Syria’s Missing Billions: US$23.6 Bernized through Illicit Financial Channels

A forthcoming report from Global Financial Integrity (GFI) reveals that the Syrian Arab Republic lost approximately US$23.6 billion due to illicit financial flows between 2000 and 2009. This staggering estimate is according to the findings of a new report, “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” by GFI economist Sarah Freitas.

Escaped Treasure: A Long-Standing Problem

In her blog post titled “Syria’s Escaped Treasure: The Intensifying Tide of Capital Flight,” Freitas explains that corruption, trade mispricing, and bribery have been the primary drivers of Syria’s illicit financial outflows since 2000. These losses, amounting to US$1,048 per capita in a country with a 2010 per capita GDP of US$2,891, are a result of the country’s pervasive corruption and weak financial sector transparency.

Alarming Increase in Corruption

Between 2005 and 2009, Syria experienced an alarming increase in bribery, kickbacks, and corruption. This trend fueled growing unrest among Syrians and enabled wealthy individuals—including corrupt public officials, terrorist financiers, and tax evaders—to move their funds into offshore safe havens using the international shadow financial system.

Complex Web of Anonymous Shell Corporations

These individuals utilized intricate networks of anonymous shell corporations to conceal their assets and circumvent international sanctions. For instance, the Iranian government has owned a skyscraper on Fifth Avenue in Manhattan through such networks, allowing them to bypass international sanctions for decades. It is highly likely that similar methods have been employed by the Syrian regime to shield assets and dodge international sanctions.

Counteracting Illicit Financial Flows

To combat illicit financial practices, the US and other countries can implement measures like tackling anonymous corporations and strengthening anti-money laundering laws. These actions would help prevent officials like Syria’s al-Assad from smuggling stolen assets out of their countries and create a more equitable financial system.

Request for Information and Interviews

To learn more about the report or to arrange for an embargoed copy or interviews with Ms. Freitas or Dr. Kar, please contact Clark Gascoigne of Global Financial Integrity at cgascoigne@gfintegrity.org or +1 202 293 0740 ext. 222.

About Global Financial Integrity

Global Financial Integrity (GFI) is a research and advocacy organization based in Washington, D.C., that focuses on improving transparency in the international financial system. For further information, visit www.gfintegrity.org. Connect with GFI on Twitter, Facebook, and YouTube.