AIT Technology Helps Namibia, Other Developing Nations to Combat Illicit Financial Outflows
One of the biggest economic problems facing the developing world is not entrenched poverty but, rather, white-collar crime—including that committed by multinational corporations. Breakthrough technology from AIT will help victimized countries track and recover misappropriated funds.
(Dulles, VA) July 28, 2015—Actionable Intelligence Technologies (AIT), the nation’s leading supplier of solutions for financial investigation, is working closely with the Namibia Anti-Corruption Commission (ACC) to help that country’s authorities identify, expose and dismantle organizations involved in systematic financial theft. In addition to hands-on training—AIT recently gave a seminar on money laundering and related technology at ACC headquarters in the capital city of Windhoek—AIT is providing Namibia with its Comprehensive Financial Investigative Solution (CFIS), which enables an investigator to analyze financial records exponentially faster than is possible with traditional manual methods.
In placing a strong national focus on white-collar crime, Namibia joins a growing roster of countries determined to combat perhaps the most pernicious economic problem confronting the developing world—systematic theft through financial misappropriation. Namibia is a member of the Egmont Group of financial intelligence units, which includes representatives from around the world. In Africa alone, the Egmont Group includes representatives of 21 countries, ranging geographically from Algeria and Morocco all the way down to Namibia and the Republic of South Africa.
Many of the financial investigative units in these countries, as well as in other countries around the world, are displaying interest in AIT’s technology. “In addition to the Namibia ACC,” says AIT Chairwoman Susan Deehan, “we’re in discussions with Namibia’s Inland Revenue Service about how CFIS can help the agency enforce the country’s new tax laws, the Republic of South Africa’s National Prosecuting Authority and the Kenya Ethics and Anti-Corruption Commission, as well as multinational organizations in Asia. There tends to be a perception that corruption is endemic to the developing world, and that these nations are uninterested in doing anything about it. That is absolutely, categorically not the case.”
There are, per Deehan, other widespread misapprehensions about developing nations and their economies, especially in Africa. The organization Global Financial Integrity recently did a study of 82 of the poorest countries in the world. It found that 32 of them had illicit financial outflows greater than 10% of total trade, and 20 of them had illicit financial outflows larger than their inward foreign direct investment and foreign aid combined.1
In fact, it is estimated that as much as one trillion dollars per year is lost by developing countries through illicit financial outflows connected to trade mispricing, bribery, theft, kickbacks, tax evasion, organized crime, and trafficking of drugs, weapons and humans. This means that for every dollar developing nations receive in external assistance, dollars are lost to illicit financial outflows.2 Contrary to popular belief, corrupt activities such as bribery and embezzlement constitute only about three percent of the total. Criminal activities such as drug trafficking and smuggling make up 30% to 35%, but the bulk of the misappropriated funds—60% to 65%—are lost through commercial transactions by multinational companies. “The most common way money is illicitly moved across borders,” says Robert Baker, president of Global Financial Integrity, “is through international trade.”3
One of the most common mechanisms for this type of theft is re-invoicing, wherein a commodity extracted in one country—for example, oil, copper or diamonds—is routed through an intermediary corporation on its way to market. The extracting corporation allocates its profits on the transaction to the intermediary which is conveniently located in a country with little or no corporate income tax. By way of this maneuver, the extracting corporation avoids paying taxes in, or contributing to the economy of, the source nation. This same technique is frequently employed for money laundering, when it is thought desirable to conceal the source or destination of a shipment of funds.4
Nelius Becker, Chief, Prosecutions and Investigations for Namibia ACC, says, “The challenge is considerable, no question about it. These cases are by their nature very complex, and it requires not only the political willingness to pursue them but also the technical means to do so effectively. On the technological front, we see CFIS as one of the most helpful tools since the passage of the money laundering and corruption laws themselves in combating organized criminal organizations. CFIS is a tool that I cannot live without in my investigations; it is worth its weight in gold.”
Becker adds that organizations worldwide should “take a look at what is happening across the globe – [corruption] is not only a problem in Africa. It is important for other nations and agencies to learn about the tools that can help cut down on financial crime. Crime is crime and it should all be treated as such.”
Headquartered in Dulles, VA, award-winning Actionable Intelligence Technologies is the nation’s leading supplier of solutions for financial investigations. AIT’s customers include the New York Attorney General’s Office, United States Attorney’s Office, the Criminal Division of the Internal Revenue Service, the United States Postal Inspection Service, the Department of Securities, the Securities and Exchange Commission, the Federal Trade Commission and other important state agencies, as well as the Miami-Dade Police Department, the United States Department of Agriculture, numerous commercial and international forensic accounting firms, and many others. Founded in 1998 by Susan M. Deehan and Tim Deehan, AIT is dedicated to helping financial investigators make our country a safer place to live. AIT’s mission is to fight financial crime by delivering the technology and expert knowledge to detect, investigate and permanently dismantle the criminal organization. References are available on request. For more information, visit www.aitcfis.com.
1. Gascoigne, Clark, “G7 Whiffs on Illicit Financial Flows as FfD Conference Approaches,” Global Financial Integrity, June 10, 2015. gfintegrity.org/press-release/g7-whiffs-on-illicit-financial-flows-as-ffd-conference-approaches/. [“FfD” = Financing for Development]
2. Marcel, Mario, “Illicit Financial Flows: A Wake-Up Call to Action,” World Bank, Governance for Development blog, October 27, 2014. blogs.worldbank.org/governance/print/illicit-financial-flows-wake-call-action.
3. Tafirenyika, Masimba, “Illicit Financial Flows from Africa: track it, stop it, get it,” Africa Renewal, December, 2013. un.org/africarenewal/magazine/december-2013/illicit-financial-flows-africa-track-it-stop-it-get-it.
4. Leblanc, Brian, “Trade Misinvoicing, or How to Steal from Africa,” ThinkAfricaPress, May, 2014. allafrica.com/stories/201405120711.html.