Illicit Financial Flows and Asset Recovery in the Eastern Partnership Region: A Mapping of Needs and Recommendations - May 2022

"Illicit Financial Flows (IFFs) in the EU Eastern Partnership (EaP) region can be estimated at around EUR 29 billion every year. Undocumented flights of wealth to and from, as well as within, the EaP region (Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine) have severe repercussions on government revenues and development opportunities. IFFs, particularly those related to serious crimes, drain funds from the economy and may force governments to divert more resources to prevent and respond to criminal activities. The depletion of resources and loss of tax revenues caused by IFFs have a serious impact on the delivery of basic public services and undermine countries’ development opportunities. Total IFFs in developing countries grew at an average annual rate between 7.2% and 8.1% over the period 2005-2014, reaching estimated levels between EUR 570 billion and EUR 895 billion in 2014.

The EU’s long-term policy objectives outlined in the renewed agenda“Recovery, Resilience and Reform: Post-2020 Eastern Partnership Priorities”, emphasize the importance of new region-wide initiatives and policies to reduce IFFs, to recover assets linked to organised crime and corruption, and to simplify and streamline the tracing, freezing, seizure, confiscation and recovery of illicitly-obtained assets. This should be accompanied by mechanisms and applications of good practices for the transparent management and liquidation of such assets. These important policies and mechanisms will enable EaP countries to capture billions in illicitly-obtained assets and to directly channel them into, for example, more schools, hospitals, community clinics, youth employment initiatives or other infrastructure needs for the public.

The European Union (EU) and the United Nations Interregional Crime and Justice Research Institute (UNICRI) present this study on “Illicit Financial Flows and Asset Recovery in the Eastern Partnership Region: A Mapping of Needs and Recommendations”, which sheds light on the damage being caused to the EaP region as a result of unchecked IFFs. The study also highlights the importance of strengthening cross-border relationships within the region in order to maximise the capture of illicitly-obtained assets.

This study was prepared based upon data and information collected in 2021. Although political and security changes have taken place since then, the recommendations presented remain relevant for policy makers and practitioners from the EaP countries as well as international stakeholders.

The EU and UNICRI are committed to providing key support and expertise needed by EaP countries to more effectively respond to IFFs. In designing and implementing more effective responses to IFFs, many of which are identified in the recommendations of this study, EaP countries will be able to weaken the influence of organised crime, as well as inject much needed resources into high-priority development needs to better serve their citizens."

Lawrence Meredith, Director for Neighbourhood East, DG Neighbourhood and Enlargement Negotiations (DG NEAR), European Commission 

Antonia Marie De Meo, Director of UNICRI