of the illicit outflows from Africa to United States of America (USA) occurred through the fraudulent technique known as “trade misinvoicing”, a Washington-DC based research and advocacy organisation, Global Financial Integrity (GFI), has said.
A total of $35.4 billion (N5.6trillion) of the US$55.6 billion (N8.8trillion) leaving the continent each year to US as illicit outflow are through the trade misinvoicing, the GFI’s Reseach shown.
GFI noted in a May 2014 study that trade misinvoicing was undermining billions of dollars of investment and domestic resource mobilisation in many African countries.
The organisation emphasised the importance of ensuring that the new U.S.-Africa partnership prioritises the curtailment of trade misinvoicing.
“The misinvoicing of ordinary trade transactions was the most widely used method for transferring dirty money across international borders, and it accounts for the vast majority of illicit financial flows from Africa,” said Heather Lowe, GFI’s legal counsel and director of government affairs.
“While it is easy to place the blame for this on corrupt officials or transnational crime networks, the truth of the matter is that the bulk of these fraudulent trade transactions are conducted by normal companies, many of them major U.S. and European companies.”