The report said such illicit financial flows are a major obstacle to development and good governance. They weaken domestic resource mobilization, reduce tax revenues, and hinder funding for public services and infrastructure investment.
According to the GFI, larger economies tend to see higher levels of illicit financial flows due to their greater trade volumes.
For example, over a decade, there were illicit outflows of $6.96 trillion into China, $1.18 trillion into Thailand and $1.06 trillion into India. As a share of total trade, this represents about 25 percent for China and 22 percent for India annually.
To combat such practices, the GFI recommends strengthening customs management, increasing information exchange through regional agreements, increasing transparency in free trade areas, and promoting international cooperation.