The Basel Anti-Money Laundering Index is an index that measures a country’s risk for money laundering and terrorist financing. The index is used by the private sector as an established AML country risk rating and by the public sector – NGOs and academia – for research and policy measures.
The report states the following as to its method: “The Basel AML Index measures the risk of money laundering and terrorist financing by countries based on publicly available sources. A total of 14 indicators dealing with AML/CFT regulations, corruption, financial standards, political disclosure and the rule of law are aggregated into one overall risk score. By combining these various data sources, the overall risk score represents a holistic assessment addressing structural as well as functional elements in the AML/CFT framework.”
Number one on the list (i.e. the highest risk) is Iran with a risk score of 8.6, with Afghanistan in second place with an overall score of 8.38. These two countries have occupied the top two spots for the last five years. The United States ranked 116th (4.85) and the United Kingdom is in 118th position with a score of 4.81 from a sample of 146 countries.
The least risky country, according to the index, is Finland with a score of 3.04.
But there do seem to be some anomalies in the index. The Balkan countries of Montenegro (122) and Croatia (139) ranked better than both the UK and US, suggesting that they are more compliant with AML regulations. Bulgaria, at 143 with a score of 3.87, is viewed as being more compliant and having less AML risk than the UK, USA, Norway, Australia, Germany, Singapore and the Netherlands.
A PDF of the report can be found here:
By Warwick Bartlett