A/HRC/36/52 interest groups such as financial institutions76 and real estate developers; this is far harder than blaming island nations far away for their lax financial practices. 64. Benefits of illicit financial flows to local property markets. Illicit funds are now key to shoring up real estate markets in many places, including London, New York and Vancouver, Canada. The impact of their repatriation would not be limited to constructionand property finance-related industries, but would also be manifest in decreased spending power available to most consumers in economies of these destination countries. 65. Benefits of illicit financial flows to local financial markets. In 2009, the Executive Director of the United Nations Office on Drugs and Crime revealed that at the height of the 2008 financial crash, drug money was pumped into the global financial system to keep it afloat.77 Foreign funds, including illicit financial flows, have also been key to shoring up all too many credit-driven, developed economies due to their lack of domestic savings that would finance their economic growth.78 Thus, the hasty withdrawal of any funds, licit or illicit, due to the need to repatriate them to their countries of origin would severely affect the economies of many developed countries. 66. Benefits of illicit financial flows to local professional service providers. Many jurisdictions have specialized in the provision of financial and legal services to those who are involved in the generation and facilitation of illicit financial flows. 79 However, the list of illicit financial flows-friendly countries/jurisdictions includes Switzerland, Hong Kong and Singapore, as well as Delaware, Nevada and Wyoming in the United States. 80 Thus, the hasty repatriation of the illicit funds which are “banked” in these jurisdictions would threaten the stability and prosperity of the economies of these jurisdictions. Difficulty of establishing a nexus between illicit financial flows and crime and/or civil wrongdoing 67. In the case of illicit flows resulting from criminal conduct, establishing a clear link between crime committed in the country of origin and the proceeds of crime in the destination jurisdiction is inordinately difficult. 81 This difficulty is compounded by the fact that the link — the proof — needs to be incontrovertible if repatriation is to be ordered. Where the illicit financial flows stem from activities which qualify as civil wrongdoings, repatriation is all the more difficult since there is no clearly established international convention for doing so. As noted in section V, while instruments such as the United Nations Convention against Corruption urge States to “consider” cooperating in such cases, this provision remains of advisory — and thus limited — utility. Difficulty of establishing beneficial ownership and/or piercing the corporate veil 68. Whether illicit financial flows stem from crime, corruption or tax abuse, many — if not most — transactions are conducted behind several corporate veils and routed through 76 77 78 79 80 81 16 Jack Smith, Mark Pieth and Guillermo Jorge, “The recovery of stolen assets: a fundamental principle of the UN Convention against Corruption”, U4 Brief No. 2, Chr. Michelsen Institute, February 2007. Available at www.u4.no/publications/the-recovery-of-stolen-assets-a-fundamental-principle-of-theun-convention-against-corruption/. Malaysia picks up this point in its general observations in response to the questionnaire. Rajeev Syal, “Drug money saved banks in global crisis, claims UN advisor”, Observer, 13 December 2009, available at www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfiefclaims. See www.forbes.com/sites/mikepatton/2014/10/28/who-owns-the-most-u-s-debt/#20e0d1141907. See Shaxson and Christensen, “Tax competitiveness”. Jana Kasperkevic, “Forget Panama: it’s easier to hide your money in the US than almost anywhere”, Guardian, 6 April 2016. Available at www.theguardian.com/us-news/2016/apr/06/panama-papers-ustax-havens-delawarewww.theguardian.com/us-news/2016/apr/06/panama-papers-us-tax-havensdelaware. Cynthia O’ Murchu, “Follow the money”, Financial Times, 14 August 2014.