Trade misinvoicing may have siphoned roughly $3.64 trillion in illicit value out of the Western hemisphere over the decade from 2013 to 2022, with annual “trade value gaps” climbing to a new high of about $473.2 billion in 2022, according to a new report by Global Financial Integrity (GFI).

Across the region, yearly gaps fluctuated between about $285 billion and $392 billion from 2013 through 2019, then contracted to about $343.2 billion in 2020 amid the pandemic-era trade downturn. 

The lull was brief, however. The estimated gaps jumped to about $437.2 billion in 2021 and then rose again in 2022, which GFI described as evidence of entrenched vulnerabilities amplified by post-2020 disruptions and commodity-price swings. 

Mexico recorded the largest cumulative trade value gaps in the Western hemisphere, at about $1.27 trillion, followed by Brazil at about $873 billion, GFI said. Other major contributors over the decade included Argentina (about $268 billion), Chile (about $229 billion), Colombia (about $229 billion), and Peru (about $220 billion), with sizable totals also cited for the Dominican Republic (about $100 billion) and Ecuador (about $94 billion). 

GFI said the discrepancies do not automatically prove illegality, but persistent, large mismatches are strongly indicative of deliberate under- or over-invoicing used to move value across borders.

“These outflows have direct consequences: they erode the tax base, stifle industrial development, worsen balance-of-payments pressures, and perpetuate dependence on external finance,” the advocacy group said in the report. “Indirectly, they fuel corruption and organized crime by providing a mechanism to launder proceeds, thus undermining the rule of law.”

The report recommends modernizing customs capabilities and analytics, expanding cross-border customs data-sharing, tightening oversight and transparency in free-trade zones, expanding specialized trade-data cooperation arrangements, and strengthening legal frameworks so large-scale misinvoicing can be pursued as a serious financial crime. 

Read the GFI report here