Orphan Imports and Lost Exports in India’s Trade: A Quantitative Assessment of the Significance and Implications for Illicit Financial Flows

Orphan imports and lost exports refer to import and export transactions that have been reported by only one of the two trading partners.They are excluded from computations of trade mis-invoicing based on comparing partner country trade statistics. We show that India’s trade with 19 trading partners over 2000-2018 not only indicates substantial trade mis-invoicing but alsosignificant orphan and lost trade in the commodities displaying mis- invoicing. We also show that the amounts involved show an uptrend and are more pronounced in imports, with the orphan imports recorded by India being more than 15 times the orphan imports recorded by partner countries. Therefore, any conclusion on illicit flows through mis-invoicing in these commodities will be incomplete without analysing the impact of orphan and lost trade. We analyse some possible causes and discuss specific commodity-level examples to demonstrate that orphan and lost trade could not only lead to re-adjustment of computed amounts of trade mis-invoicing but, in the worst scenario, indicate serious fraud, with important implications for illicit flows. The paper’s finding that only a few commodities account for bulk of the amounts in orphan and lost trade could facilitate better analysis and mitigation measures.

Narratives of the provenance of art and antiquities on the market and the reality of origins at the source

This essay presents the findings of the International Conference on Handling of Cultural Goods and Financing of Political Violence and introduces provenance research that examines the market in Europe for antiquities from Asia and the market in North America for antiquities from Europe. It summarises findings, such as the involvement of violent political organisations, transnational organised criminals and politically-exposed persons (PEPs) in illicit trafficking of cultural objects. It also highlights some foundations for progress, such as enhanced traceability and due diligence in the art market, plus action and cooperation to respond to illicit flows as regional problems. On cover:ANNIBALE CARRACCI (BOLOGNA 1560 - ROME 1609), An Allegory of Truth and Time c. 1584-1585.Oil on canvas | 130,0 x 169,6 cm. (support, canvas/panel/str external) | RCIN 404770Royal Collection Trust / © Her Majesty Queen Elizabeth II 2021.

Neo-colonial penality? Travelling penal power and contingent sovereignty

The article explores the relevance of neo-colonial theory for criminology, and its contribution to understanding why and how penal policy and models travel from the global North to the global South. An empirical example is employed to review arguments for and against ‘penal neo-colonialism’ and to tease out the theory’s strengths and limitations; namely the European Union’s ‘penal aid’ to shape West African countries’ penal policies and practices to stop illicit flows and irregular mobility to Europe. The article further discusses neo-colonial theory’s concepts of agency, power and sovereignty by comparing them to similar poststructuralist perspectives on the ‘contingent sovereignty’ of ‘governance states’. Moreover, by drawing on a theoretical discussion on statehood in African studies, it looks at how the sovereignty of African states has been conceptualized as hollowed out ‘from above’ as well as ‘from below’. In doing so, the article contributes to a recent criminological debate that has problematized the relationship between (travelling) penal power and state sovereignty.

The effects of illicit financial flows on oil and gas revenue generation in Nigeria

Purpose The purpose of this study is to determine the extent illicit flows affect the oil and gas revenue generation in Nigeria specifically the activities concerning oil theft. Design/methodology/approach A qualitative approach using a systematic quantitative assessment technique was used to select peer-reviewed articles and reports that discussed crude oil theft in Nigeria. This was followed by the use of empirical evidence and content analysis. Findings Crude oil theft in Nigeria accounts for 10% of illicit financial flows (IFFs) from Africa annually and this amounts to US$6bn annually. Research limitations/implications Oil theft is a new subject area of public policy and academic research; data, secondary literature and peer-reviewed journal articles are limited. This paper was from the public sector perspective only. Originality/value This study is one of the few works to highlight the connection between crude oil theft and IFFs.

Private ‘Rescue’-by-Purchase of Stolen Cultural Goods: The Material and Social Consequences and the Complicity of Europe and North America

‘Rescue’ has long provided a justification for the handling of illicit cultural goods, yet the specific consequences of this practice have not been systematically documented. This paper draws on historic, recent and still-emerging cases around the world to assess the resurgent argument that looted antiquities and stolen artefacts should be rescued through purchases made by private collectors. It shows that the practice is promoted by politically exposed persons, who use it for money laundering and reputation laundering; that proceeds from the practice may be received by transnational organised crime groups; and that its social and political acceptability is exploited to facilitate fraud and embezzlement. While many of these cases demonstrate complicity on the part of elites and authorities within the societies that are victimised, they are emblematic of the global structure of this enterprise. They also reaffirm the complicity of markets and authorities in the Global North/West in illicit flows of cultural assets that are exceptionally harmful to societies in the Global South/East.

The Logic of Illicit Flows in Armed Conflict

ABSTRACTWhy is there variation in how violent nonstate groups interact in armed conflict? Where armed conflict and organized crime converge in unstable regions worldwide, these groups sometimes enter cooperative arrangements with opposing groups. Within the same unstable setting, violent nonstate groups forge stable, long-term relations with each other in some regions, engage in unstable, short-term arrangements in others, and dispute each other elsewhere. Even though such paradoxical arrangements have intensified and perpetuated war, extant theories on group interactions that focus on territory and motivations overlook their concurrent character. Challenging the literature that focuses on conflict dynamics alone, the author argues that the spatial distribution of illicit flows influences how these interactions vary. By mapping cocaine supply chain networks, the author shows that long-term arrangements prevail at production sites, whereas short-term arrangements cluster at trafficking nodes. The article demonstrates through process tracing how the logic of illicit flows produces variation in the groups’ cooperative arrangements. This multiyear, multisited study includes over six hundred interviews in and about Colombia’s remote, war-torn borderlands.

Introduction

Global agreement in 2015 on the UN Sustainable Development Goals framework, to guide worldwide progress in the period to 2030, includes for the first time a target to reduce illicit financial flows (IFF). But without agreement on methodologies to measure the scale of IFF, it is not clear that global, regional or national efforts have any prospect of success. This book provides a critical survey of the leading methodologies and data for estimating illicit flows, with particular attention to tax-related IFF. This chapter lays out the structure of the book, and outlines the approach taken.

Estimating Illicit Financial Flows

Illicit financial flows constitute a global phenomenon of massive but uncertain scale, which erodes government revenues and drives corruption in countries rich and poor. In 2015, the countries of the world committed to a target to reduce illicit flows, as part of the UN Sustainable Development Goals. But five years later, there is still no agreement on how that target should be monitored—to say nothing of how it will be achieved. The term ‘illicit financial flows’ covers a range of corrupt practices, aimed at obtaining immunity or impunity from criminal law, from market regulation and from taxation. Illicit flows occur through many different channels, whether they involve laundering the proceeds of crime, for example, or shifting the profits of multinational companies. There are two consistent features. First, illicit flows are deliberately hidden. These cross-border movements of assets and income streams depend on a set of common tools including opaque company accounts, legal vehicles for anonymous ownership, and the secrecy jurisdictions that provide these services. Second, the overall effect of illicit flows is to reduce the revenue available to states, and to weaken the quality of governance—so there is less money to support human development, and it is less likely to be spent well. In this book, two of the economists most closely involved in the process to develop UN indicators of illicit financial flows offer a critical survey of the existing data and methodologies, identifying the most promising avenues for future improvement and setting out their own proposals.