Illicit money outflow
reached $2 billion per year

Hot money and trade
mis-invoicing are main factors

Lebanon lost around $20 billion in illicit financial outflows from 2004 to 2013, according to the Washington-based research and advocacy organization Global Financial Integrity (GFI).

Lebanon was ranked 54th among 145 developing countries in terms of average illicit financial outflows. Its annual average was nearly $2 billion. The largest outflow was recorded in 2007 and amounted to $6.61 billion, according to GFI’s annual report, which assesses the illicit flow of money out of the developing world.

Illicit hot money outflows from Lebanon added up to $16 billion and accounted for more than 80 percent of the country’s overall illicit outflows. Outflows resulting from deliberate trade mis-invoicing represented the remaining $3.8 billion.

Hot money measures illicit financial flows recorded in the balance of payments.

The proportion of hot money outflows in all developing countries to trade mis-invoicing outflows is the inverse of that of Lebanon. Illicit hot money outflows from developing countries represents 17 percent while trade mis-invoicing outflows accounted for 83 percent. Fraudulent mis-invoicing of trade is the primary measurable means for moving funds out of developing countries illicitly, according to GFI.

In real terms, illicit outflows from the developing world increased 6.5 percent a year. After a slowdown during the global financial crisis, these flows have been rising, topping $1,000 billion in 2011 and reaching a peak of $1,090 billion in 2013, GFI said.