File #2341: "2018_Book_IllicitFinancialFlows.pdf"
Text
1|Acknowledgments|5
1|Introduction|6
2|References|9
1|Contents|11
1|List of Figures|13
1|List of Tables|14
1|About the Author|15
1|Chapter 1: Illicit Financial Flows: Conceptual and Operational Issues|16
2|1.1 Introduction|16
2|1.2 The Problematic Definition of a Fashionable Concept|17
3|1.2.1 Illicit|18
3|1.2.2 Financial|20
3|1.2.3 Flow|21
2|1.3 What Is Actually Meant by Illicit Financial Flows?|21
3|1.3.1 The Illegitimacy of the Related Activities|22
4|1.3.1.1 The Generation Phase|22
4|1.3.1.2 The Transfer Phase|24
4|1.3.1.3 The Use Phase|25
3|1.3.2 The Transnational Dimension: Channels and Methods|25
4|1.3.2.1 Cash and Valuables|27
4|1.3.2.2 Cryptocurrencies|27
4|1.3.2.3 Informal Banking Systems (IBS)|28
4|1.3.2.4 Traditional Banking System (TBS)|28
4|1.3.2.5 International Trade Instruments|28
4|1.3.2.6 Shareholding|29
2|1.4 Conclusion|29
2|References|31
1|Chapter 2: How Illicit Financial Flows Are Estimated|35
2|2.1 Introduction|35
2|2.2 Top-Down Approaches|36
3|2.2.1 Capital Account-Based Estimates|36
3|2.2.2 Trade-Based Estimates|38
3|2.2.3 Combined Capital Account and Trade Approaches|39
3|2.2.4 Suspicious or Unusual Transaction Analyses|39
3|2.2.5 Offshore Wealth and Flow Estimates|41
2|2.3 Bottom-Up Approach Focusing on the Generation Phase: The Walker Gravity Model|41
2|2.4 The Shared Limitations of the Available Methods|43
3|2.4.1 The Proposed Methods Suffer Intrinsic Statistical Weakness|43
3|2.4.2 The Proposed Methods Rely on Assumptions Whose Relevance Is Difficult to Assess|45
3|2.4.3 The Proposed Methods Do Not Produce Reliable Cross-National and Longitudinal Comparisons|46
3|2.4.4 None of the Proposed Methods Account for All Possible IFFs|46
3|2.4.5 Most Proposed Methods Do Not Produce Crime-Specific Estimates|47
2|2.5 Conclusion|48
2|References|49
1|Chapter 3: A New Strategy to Estimate the Illicit Financial Flows|52
2|3.1 Introduction|52
2|3.2 The Flow Network Approach|53
3|3.2.1 Trafficking Routes from Source to Destination: Step 1|57
4|3.2.1.1 The Proposed Modeling of the Transnational Trafficking Network|59
3|3.2.2 National Illicit Markets: Step 2|60
4|3.2.2.1 Methods to Size Drug Markets|60
5|Supply-Side Estimate|60
5|Demand-Side Estimates|61
4|3.2.2.2 The Proposed Modeling of the Size of the National Markets|62
3|3.2.3 The Dimension of the Shipments: Step 3|62
4|3.2.3.1 The Proposed Modeling of Size of the Shipments|63
3|3.2.4 The Supply Chain of Illicit Markets: Step 4|66
4|3.2.4.1 The Proposed Modeling of the Supply Chain|66
2|3.3 Conclusion|67
3|3.3.1 Why Estimate the Economic Value of Transnational Trafficking Per Se?|67
3|3.3.2 Main Weaknesses of the Flow Network Approach|69
3|3.3.3 Main Strengths of the Flow Network Approach|70
2|References|71
1|Chapter 4: Data and Assumptions Behind the Application of the Flow-Network Approach to the Cocaine Trafficking|75
2|4.1 Introduction|75
2|4.2 Constructing the Trafficking Network: Step 1|76
3|4.2.1 Potential Sources of Bias|79
2|4.3 Sizing the National Markets: Step 2|80
3|4.3.1 Calculating the Consumption|81
4|4.3.1.1 Prevalence of Use and Number of Users|81
4|4.3.1.2 Dealing with Underreporting and Uncertainty in the Estimates|84
4|4.3.1.3 Heavy Versus Light Users|86
4|4.3.1.4 Frequency of Use: Consumption Days for Heavy and Light Users|90
4|4.3.1.5 Consumption per Use Day by Light and Heavy Users|91
4|4.3.1.6 Purity Adjustment of Consumption|96
3|4.3.2 Calculating Purity-Adjusted Seizures|97
4|4.3.2.1 Purity Adjustment of Cocaine Seizures|98
2|4.4 Sizing the Drug Flows: Step 3|99
3|4.4.1 Weighting the Dyads|100
3|4.4.2 Combining Information on National Markets with Network Structure|101
2|4.5 Estimating the Economic Value of Drug Trafficking and the Related IFFs: Step 4|102
3|4.5.1 Supply Chain and Prices|102
3|4.5.2 GVA at Retail Level|106
3|4.5.3 GVA at National Distribution Level|107
3|4.5.4 GVA at Transnational Trafficking Level|108
3|4.5.5 GVA as Baseline to Estimate IFFs Related to ML of Cocaine Trafficking Proceeds|109
3|4.5.6 IFFs Related to the Transnational Import and Export of Cocaine|110
2|4.6 Conclusion|111
2|References|112
1|Conclusion|117
1|Index|119
1|Introduction|6
2|References|9
1|Contents|11
1|List of Figures|13
1|List of Tables|14
1|About the Author|15
1|Chapter 1: Illicit Financial Flows: Conceptual and Operational Issues|16
2|1.1 Introduction|16
2|1.2 The Problematic Definition of a Fashionable Concept|17
3|1.2.1 Illicit|18
3|1.2.2 Financial|20
3|1.2.3 Flow|21
2|1.3 What Is Actually Meant by Illicit Financial Flows?|21
3|1.3.1 The Illegitimacy of the Related Activities|22
4|1.3.1.1 The Generation Phase|22
4|1.3.1.2 The Transfer Phase|24
4|1.3.1.3 The Use Phase|25
3|1.3.2 The Transnational Dimension: Channels and Methods|25
4|1.3.2.1 Cash and Valuables|27
4|1.3.2.2 Cryptocurrencies|27
4|1.3.2.3 Informal Banking Systems (IBS)|28
4|1.3.2.4 Traditional Banking System (TBS)|28
4|1.3.2.5 International Trade Instruments|28
4|1.3.2.6 Shareholding|29
2|1.4 Conclusion|29
2|References|31
1|Chapter 2: How Illicit Financial Flows Are Estimated|35
2|2.1 Introduction|35
2|2.2 Top-Down Approaches|36
3|2.2.1 Capital Account-Based Estimates|36
3|2.2.2 Trade-Based Estimates|38
3|2.2.3 Combined Capital Account and Trade Approaches|39
3|2.2.4 Suspicious or Unusual Transaction Analyses|39
3|2.2.5 Offshore Wealth and Flow Estimates|41
2|2.3 Bottom-Up Approach Focusing on the Generation Phase: The Walker Gravity Model|41
2|2.4 The Shared Limitations of the Available Methods|43
3|2.4.1 The Proposed Methods Suffer Intrinsic Statistical Weakness|43
3|2.4.2 The Proposed Methods Rely on Assumptions Whose Relevance Is Difficult to Assess|45
3|2.4.3 The Proposed Methods Do Not Produce Reliable Cross-National and Longitudinal Comparisons|46
3|2.4.4 None of the Proposed Methods Account for All Possible IFFs|46
3|2.4.5 Most Proposed Methods Do Not Produce Crime-Specific Estimates|47
2|2.5 Conclusion|48
2|References|49
1|Chapter 3: A New Strategy to Estimate the Illicit Financial Flows|52
2|3.1 Introduction|52
2|3.2 The Flow Network Approach|53
3|3.2.1 Trafficking Routes from Source to Destination: Step 1|57
4|3.2.1.1 The Proposed Modeling of the Transnational Trafficking Network|59
3|3.2.2 National Illicit Markets: Step 2|60
4|3.2.2.1 Methods to Size Drug Markets|60
5|Supply-Side Estimate|60
5|Demand-Side Estimates|61
4|3.2.2.2 The Proposed Modeling of the Size of the National Markets|62
3|3.2.3 The Dimension of the Shipments: Step 3|62
4|3.2.3.1 The Proposed Modeling of Size of the Shipments|63
3|3.2.4 The Supply Chain of Illicit Markets: Step 4|66
4|3.2.4.1 The Proposed Modeling of the Supply Chain|66
2|3.3 Conclusion|67
3|3.3.1 Why Estimate the Economic Value of Transnational Trafficking Per Se?|67
3|3.3.2 Main Weaknesses of the Flow Network Approach|69
3|3.3.3 Main Strengths of the Flow Network Approach|70
2|References|71
1|Chapter 4: Data and Assumptions Behind the Application of the Flow-Network Approach to the Cocaine Trafficking|75
2|4.1 Introduction|75
2|4.2 Constructing the Trafficking Network: Step 1|76
3|4.2.1 Potential Sources of Bias|79
2|4.3 Sizing the National Markets: Step 2|80
3|4.3.1 Calculating the Consumption|81
4|4.3.1.1 Prevalence of Use and Number of Users|81
4|4.3.1.2 Dealing with Underreporting and Uncertainty in the Estimates|84
4|4.3.1.3 Heavy Versus Light Users|86
4|4.3.1.4 Frequency of Use: Consumption Days for Heavy and Light Users|90
4|4.3.1.5 Consumption per Use Day by Light and Heavy Users|91
4|4.3.1.6 Purity Adjustment of Consumption|96
3|4.3.2 Calculating Purity-Adjusted Seizures|97
4|4.3.2.1 Purity Adjustment of Cocaine Seizures|98
2|4.4 Sizing the Drug Flows: Step 3|99
3|4.4.1 Weighting the Dyads|100
3|4.4.2 Combining Information on National Markets with Network Structure|101
2|4.5 Estimating the Economic Value of Drug Trafficking and the Related IFFs: Step 4|102
3|4.5.1 Supply Chain and Prices|102
3|4.5.2 GVA at Retail Level|106
3|4.5.3 GVA at National Distribution Level|107
3|4.5.4 GVA at Transnational Trafficking Level|108
3|4.5.5 GVA as Baseline to Estimate IFFs Related to ML of Cocaine Trafficking Proceeds|109
3|4.5.6 IFFs Related to the Transnational Import and Export of Cocaine|110
2|4.6 Conclusion|111
2|References|112
1|Conclusion|117
1|Index|119