Crime, corruption and tax evasion drained an average of $805 million per year in last one decade from Nepal, according to recent global report.
The Global Financial Integrity (GFI) – the Washington-based group that exposes financial corruption – latest report published worldwide revealed that Nepal ranked 66th country – among the 144 countries – that has witnessed largest average non-normalised illicit financial flow estimation.
Illicit financial flows generally involve the transfer of money earned through illegal activities like corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities.
Nepal has seen a cumulative $8,045 million – that comes to around Rs 804.50 billion – of illicit money outflow in a decade, the report stated, adding that in 2011 alone, Nepal lost $651 million in fraud, corruption and shady business. “The country saw largest illicit financial outflow in 2010, when Nepal lost $1,885 million outflow.”
The report has not measure all illicit financial flows. It uses two primary methodologies to estimate two different methods for illegally transferring funds across borders.
The illegally earned money through crime, corruption and tax evasion has been transferred has been calculated on the basis of Hot Money Narrow (HMN) – that represent kickbacks, bribery, and other forms of unrecorded wire transactions, looks at money that has disappeared from the balance of payments, and Gross Excluding Reversals (GER) – that looks at trade mis-invoicing, a common method used by commercial entities for the cross-border movement of illegal money.
Likewise, the developing countries lost nearly $1 trillion to fraud, corruption and shady business transactions in 2011, vastly outpacing the foreign aid they received and the pace of dirty money leaving emerging nations is accelerating, the report found. “Illicit finance leaving the 150 developing countries totaled $946.7 billion in 2011, up by 13.7 per cent from the prior year and the largest amount in a decade. It also means that for every $1 in economic development assistance going into a developing country, $10 are lost via these illicit outflows.”
India ranked fifth largest exporter of illicit money between 2002-2011, with a total of $343.04 billion and in 2011 it was placed third when $84.93 billion was sent abroad, according to a new report.
Crime, corruption and tax evasion drained $946.7 billion from the developing world in 2011, up more than 13.7 per cent from 2010 – when illicit financial outflows totalled $832.4 billion, according to the report titled ‘Illicit Financial Flows from Developing Countries: 2002-2011’.
The study estimated the developing world lost a total of $5.9 trillion over the decade spanning 2002 through 2011 . “The top 15 exporters of illicit capital are in Asia – China, Malaysia, India, Indonesia, Thailand and the Philippines – two are in Africa – Nigeria and South Africa – four in Europe – Russia, Belarus, Poland and Serbia – two are in the Western Hemisphere – Mexico and Brazil – and one is in the MENA region, Iraq.
In the last 10 years, China topped the list with $1.08 trillion in black money outflow, followed by Russia ($880.96 billion), Mexico ($461.86 billion) and Malaysia ($370.38 billion).

Top five countries that witnessed illicit financial flow
* China – $1.08 trillion
* Russia – $880.96 billion
* Mexico – $461.86 billion
* Malaysia – $370.38 billion
* India – $343.93 billion

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