Partnering with Africa to Fight Illicit Finance

During this month’s Anti-Corruption Summit hosted by the United Kingdom, Secretary of State John Kerry remarked that corruption “destroys nation states” and “tears at the entire fabric of a society.” Corruption is a global problem that threatens the rule of law, undermines economic stability, contributes to extremism, and fosters insecurity.

As Deputy Assistant Secretary of State for International Finance and Development, fighting corruption is an important part of my work and that of my colleagues in the Bureau of Economic and Business Affairs. We fight corruption by encouraging other countries to adopt and enforce tough laws against foreign bribery through the OECD Working Group on Bribery; advocating for stronger anti-corruption standards and principles in multilateral fora including the G-7, G-20, and APEC; and leveraging countries’ international commitments to advocate for necessary reforms. We also fight for open budgets and natural resource contracting, more transparent business registration, and encourage responsible business conduct. 

As former Deputy Secretary of State William Burns and retired Admiral Michael Mullen noted in a recent article, corruption “has grown increasingly sophisticated over the last several decades, with devastating effects on the wellbeing and dignity of countless innocent citizens.” Moreover, they added, “corruption cripples prospects for development.” 

Understanding the danger of this ongoing challenge, the State Department is playing an active role in fighting corruption and supporting prospects for development through its work against illicit finance. Illicit finance involves the siphoning of domestic resources away from countries via corruption, fraud, organized crime, smuggling, and other illegal activities. This poses an acute threat to developing countries, which struggle to fund health, infrastructure, and poverty eradication efforts.

While developing countries must take action to combat illicit finance, developed countries such as the United States can and must play a key role too. They can help developing countries strengthen their laws and systems to prevent the theft of government resources. They can also take steps to help ensure they do not become a destination for those stolen resources. 

So what is the United States doing to help developing countries combat illicit finance? And what is the United States doing to prevent illicit funds from coming to the United States?

One of the areas of illicit finance in which I have been actively involved is the Partnership on Illicit Finance (PIF). The PIF was launched during the U.S.-Africa Leaders Summit in August 2014, and it brings together the United States and seven African countries -- Burkina Faso, Kenya, Liberia, Mauritius, Niger, Senegal, and Sierra Leone -- committed to combating illicit finance. The PIF allows the United States and its African partners to learn from each other and share good practices to combat corruption and other illegal financial activities. Through the PIF, we can discuss our common challenges, share lessons learned, and receive feedback as we all undertake the complex but necessary task of fighting corruption.

PIF members develop national action plans through which the United States and African governments can improve transparency and accountability in the public and private sectors. Over the past few months, PIF partners have formulated their national action plans and articulated specific commitments they plan to undertake. Through PIF, partners have consulted with each other and civil society, businesses, and international organizations. The collaborative approach of the PIF has spurred a healthy competition motivated by a unity of vision and purpose. 

The United States has committed itself to undertake actions that will make it more difficult for corrupt actors in other countries to store their ill-gotten gains in the United States. This means advocating for legislation that requires collecting beneficial ownership for all legal entities formed in the United States, closing loopholes that allowed foreigners to hide assets behind anonymous entities, working with other governments to investigate corruption and recover stolen assets, and closing gaps in money laundering prosecution laws.

I am proud that over the course of the next few months the United States and its PIF partners will publicly unveil their national action plans. The first step will be at the annual meetings of the African Development Bank in Lusaka, Zambia this week, where partners will publicly discuss the pledges contained in their action plans.

As we announce our action plans and follow up on our commitments, the PIF will thrive as a forum in which nations will engage and learn from each other about how they can fight corruption and prevent the proceeds of corrupt and illegal activity from moving through financial systems. Through these efforts governments will be able to ensure that their country’s resources are used to benefit their citizens and mobilized in a way to allow their economies to grow and their citizens to become more prosperous.

About the author: Lisa Kubiske Deputy Assistant Secretary for International Finance & Development in the Bureau of Econnomic and Business Affairs. 

For more information:

  • Read Secretary Kerry's remarks at the Anti-Corruption Summit Plenary. 
  • Check out this White House factsheet on U.S. Government Development Priorities on Financing for Development, includes the Partnership on Illicit Finance (PIF). 
  • Find other DipNotes blogs on Africa and our efforts at economic diplomacy around the world.
President Barack Obama, seated center, presides over the third working session of the U.S.-Africa Leaders Summit at the State Department.
Posted by Lisa Kubiske
May 25, 2016


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