By Elizabeth Hearst for AMLi
EUROPEAN countries and New Zealand comprise the Top 10 countries in the Basel Institute AML Index.
On the other end of the scale, the bottom 10 are dominated by African countries along with Haiti, Myanmar and Cambodia.
Finland – whose FATF assessment was also released today – comes out on top of the ratings with Congo ranked bottom stacking up a rating of 8.3 out of 10 for its money laundering risk.
Under the Basel AML Index, countries are assessed under 18 indicators including the quality of their AML/CFT Framework, their Corruption and Bribery Risk, Financial Transparency and Standards, Public Transparency and Accountability and Political and Legal Risk.
The vast majority of the weighting goes to the Quality of AML/CFT Framework in a country, which represents 65% of the score. Under this domain, countries are assessed on their FATF Mutual Evaluation Reports and Follow-up Reports.
In the Democratic Republic of Congo’s case, FATF determined the country did “not demonstrate a good understanding of the Money Laundering/Terrorist Financing risks it faces,” in the country’s latest MER.
Countries are also assessed under the US State Department: International Narcotics Control Strategy Report, the US State Department: Trafficking in Persons Report and Global Organised Crime Index.
The Top 10 Countries are:
- Finland
- Andorra
- Sweden
- Iceland
- New Zealand
- San Marino
- Slovenia
- Lithuania
- Norway
- France
The Bottom 10 are:
- Democratic Republic of Congo
- Haiti
- Myanmar
- Mozambique
- Madagascar
- Guinea-Bissau
- Cambodia
- Mali
- Senegal
- Vietnam
Of countries competing to host the new European AML Authority (AMLA), France comes top, followed by Latvia (17th), Austria (21st) Germany (26) and Italy (34th).
The UK is ranked 11th on the list, the United States is 28th and Mexico is ranked 68th.
The Basel AML Index also ranks countries based on the Transparency International: Corruption Perceptions Index and TRACE: Bribery Risk Matrix.
The organisation says that most indicators chosen for the index have their own scoring system, with individual indicator scores collected and normalised using the “min-max method” into a 0-10 system, where 10 indicates the highest risk level.
The Basel AML Index evaluates “structural factors by quantifying regulatory, legal political and financial indicators that influence jurisdictions’ vulnerability to ML/TF”, says the organisation, and relies partially on perception-based indicators such as the Transparency International’s Corruption Perceptions Index.
Top of the class in this year’s AML Index is Finland with a score of 2.88, while Andorra is second on 2.89 and Sweden third on 3.12.
The 11th Public Edition of the Index also reveals that the average risk level is 5.25 out of 10, while there have been increased risks identified in four major areas including corruption, financial transparency, public transparency and political/legal risks.
The full Basel AML Index is available here:
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