Update Date: December 2022
What is The BSA AML Index?
In recent years, money laundering has been rapidly growing. So the amount of dirty money. Governments and financial institutions try to protect themselves from this crime.
Read on to learn about the Basel 2022 Index and the Country's risk scores.
Basel Institute of Governance is an independent, international, non-profit organization committed to preventing Corruptionuption and other financial crimes. The organization was established in Basel, Switzerland.
Each year, Basel prepares an independent score and ranking that assesses the world's risk of money laundering and terrorist financing. This ranking is the Basel AML Index. Published by the Basel Institute of Governance in 2012, this document gives risk scores based on data from 15 publicly available sources, such as the Financial Action Task Force (FATF), the World Bank, and the World Economic Forum. FATF country's risk scores cover five areas:
- Quality of AML / CFT framework
- Bribery and Corruption
- Financial transparency and standards
- Public transparency and accountability
- Legal and Political Risks
The primary objective is not to rank countries superficially compared to each other but to give an overall view of different countries 'and regions' risk levels and their progress in addressing vulnerabilities over time.
Scores and Ranking
The Top 10 Countries With the Lowest Money Laundering Risk
The Top 10 Countries With The Highest Money Laundering Risk
|The Democratic Republic Of The Congo||8.30|
The Basel AML Index follows the World Bank classification of countries, with an additional separation of Europe and Central Asia into two regions:
- European Union and Western Europe
- Europe and Central Asia
- East Asia and the Pacific
- Latin America and the Caribbean
- The Middle East and North Africa
- North America
- South Asia
- Sub-Saharan Africa
1. European Union and Western Europe
ML/TF risk levels improved from last year as country coverage increased from 24 to 31 jurisdictions with the new FATF assessments of Bulgaria, Croatia, France, Germany, Liechtenstein, Netherlands, and Poland.
- The overall risk score is 997
- The quality of the AML / CFT framework is 4.45
- Bribery and corruption 2.91
- Financial transparency and standards 3.71
- Public transparency and accountability 2.70
- Legal and political risk 2.79
|San Marino ||3.34|
|Czech Republic ||3.81|
2. Europe and Central Asia
The weakest areas of the region are political and legal risks, corruption, and bribery.
- The overall risk score is 5.15
- The quality of the AML / CFT framework is 5.08
- Bribery and corruption 5.88
- Financial transparency and standards 5.16
- Public transparency and accountability 3.49
- Legal and political risk 5.69
It is not reflected in the indicators used by the Basel AML Index and therefore did not affect Russia's overall risk score.
3. East Asia and Pacific
The East Asia and Pacific region risk scores are slightly higher than the global average. The region has risks related to Corruption/bribery, human trafficking, public and financial transparency, and political/legal systems and has significant overall risk scores.
- The overall risk score is 5.48
- The quality of the AML / CFT framework is 6.08
- Bribery and corruption 4.22
- Financial transparency and standards 4.96
- Public transparency and accountability 4.40
- Legal and political risk 3.68
|New Zealand ||3.32|
|South Korea ||4.51|
|Solomon Islands ||6.54|
The weakest area is the quality of AML/CFT frameworks. New Zealand retains the top place as the lowest-risk country, despite an increased risk score following a new FATF evaluation. There are high trafficking risks in China, Malaysia, and Myanmar.
4. Latin America and the Caribbean
Most of the countries are within the medium-risk category.
- The overall risk score is 5.34
- The quality of the AML / CFT framework is 5.51
- Bribery and corruption 5.06
- Financial transparency and standards 5.55
- Public transparency and accountability 4.66
- Legal and political risk 4.57
|Costa Rica ||4.58|
|Trinidad and Tobago ||4.86|
|Antigua and Barbuda ||4.98|
|Dominican Republic ||5.03|
|Saint Lucia ||5.42|
|Saint Kitts and Nevis ||6.06|
90% of the assessed territories are listed as “money laundering jurisdictions” by the US. There are significant differences across the region, indicating different institutional capacities to mitigate risks.
5. The Middle East and North Africa
- The overall risk score is 5.03
- The quality of the AML / CFT framework is 5.76
- Bribery and corruption 4.70
- Financial transparency and standards 4.72
- Public transparency and accountability 4.12
- Legal and political risk 4.15
|Saudi Arabia ||5.28|
|United Arab Emirates ||5.70|
6. North America
The effectiveness of measures for beneficial ownership transparency remains a critical concern in the region.
- The overall risk score is 4.23
- The quality of the AML / CFT framework is 5.23
- Bribery and corruption 2.55
- Financial transparency and standards 2.72
- Public transparency and accountability 2.53
- Legal and political risk 2.31
7. South Asia
Beneficial ownership, prevention, prosecutions, and confiscation are all weak spots in terms of effectiveness in the region.
- The overall risk score is 6.02
- The quality of the AML / CFT framework is 6.36
- Bribery Corruption 5.75
- Financial transparency and standards 5.65
- Public transparency and accountability 4.68
- Legal and political risk 5.12
8. Sub-Saharan Africa
Nearly 62% of countries in this region are assessed as having a high risk of ML/TF.
- The overall risk score is 6.58
- The quality of the AML / CFT framework is 7.05
- Bribery and corruption 5.96
- Financial transparency and standards 6.08
- Public transparency and accountability 5.21
- Legal and political risk 5.34
|South Africa ||5.81|
|Cape Verde ||6.11|
|Sierra Leone ||6.97|
|The Democratic Republic Of The Congo ||8.30|
What Can Be Done to Improve Supervision Generally?
To improve supervision generally and enhance the effectiveness of regulatory implementation, several key actions can be undertaken. Strengthening regulatory frameworks is crucial by aligning them with international standards, such as those established by FATF, through regular updates and refinements to address emerging risks and stay ahead of evolving money laundering and terrorist financing techniques.
Governments should invest in building the capacity of regulatory and supervisory bodies responsible for overseeing anti-money laundering and counter-terrorism financing measures. Adequate resources, training programs, and expertise must be provided to ensure the effective implementation of supervisory functions.
Adopting a risk-based approach to supervision can optimize resource allocation and prioritize higher-risk areas and entities. This targeted focus allows for a more efficient and effective supervision process.
Collaboration and information sharing among domestic and international stakeholders play a crucial role in improving supervision. Strengthening cooperation between regulatory bodies, financial institutions, law enforcement agencies, and international organizations facilitates the exchange of information, intelligence, and best practices, leading to more robust and coordinated supervision efforts.
Regular monitoring and evaluation of supervision's effectiveness is vital. Conducting comprehensive assessments, audits, and evaluations of regulatory and supervisory practices can identify gaps, weaknesses, and areas for improvement. Feedback from these evaluations should inform the development of strategies to enhance supervision.
Engagement with the private sector, including financial institutions, is essential. Establishing effective channels of communication and collaboration allows for regular dialogue, sharing of insights and experiences, and seeking input from industry professionals. This collaboration can contribute to the development of practical and effective supervisory approaches.
Moreover, leveraging technological advancements, such as Sanction Scanner, can significantly enhance the efficiency and effectiveness of supervision. Sanction Scanner offers a comprehensive platform equipped with powerful tools for financial crime prevention and compliance. Its cutting-edge technology enables financial institutions and regulatory bodies to effectively monitor high-risk transactions, conduct thorough due diligence, and stay updated on the ever-evolving regulatory landscape.
By incorporating Sanction Scanner's robust features, including real-time screening against global sanctions lists, politically exposed persons (PEPs) databases, and adverse media sources, supervisory authorities can strengthen their capabilities in identifying and mitigating potential risks associated with money laundering and terrorist financing.
Sanction Scanner's advanced analytics and artificial intelligence-driven algorithms provide enhanced detection capabilities, allowing for the identification of patterns, anomalies, and suspicious activities that may warrant further investigation. This technology empowers supervisory bodies to proactively address financial crime, contributing to more efficient and impactful supervision efforts.
Furthermore, Sanction Scanner's user-friendly interface and comprehensive reporting capabilities facilitate the efficient management of compliance processes. It streamlines the documentation and record-keeping requirements, ensuring that regulatory obligations are met consistently and accurately.
By embracing the advanced features and functionalities offered by Sanction Scanner, regulatory bodies can strengthen their supervisory practices, improve compliance with AML/CFT standards, and enhance their ability to detect and deter illicit financial activities.