Oslo — “All illicit financial flows are immoral, with deeply negative effects on people and the planet.” Humanitarians are scrambling for cash, and high‑profile calls for “innovative finance” are proliferating, often aiming to tap the private sector to further aid policy objectives. A new report, however, takes a arguably more effective approach by highlighting the “breathtaking scale” of money lost to illicit finance flows.
According to Sunit Bagree, consultant researcher at anti‑poverty NGO Results UK, tax revenues were lost from $309.8 billion worth of illicit finance flows caused by trade mis‑invoicing alone in 20 of the 26 countries worst affected by child malnutrition in 2024. Data were unavailable for six countries, including Sudan and the Democratic Republic of the Congo, which were also likely to have seen significant illicit finance flows. India, which recorded $229.8 billion of trade mis‑invoicing, potentially missed out on a staggering $41 billion in lost public revenues.
Illicit finance flows are a feature of many humanitarian crises. Trade mis‑invoicing—deliberately misvaluing imports and exports—is just one method among a broad spectrum that includes other commercial activities, profits from criminality such as human trafficking and drugs, and corruption. Nigeria, one of Africa’s biggest economies yet gripped by severe and chronic humanitarian crises, had $19 billion of trade mis‑invoicing in 2024, costing the public purse $1.4 billion. Sudan has long lost public revenues to illicit finance, weakening institutions. Competition over “lucrative returns,” often from the extractives sector, has been cited as a key driver of the conflict between the Sudanese Armed Forces and the Rapid Support Forces (RSF) that has engulfed the country since 2023. The war has likely worsened the problem, with the RSF financially exploiting aid groups operating in its territory.
Illicit finance from a wide range of sources has also long fueled conflict in Myanmar, where it is now of “central importance to sustaining ethnic armed groups and [their opponents] the Myanmar military,” according to a report by the Global Initiative Against Transnational Organized Crime. “Without targeted policies to disrupt illicit markets and provide alternative economic solutions, Myanmar risks repeating the cycles of instability that have defined its history,” the report warned.
The UN defines dirty money as “financial flows that are illicit in origin, transfer or use, that reflect an exchange of value and that cross country borders.” “It’s difficult to say things definitively because of the nature of illicit finance, where things are hidden and thrive on concealment,” Bagree said. “But all illicit financial flows are immoral, and some are really grisly, with deeply negative effects on people and the planet.” His framing, linking illicit finance to child malnutrition, touches on deeper discussions within the humanitarian community about whether their work needs to become more actively political.
Illicit finance is not the only money that could be put to better use, but accessing it requires political will, according to Bagree. Calls for debt relief to finance development goals have been growing for years, along with proposals for additional taxes targeting wealth and environmental damage. The New Humanitarian spoke at length with Bagree about these issues; the interview has been edited for length and clarity.
**The New Humanitarian: Why does illicit finance matter to humanitarians?**
**Sunit Bagree:** I anchored the report in nutrition, but the arguments around illicit finance apply to all social sectors. Genuine partnerships and true solidarity—moving beyond PR—between Global North and South countries could dramatically boost tax revenues for all, not just poorer nations. More revenue would mean more resources for public services, from nutrition and health to education, agriculture, water, sanitation, hygiene, and economic development. The shortfall in financing the Sustainable Development Goals (SDGs) is around $4.2 trillion annually, so the need is urgent. Reducing illicit flows also helps prevent crises, because such flows fuel crime, empower despots, and can drive violence on multiple scales.
**The New Humanitarian: The report focuses heavily on the UK because of the upcoming summit on illicit finance and the City of London’s reputation as a haven for dirty money. Should other governments be concerned?**
**Bagree:** Absolutely. Illicit financial flows affect every country. My focus has been on how trade‑related illicit flows harm the Global South and how greater funds could improve child nutrition and development. But these flows also damage tax revenue collection in the Global North, undermine financial system security, and create market instability. Law‑abiding businesses are undercut by those that evade rules, and democracy suffers as inequality rises and powerful actors manipulate politics. Cracking down on illicit flows is a win‑win for all.
**The New Humanitarian: Any other observations from your work?**
**Bagree:** The OECD is the most influential international body on tax issues, and the Financial Action Task Force, founded by the G7, leads on money laundering, terrorist financing, and proliferation financing. Both institutions share a key flaw: they are unrepresentative of poorer countries. Although Global South nations are members, decision‑making and rule‑making heavily favour rich countries, leaving the needs of poorer states inadequately addressed. This lack of representation mirrors each other’s deficiencies and highlights the need to reform global governance.
**The New Humanitarian: Recommendations for policymakers?**
**Bagree:** We need a UN Framework Convention on International Tax Cooperation, creating an equitable, inclusive, and rights‑based treaty body—something the OECD cannot provide. We must reverse the nine states that voted against this treaty. Additionally, a UN coordination and oversight mechanism on illicit financial flows is essential. Despite its shortcomings, the UN remains the only truly multilateral body engaged on these issues. A UN tax treaty and coordination mechanism would help address the fragmentation, ineffectiveness, and inequality that currently prevail.
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