Strategies for preventing illicit financial flows in developing countries

Abstract

Purpose

This paper aims to critically review the strategies for prevention of illicit financial flows to and from developing countries with a view of ascertaining the most effective strategies to be selected and implemented by developing countries to stem the scourge.

Design/methodology/approach

The peer-reviewed journal articles were studied; those that discussed illicit financial flows were selected and reviewed critically using the systematic quantitative assessment techniques together with an output table.

Findings

The critical review deduced that enacting effective trade laws, trade regulations, creating a beneficial ownership registry, multinational companies disclosing information on business, automatic exchange of information on tax issues, the Financial Action Task Force 40 guidelines on anti-money laundering and countering financing of terrorism and domestic and international cooperation are the most reliable strategies that should be implemented by developing countries.

Research limitations/implications

The wide geographic scope of developing countries, use of only high-quality databases that restricted the use of other articles and use of public sector perspective are the limitations for this paper.

Originality/value

This study is amongst the limited works to discuss the most reliable and effective strategies to prevent illicit financial flows in developing countries.

Citation

Umar, B., Abu, M.M. and Mohammed, Z. (2020), "Strategies for preventing illicit financial flows in developing countries", Journal of Money Laundering Control, Vol. 23 No. 3, pp. 601-608. https://doi.org/10.1108/JMLC-02-2020-0017