Explanation of Position on a Second Committee Resolution on Illicit Financial Flows

Angela Palazzolo
U.S. Mission to the United Nations
December 3, 2018


The United States firmly believes that combating money laundering, corruption, and other related crimes is essential to our common security and economic prosperity, and we appreciate the opportunity to address these threats today. However, we also find it necessary to express our serious concerns about the language in this resolution, which, in our view, undermines our ability to work together constructively to address these challenges.

Perhaps most importantly, in this resolution the General Assembly fails to adequately acknowledge the central importance of the UN Convention against Corruption as the primary global legal framework for combating corruption and recovering stolen assets in the UN system. With 186 States Parties, the UNCAC’s Conference of States Parties serves as the lead governing body in this field in the UN. Unfortunately, by considering this resolution, the General Assembly has undermined the ability of the UNCAC COSP to lead this global conversation based on common legal obligations and the input of national law enforcement experts. We firmly believe that the appropriate venue for consideration of these issues is the UNCAC COSP, where these experts are present. We also believe that the discussions with regard to this resolution are attempts to undermine or sideline the UNCAC and risk weakening the commitments States Parties have made under the Convention to effectively address corruption. We encourage Member States to reconsider allowing this discussion in this venue, and instead focus our efforts on preventing and prosecuting corruption through the use of the UNCAC.

At the same time, while we acknowledge that the term, “illicit financial flows” has been used in prior resolutions adopted by the General Assembly, the United States generally opposes its inclusion because it is a term with no agreed-upon international definition. In the absence of any common understanding of what constitutes illicit financial flows, we should be clearer about the specific underlying illegal activities that produce or contribute to this threat, such as embezzlement, bribery, money laundering, other corrupt practices, or other crimes. We also do not agree with the implication in the resolution that developing countries are more affected by illicit financial flows than developed countries, many of whom have large financial sectors that can be negatively affected by criminal activity. In this context, all Member States should focus more concretely on measures they can take at home to prevent, investigate, and prosecute the underlying acts of corruption and other crimes that lead to the creation of proceeds of crime in the first place, and measures that encourage transparency and accountability in the use of recovered assets so as to ensure that recovered assets are best utilized to benefit those harmed by acts of corruption. This resolution does not achieve that objective.

The resolution places an extreme focus on asset return or disposition to the detriment of other critical steps in the asset recovery process that are just as important to our efforts to fight corruption. While the eventual return or disposition of stolen assets to requesting states, prior legitimate owners, and victims of the crime, as outlined in the UNCAC, is a key goal of asset recovery, it is only one part of the equation. Equal attention and resources must be devoted to establishing competent domestic legal and regulatory frameworks and institutions necessary to facilitating the proper detection and investigation of criminal proceeds and the freezing, seizure, and confiscation of the same. By focusing almost exclusively on the return of assets, and not also acknowledging the importance of these other equally integral components of the process, this resolution undermines the balanced approach, reflected in the UNCAC, that is necessary for countries to successfully recover stolen assets.

We also do not believe that asset recovery is a tool of sustainable development. While these issues may be linked, in some cases, this resolution implies that they must necessarily be connected. Asset recovery has traditionally served a number of purposes, law enforcement and fighting impunity being the most prominent.

We refer you to our national statement delivered on November 8, which addresses our concerns regarding the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda, and trade.

Additionally, the United States and Japan jointly give the following statement: We would like to stress the importance of coordination with and recognition of the important work of the Financial Action Task Force. Given that FATF has recently addressed the issue of virtual assets, it is unacceptable to us not to address those developments within this resolution. We are disappointed that certain Member States view the inclusion of FATF standards as problematic, and we view this intransigence as an effort to undermine the work of that body. Given that most countries in the world belong to FATF or a FATF-Style Regional Body, that intransigence is particularly puzzling to us.