“Dirty money” hits $1.6 trillion, less than 1% currently seized – UN

Criminals, especially drug traffickers, may have laundered around $1.6 trillion representing 2.7% of global GDP in 2009, according to a new report released today October 25, 2011 by the United Nations Office on Drugs and Crime (UNODC).

This figure is consistent with the 2 to 5 per cent range previously established by the International Monetary Fund (IMF) to estimate the scale of money-laundering, the UN body said.

According to the report titled “Estimating illicit financial flows resulting from drug trafficking and other transnational organized crime,” less than 1% of global illicit financial flows is currently being seized and frozen.

“All criminal proceeds, excluding tax evasion, would amount to some $ 2.1 trillion or 3.6% of GDP in 2009 (2.3 to 5.5 per cent) – Out of this total, the proceeds of transnational organized crime – such as drug trafficking, counterfeiting, human trafficking and small arms smuggling – would amount to 1.5% of global GDP, 70% of which would likely have been laundered through the financial system” the report suggested.

The report said the illicit drugs trade – accounting for half of all transnational organized crime proceeds and a fifth of all crime proceeds – is the most profitable sector.

It also pointed out the lucrative nature of the cocaine market saying “probably the most lucrative illicit drug for transborder crime.”

“Traffickers’ gross profits from the cocaine trade stood at around $84 billion in 2009. While Andean coca farmers earned about $1 billion, the bulk of income generated from cocaine was in North America ($35 billion), followed by West and Central Europe ($26 billion).”

Close to two-thirds of that total, UNODC stated, may have been laundered in 2009 adding that most profits from the cocaine trade are laundered in North America and in Europe, whereas illicit income from other sub-regions is probably laundered in the Caribbean.

The report points out that “dirty money” promotes bribery and corruption, finances insurgency and, in some cases, terrorist activities.

“Tracking the flows of illicit funds generated by drug trafficking and organized crime and analysing how they are laundered through the world’s financial systems remain daunting tasks,” Mr Yury Fedotov, Executive Director of UNODC said in a statement today after launching the report in Marrakech during the Fourth Session of the Conference of the States Parties to the United Nations Convention on Corruption.

According to Mr Fedotov, once illegal money has entered the global and financial markets, it becomes much harder to trace its origins, and the laundering of ill-gotten gains may perpetuate a cycle of crime and drug trafficking.

By Ekow Quandzie

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