G7 Research Group G7 Information Centre
Summits |  Meetings |  Publications |  Research |  Search |  Home |  About the G7 Research Group
University of Toronto

The G7 Must Step Up Its Fight against Illicit Financial Flows

Denisse Rudich, G7 Research Group London
June 15, 2021

Where money flows, illicit finance follows. The G7 must step up its fight against corruption and illicit financial flows. At the G7 summit in Cornwall, G7 leaders committed billions of dollars to building health structures for pandemic preparedness and to tackle COVID-19, to promoting green finance and biodiversity to address climate change, and to giving developing countries an alternative to China's Belt and Roads Initiative by announcing the Build Back Better for the World (B3W) framework, a $100+ billion infrastructure project that promotes western values of democracy, human rights, labour rights and transparency. However, they made very few references to taking measures to tackle illicit financial flows and corruption, which are deterrents against the misappropriation of state funds, money laundering and grand scale corruption involving vast quantities of assets – key threats to their worthwhile initiatives.

What They Did Say

In the section on Global Responsibility and International Action of the Carbis Bay G7 Summit Communique, the leaders "recognise[d] the need for action on corruption, including by sharing information on illicit financial activities, tackling the misuse of shell companies, and curtailing the ability of illicit actors to hide wealth, including in real estate." This is the first time G7 leaders referred to real estate used to launder the proceeds of crime. It remains to be seen what steps countries will take to tackle the use of land and property for money laundering. There were, however, many references to upholding human rights throughout the communiqué and to condemn forced labour, which could lead to a call for human rights due diligence and modern slavery due diligence in global supply chains.

Other G7 documents, such as the G7 2030 Nature Compact and 2021 Open Societies Statement, included slightly more substantial references to illicit financial flows.

In the Nature Compact, G7 leaders mentioned the possibility of introducing due diligence requirements to tackle deforestation and forest degradation in the supply chain. The G7 further committed to "stepping up efforts" to tackle environmental crimes including by:

The Open Societies Statement emphasized "the rule of law and effective, independent and impartial judicial systems free from corrupt influence or coercion." It included a commitment to "prevent and tackle corruption and illicit financial flows and promote integrity, transparency and accountability."

Where That Might Lead

Although the Carbis Bay communiqué did not directly link geopolitical issues to sanctions breaches as a source of illicit financial flows, it contained several country-specific statements that could indicate future consideration of the use of human rights and other sanctions measures. These include:

It remains to be seen what type of coordinated actions G7 members will take in and against these countries to drive forward change.

What Next

Illicit financial flows and corruption are expected to be addressed further at the G7 interior ministers meeting, which could account for the G7 leaders' seemingly light touch on these matters at Cornwall. The G7 indicated that it would build on these various initiatives at the G20 and other multilateral forums, including the US-hosted Summit of Democracy and the United Nations. It is possible that the G7 at Cornwall has set in motion a new way to address illicit finance and predicate crimes, including corruption, are addressed at high-level gatherings.

[back to top]


G7 Information Centre

Top of Page
This Information System is provided by the University of Toronto Libraries and the G7 Research Group at the University of Toronto.
Please send comments to: g7@utoronto.ca
This page was last updated June 15, 2021.

All contents copyright © 2021. University of Toronto unless otherwise stated. All rights reserved.