Illicit financial flows from migrant smuggling

The report finds that despite robust anti-money laundering policies, there are few financial investigations into migrant smuggling in Senegal and Sierra Leone due to resource gaps and the prevalence of cash-based, informal financial systems. Smugglers utilize 'pay-as-you-go' and 'full-package' models, moving funds through hawala systems and foreign currency black markets to avoid detection. Illicit proceeds are frequently laundered through real estate, the hospitality industry, and faith-based organisations. The study highlights significant institutional challenges, including underfunded Financial Intelligence Units (FIUs), a lack of beneficial ownership registries in Senegal, and corruption within law enforcement in Sierra Leone.

• Migrant smuggling generates substantial global and regional profits, with global annual profits estimated at over $10 billion and profits from East, North, and West Africa to Europe estimated at approximately $6.57 billion. Moderate estimates for flows from West Africa to Europe alone exceed $100 million.
• Smugglers employ various pricing models: 'full-package' trips to the Middle East cost $800–$1,200 and trips to Europe cost $1,000–$1,500; sea routes to the Canary Islands cost $400–$600; and 'pay-as-you-go' inland routes to Europe range from $600–$800.
• Illicit funds are primarily moved through informal channels to avoid regulatory scrutiny, specifically using the hawala system and foreign currency black markets, which allow for anonymous, paperless transfers based on trust.
• Smugglers launder proceeds by investing in several high-risk sectors, including real estate, the hospitality industry (clubs, bars, hotels), second-hand vehicle sales, travel agencies, mining, and faith-based or charity organisations.
• Financial Intelligence Units (FIUs) in both Senegal and Sierra Leone are underfunded and understaffed, leading to a lack of 'follow the money' investigations. In Senegal, the CENTIF reported no money laundering investigations related to migrant smuggling in 2020.
• Investigative efforts in Sierra Leone are hindered by witness reluctance and corruption, with reports that some security forces provide protection to smugglers and travel agents.
• Senegal remains on the FATF grey list due to failures in implementing action plans, specifically regarding the ascertainment of beneficial ownership and the confiscation of proceeds.

APA

Ani, N. C., & Shahid, J. (2023). Illicit financial flows from migrant smuggling. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/ocwar-t-paper-4-eng.pdf

Chicago

Ani, Ndubuisi Christian, and Jennifer Shahid. Illicit financial flows from migrant smuggling. Institute for Security Studies, 2023. https://issafrica.s3.amazonaws.com/site/uploads/ocwar-t-paper-4-eng.pdf.

Wikipedia

{{cite report |last1=Ani |first1=Ndubuisi Christian |last2=Shahid |first2=Jennifer |title=Illicit financial flows from migrant smuggling |publisher=Institute for Security Studies |date=July 2023 |url=https://issafrica.s3.amazonaws.com/site/uploads/ocwar-t-paper-4-eng.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ani2023illicit, author = {Ani, Ndubuisi Christian and Shahid, Jennifer}, title = {{Illicit financial flows from migrant smuggling}}, institution = {Institute for Security Studies}, year = {2023}, month = jul, url = {https://issafrica.s3.amazonaws.com/site/uploads/ocwar-t-paper-4-eng.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }