[{"data":1,"prerenderedAt":279},["ShallowReactive",2],{"news-out-now-annual-report-2022-2470":3,"news-out-now-annual-report-2022-2470-similar":40,"i-heroicons:arrow-left-20-solid":274},[4],{"id":5,"status":6,"date_created":7,"date_updated":8,"title":9,"type":10,"body":11,"date":12,"topic":13,"slug":15,"activity":16,"nid":17,"topics":18,"activities":19,"programme":20,"area":20,"websites":21,"language":20,"image":23,"translation_of":20,"countries":34,"tags":35,"authors":36,"images":37,"translations":38,"content":39},10373,"published","2023-06-20T21:49:34.000Z","2025-08-31T23:14:40.000Z","Out now: Annual Report 2022","News","We are delighted to publish our [2022 Annual Report](https:\u002F\u002Far.baselgovernance.org\u002F), this year in a new interactive version.\n\nThe Annual Report spotlights eight stories from our work around the world. They illustrate not just _what we do,_ but _how we work_ to achieve real and lasting progress in the fight against corruption.\n\n*   How we seek to change behaviours using a range of prevention and enforcement tools.\n*   Our continual efforts to encourage dialogue between stakeholders.\n*   The fact that people are at the heart of our work.\n*   Keeping up with the changing nature of corruption by fostering virtuous learning circles and helping practitioners to help each other.\n\nWe take the opportunity to thank Professor [Mark Pieth](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fmark-pieth-fighting-corruption-basel-institute-and-beyond), our Co-Founder and President for nearly 20 years, and to welcome his successor Peter Maurer.\n\nWe also highlight two long-standing members of our Management Group who are taking a step back after long and productive careers: [Gemma Aiolfi](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fevolutions-anti-corruption-compliance-hope-future), Head of Compliance and Collective Action until 2022, and [Phyllis Atkinson](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fpersonal-history-icar-training-qa-phyllis-atkinson), Head of Training at our International Centre for Asset Recovery until July 2023.\n\nOur achievements are shared success stories, jointly realised with our valued partners in government and international organisations, civil society and the private sector – to whom we are immensely grateful. As we move forward into our 20th year, we remain focused on a world of peace, where prosperity, equality and progress may thrive and corruption is crushed.\n\n*   [Read the Annual Report online](https:\u002F\u002Far.baselgovernance.org\u002F)\n*   [Download the PDF](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2023-06\u002FAR%202022%20DIGITAL.pdf)","2023-06-20",[14],"","out-now-annual-report-2022-2470",[14],2470,[],[],null,[22],"Main page",{"id":24,"storage":25,"filename_disk":26,"filename_download":27,"title":9,"type":28,"created_on":29,"modified_on":29,"charset":20,"filesize":30,"width":31,"height":32,"duration":20,"embed":20,"description":20,"location":20,"tags":20,"metadata":33,"focal_point_x":20,"focal_point_y":20,"tus_id":20,"tus_data":20,"uploaded_on":29},"9245b10d-08f4-436a-9a5b-371305b49c8c","local","9245b10d-08f4-436a-9a5b-371305b49c8c.webp","tmp.webp","image\u002Fwebp","2025-05-12T21:11:53.000Z",65314,1400,932,{},[],[],[],[],[],[],[41,81,111,134,158,180,204,226,249],{"id":42,"body":43,"status":6,"type":44,"date":45,"slug":46,"title":47,"image":48,"countries":49,"topic":50,"activity":53,"tags":58,"nid":66,"topics":67,"activities":69,"authors":70,"images":72,"websites":20,"area":20,"programme":20,"language":73,"translations":74,"translation_of":20,"user_created":75,"date_created":76,"user_updated":77,"date_updated":78,"content":79,"link":80},10587,"_This article is adapted from the_ [_2024 Basel AML Index public report_](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fbasel-aml-index-2024)_._\n\nPrivate companies and governments invest significant resources in efforts to combat money laundering and related financial crimes. Financial institutions alone spent an [estimated USD 206 billion globally](https:\u002F\u002Frisk.lexisnexis.com\u002Fglobal\u002Fen\u002Finsights-resources\u002Fresearch\u002Ftrue-cost-of-financial-crime-compliance-study-global-report) on anti-money laundering (AML) compliance in 2023 – and that figure is rising. Yet illicit assets continue to flow through and outside of regulated financial systems. Confiscation rates are still very low, with a long way to go before asset recovery becomes an effective deterrence to financially motivated crimes.\n\nThis is a disaster for countries deprived of [desperately needed funds for development](https:\u002F\u002Functad.org\u002Fsystem\u002Ffiles\u002Fofficial-document\u002Faldcafrica2020_en.pdf), while also negatively impacting on [economies](https:\u002F\u002Fwww.imf.org\u002Fen\u002FBlogs\u002FArticles\u002F2023\u002F12\u002F07\u002Ffinancial-crimes-hurt-economies-and-must-be-better-understood-and-curbed), [security](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Fframing-financial-crime-security-threat) and the health of our [planet](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fwp-50).\n\nIt is right to question whether we are on the path to success, and indeed what we mean by success in the fight against money laundering and related financial crimes. This article looks at what data we have and what else we should consider in answering this question.\n\n### 1 Are we making progress in terms of international standards?\n\nA very basic question is whether countries and regions are at least in line with minimum international standards for AML set by the FATF.\n\nWhile it is important to [question](https:\u002F\u002Fwww.rusi.org\u002Fexplore-our-research\u002Fpublications\u002Fcommentary\u002Fwhats-point-financial-action-task-force-standards) FATF data and standards, and to identify [abuses](https:\u002F\u002Fwww.rusi.org\u002Fexplore-our-research\u002Fprojects\u002Fcharting-authoritarian-abuses-fatf-standards) and [unintended consequences](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Fpublications\u002FFinancialinclusionandnpoissues\u002FUnintended-consequences-project.html), ultimately they are the foundation of a harmonised global framework aimed at reducing opportunities for criminals to hide and launder illicit funds.\n\n#### _Technical compliance: fewer black holes on the map_\n\nFirst, the good news. Technical compliance with the FATF’s 40 Recommendations has, on average, increased by 12 percentage points globally since the start of the fourth round of evaluations in 2013. Much of that improvement comes from lower-performing countries catching up with the others. This indicates that more countries are at least meeting basic standards of an AML legal and institutional infrastructure. There are fewer black holes on the map.\n\nTo reach the 12 percentage point figure, we analysed data on 113 countries and jurisdictions that had both mutual evaluation reports (MERs) and subsequent follow-up reports (FURs) from the FATF.\n\nThe greatest progress has taken place in the area of preventive measures and targeted financial sanctions. The following table indicates the highest level of progress in technical compliance with FATF Recommendations across all 113 jurisdictions assessed with MERs and FURs:\n\nRecommendation\n\nAverage technical compliance\n\nR.7: Targeted financial sanctions – proliferation of weapons of mass destruction\n\n57% (up from 31%)\n\nR.19: Higher-risk countries\n\n74% (up from 51%)\n\nR.12: Politically exposed persons\n\n73% (up from 51%)\n\nR.16: Wire transfers\n\n71% (up from 50%)\n\nR.22: DNFBPs – Customer due diligence\n\n59% (up from 40%)\n\nR.6: Targeted financial sanctions – terrorism and terrorist financing\n\n62% (up from 43%)\n\nIt is good to see progress in R.22 on designated non-financial businesses and professions (DNFBPs), since this has traditionally been an area of low performance globally and a frequently criticised weakness in AML systems.\n\nThe progress brings hope that more countries have now imposed stricter customer due diligence requirements for gambling businesses, improved record-keeping standards on customer information and transactions, increased the coverage of customer due diligence requirements to relevant professionals such as property developers and precious metal dealers, and increased the responsibilities and obligations for legal professionals.\n\nWhile improvements in most Recommendations may show real progress across countries, the dynamics in R.16 on wire transfers are complicated by the increase in new payment systems and methods that are not captured by this Recommendation.\n\nIn early 2024, the FATF conducted [public consultations](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Fpublications\u002FFatfrecommendations\u002FR16-public-consultation-Feb24.html) on possible amendments to R.16 to reflect this evolution in payment systems and to increase the transparency of cross-border payments. It may be that stricter requirements under R.16 will lead to a rapid deterioration in compliance in the next period.\n\n#### _Regional picture: closing the gap_\n\nIn general, countries and regions with low scores in technical compliance with the FATF Recommendations are catching up, including as a result of being [grey listed](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Ffatf-grey-list-truth-and-myths). The top 20 countries and jurisdictions in terms of progress are mostly in Sub-Saharan Africa and Latin America and the Caribbean, followed by East Asia and Pacific, regions with low average performance previously.\n\nThe following table shows countries with the highest level of progress in technical compliance with FATF Recommendations, out of all those assessed with MERs and FURs. Countries with an asterisk (\\*) are those that are or have been on the FATF grey list.\n\nProgress between mutual evaluation report and latest follow-up report\n\nCountries and jurisdictions (progress in percentage points)\n\n40–52 percentage points\n\nMauritius\\* (52), Botswana\\* (50), Vanuatu\\* (49), Mauritania (48), Uganda\\* (40)\n\n25–39 percentage points\n\nPakistan\\* (33), Iceland\\* (33), Saint Lucia (29), Bahamas\\* (28), Sri Lanka\\* (27), Zimbabwe\\* (26)\n\n20–25 percentage points\n\nMongolia\\* (24), Kenya\\* (24), Norway (24), Costa Rica (23), Morocco\\* (23), Fiji (22), Jamaica\\* (22), Bhutan (21), Trinidad and Tobago\\* (21), Tunisia\\* (20)\n\nThese leaps in performance are not the norm, however: more than half of the assessed countries made progress of less than 10 percentage points.\n\n#### _Effectiveness is falling_\n\nMore challenging, and more depressing, is to assess changes in effectiveness according to the FATF’s 11 Immediate Outcomes (IOs). FATF follow-up reports do not currently reassess countries against these effectiveness criteria. At the global level, however, we can see that effectiveness is decreasing. And that decrease is happening from an already very low base.\n\nWe analysed the difference in global effectiveness scores as the FATF increased its coverage of fourth-round evaluation reports from 115 countries and jurisdictions in 2021 to 178 in 2024.\n\nAverage effectiveness dropped from 30 percent in 2021 to 28 percent in 2023 and remained at that low level in 2024. That means newly assessed countries have similarly low levels of effectiveness as those assessed in earlier years.\n\nWhat’s falling the most? The following table displays the IOs with the lowest effectiveness scores on average across all jurisdictions assessed with mutual evaluation reports. All of them dropped still further between 2021 and 2024:\n\nImmediate Outcome (paraphrased)\n\nAverage effectiveness\n\nIO7: Money laundering investigations, prosecutions and effective, proportionate and dissuasive sanctions\n\n20% (down from 21% in 2021)\n\nIO5: Legal persons and arrangements prevented from misuse for money laundering and terrorist financing (ML\u002FTF); beneficial ownership information available to competent authorities\n\n21% (down from 22%)\n\nIO4: Financial institutions and DNFBPs apply AML\u002FCFT preventive measures commensurate with their risks and report suspicious transactions\n\n22% (down from 24%)\n\nIO11: Prevention of financing of proliferation of weapons of mass destruction\n\n22% (down from 24%)\n\nIO3: Appropriate supervision according to a risk-based approach\n\n23% (down from 26%)\n\nIO10: Prevention of terrorist financing \u002F abuse of non-profit sector\n\n24% (down from 27%)\n\nEven in the IOs with the highest average performance globally across all jurisdictions assessed with MERs, we see decreasing effectiveness as more countries are assessed:\n\nImmediate Outcome (paraphrased)\n\nAverage effectiveness\n\nIO2: International cooperation on information, financial intelligence and evidence against criminals and assets\n\n44% (down from 49% in 2021)\n\nIO1: Risks understood and domestic coordination to combat ML\u002FTF and proliferation financing\n\n36% (down from 38%)\n\nIO6: Financial intelligence and other information used investigations\n\n34% (down from 37%)\n\nIO9: Terrorist financing investigations, prosecutions and effective, proportionate and dissuasive sanctions\n\n33% (down from 37%)\n\nIO8: Proceeds and instrumentalities of crime confiscated\n\n27% (down from 29%)\n\nIO8 on proceeds and instrumentalities of crime confiscated dropped despite hopes for a rise, as [asset recovery was an FATF priority](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Ftopics\u002Fasset-recovery.html) in 2022–2023.\n\nThe big picture? Overall, countries’ AML frameworks are gradually becoming more technical compliant with the global standards but less effective in practice.\n\n### Effectiveness along the asset recovery chain\n\nData from the Basel AML Index Expert Edition Plus, which includes the full FATF dataset, can help to identify weak links in what we call the asset recovery “chain” – all the steps from preventing and detecting illicit financial flows through to their confiscation and restitution.\n\nApplying this concept to FATF data on effectiveness can give us a simplified picture of what might be weak links in the chain. The following figure shows FATF average effectiveness ratings applied to key links in the asset recovery “chain”:\n\n> The concept of the asset recovery chain is at the heart of the support provided by our International Centre for Asset Recovery (ICAR) to partner countries, including Basel AML Index-based technical assistance in strengthening understanding of and resilience to money laundering risks.\n\n### 2 What other data and metrics can we use to better measure success in practice?\n\nFATF data is the best that is available for comparing money laundering vulnerabilities in different countries and jurisdictions, as the same assessment methodology is applied globally.\n\nYet alone it is clearly not enough to give an accurate picture of success. Critics point out that many countries with high performance in both technical compliance and effectiveness are favoured destinations for those seeking to stash, spend and launder money.\n\nThis is why the Basel AML Index methodology takes into account a variety of indicators beyond the quality of a country’s AML framework as assessed by the FATF. They make it easier to evaluate financial crime risk exposure more widely as well as the functioning of the system as a whole. They also make it possible to see where data is missing or could be misleading.\n\nMany of these metrics are useful in evaluating whether systems are working in practice not only to address illicit financial flows as an end in itself but considering wider implications for people and societies.\n\nThe following figure offers some illustrative examples. See the [methodology](https:\u002F\u002Findex.baselgovernance.org\u002Fmethodology) online for more information and subscribe to the Expert Edition (free for most users outside the private sector) to view and filter the full data.\n\n### 3 Clearer goals, better evidence\n\nIt may seem obvious to readers, but it still needs to be stressed: the fight against financial crime is not a narrow technical issue but a multi-dimensional challenge that is interlinked with many aspects of our lives at both the national and global level. A single metric alone will never be sufficient to measure success.\n\nMeasuring success depends on defining the ultimate objective. The FATF’s purpose has always been to “protect financial systems and the broader economy”. This may be a useful intermediate goal. But we support rising calls to position the fight against money laundering and related financial crimes as ultimately key to achieving a more peaceful, just and sustainable world.\n\nAchieving this ambition requires a nuanced understanding of the broader factors driving money laundering risk and their far-reaching consequences, as illustrated above. It also demands robust evidence of the effectiveness and tangible benefits of AML measures, to counter scepticism and bolster the case for sustained investment in these efforts\n\nCrucially, building an effective AML system is not merely a technical task for a single government department or a compliance team. It is a collective mission that requires collaboration across sectors, industries and borders. Only through a shared commitment and clear vision of our end goal can we create a world where financial systems are resilient to exploitation for criminal purposes and where AML measures support broader societal goals.\n\n### Learn more\n\n*   Read the [13th annual Public Edition report of the Basel AML Index](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fbasel-aml-index-2024).\n*   Explore the [Basel AML Index](https:\u002F\u002Findex.baselgovernance.org\u002F).","Blog","2025-02-20","anti-money-laundering-what-is-success-2768","Anti-money laundering: what is success?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F947bee1f-add9-40fb-9346-e20626e7c915?width=1000&height=650&format=webp&quality=80",[],[51,52],"Anti-Money Laundering","Asset Recovery",[54,55,56,57],"Basel AML Index","Research","Reports","Insights",[59,62],{"tags_id":60},{"id":61,"name":54},1346,{"tags_id":63},{"id":64,"name":65},818,"Anti-money laundering",2768,[51,68],"Asset Recovery and Enforcement",[54,55,56,57],[71],1362,[],"English",[],"03bebfd8-0b40-4a2a-820d-b9d9c13b9de6","2025-12-04T11:01:47.000Z","3d9ff205-1640-4f34-b5b6-86977f51bbd6","2026-05-29T22:22:39.000Z",[],"\u002Fresources\u002Fnews\u002Fanti-money-laundering-what-is-success-2768",{"id":82,"body":83,"status":6,"type":44,"date":84,"slug":85,"title":86,"image":87,"countries":88,"topic":89,"activity":91,"tags":94,"nid":99,"topics":100,"activities":101,"authors":102,"images":104,"websites":105,"area":20,"programme":20,"language":20,"translations":106,"translation_of":20,"user_created":75,"date_created":107,"user_updated":108,"date_updated":8,"content":109,"link":110},10313,"_A summary of Juhani Grossmann’s remarks at [Basel Gold Day II](https:\u002F\u002Fwww.pieth.ch\u002Fgold-day-II) on corruption risks in gold supply chains. He highlights experiences from our [Green Corruption](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption) team, explains why recycled gold might not be as ethical as it sounds, and ends with two broad recommendations for companies, state-owned enterprises and regulators in the gold trade._\n\nGold is a fascinating commodity for those of us seeking to address corruption linked to environmental crimes. Its value chain is high in corruption risks, not least due to its high financial value to size ratio, complex sourcing structure and high emotive value. The origin of a particular piece of gold is easy to obscure through refining. And as Mark Pieth’s book _[Gold Laundering](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fgold-laundering-dirty-secrets-gold-trade-and-how-clean)_ points out, the consequences of corruption in the gold trade are severe for people and for the environment.\n\nDespite the plethora of standards around gold, and the detailed and advanced [due diligence guidance](https:\u002F\u002Fwww.oecd.org\u002Findustry\u002Finv\u002Fmne\u002Fgoldsupplementtotheduediligenceguidance.htm), their implementation is patchy and effectively excludes significant parts of the globe. The OECD has tackled this issue with various practical resources including some excellent [FAQs related to corruption risks in the mining sector](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fwelcoming-oecds-new-faqs-corruption-risks-mineral-supply-chains). The [Financial Action Task Force (FATF) report on gold](https:\u002F\u002Fwww.fatf-gafi.org\u002Fdocuments\u002Fdocuments\u002Fml-tf-risks-and-vulnerabilities-gold.html) also highlights numerous money laundering and corruption challenges.\n\n### Corruption: a multi-use tool to undermine the gold trade\n\nOur global Green Corruption teams see many of those concerns playing out in real life, including:\n\n*   In Indonesia, Parliamentary Speaker Setya Novanto was caught on tape trying to [extort](https:\u002F\u002Fwww.ft.com\u002Fcontent\u002Fc65b8c78-12cf-11e6-91da-096d89bd2173) a private jet from the operator of the Grasberg gold mine as part of the government’s takeover of the mine. The Governor of Southeast Sulawesi, Nur Salam, operated a complex web of [corruption-fuelled mining licenses](https:\u002F\u002Fantikorupsi.org\u002Fen\u002Farticle\u002Fdisappointing-verdict-nur-alam) that was constantly adjusted in favour of the highest bidder. Both officials were subsequently convicted of corruption offences.\n*   In Peru, we see the highly publicised risks in [Madre de Dios](https:\u002F\u002Fstories.swissinfo.ch\u002Fgold-peru-switzerland-mining-metalor#231918), to take just one example, and sophisticated efforts to smuggle gold from informal artisanal and small-scale mines (ASM) into legitimate supply chains.\n*   In Bolivia, gold is crucial to the economy, making up 6.2 percent of GDP. Yet there is also clearly an [urgent need](https:\u002F\u002Fwww.theguardian.com\u002Fworld\u002F2022\u002Foct\u002F19\u002Fbolivia-gold-miners-amazon-madidi) to strengthen the resilience of regulators against untoward influence and corruption in order to protect the integrity of national parks.\n\nIn numerous countries, corruption is used to avoid effective environmental impact assessments, to issue fake export permits and certifications and to ward off inspections. When wrongdoing is uncovered, corruption helps to stymie law enforcement efforts.\n\nThis severely undermines conservation goals and the rights of local communities. It also further complicates assurance inside the gold value chain.\n\n### Recycled gold is no less risky\n\nAs these challenges are well documented in the mined gold sector, and assurances are particular challenging in the ASM field, there is an increasing search for alternative sources of gold to meet the high demand.\n\nSome consider recycled gold (or “recyclable gold” in the [OECD’s terminology](https:\u002F\u002Fwww.oecd.org\u002Findustry\u002Finv\u002Fmne\u002FGoldSupplement.pdf)) to be a safer source since it comes from gold that was already in circulation, primarily in the jewellery industry. Recycled gold now reportedly makes up 25-30 percent of annual gold use. Some companies even market their use of recycled gold as the more ethical choice over freshly mined gold.\n\nOpting for what is considered a lower-risk product has three challenges, however:\n\n*   First, it is not clear what “recycled” gold encompasses. Definitions vary and many participants at Basel Gold Day II agreed they were too broad and vague.\n*   Second, the risk factors for recycled gold are not nearly as well studied and understood as those of mined gold.\n*   Third, the belief that the risk factors are lower might mean less due diligence.\n\nAre corruption risks for recyclable gold different? If so, how? While there is little detailed research on this, here are some initial considerations:\n\n*   The corruption risks inherent in the original feedstock have not disappeared. While the legal liability for these might be limited, it doesn’t mean the gold is obtained without corruption.\n*   Companies trading recycled gold, according to the Financial Action Task Force (FATF), tend to be itinerant due to their low start-up costs and thus perform only minimal due diligence.\n*   High demand for recycled gold makes it tempting to launder problematic mined gold, for example gold from conflict zones, into the recyclable value chain.\n*   When recycled gold is traded across borders, if faces the same corruption risks related to licenses and permits as mined gold.\n*   The high-cash, low-scrutiny nature of recyclable gold buyers puts them at major risk for money laundering.\n\n### Proper checks, strong internal controls\n\nWhile more research is needed to study the corruption risks related to recycled gold, these are certainly not negligible. What can be done about them?\n\nFirst, companies using recycled gold should apply the [full due diligence](https:\u002F\u002Fwww.oecd.org\u002Fdaf\u002Finv\u002Fmne\u002Fmining.htm) suggested by the OECD, covering the whole value chain where needed according to a risk-based approach.\n\nSecond, regulators and state-owned enterprises involved in the gold trade need to get serious about [managing their internal corruption risks](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fquick-guide-24-internal-controls-and-anti-corruption). This requires strengthening the independence and capacity of internal control, investigation and audit bodies to uncover wrongdoing. It also requires continuous internal corruption risk assessments, the development of mitigation measures, and agile verification of their effectiveness.\n\n### More\n\n*   The Basel Institute’s [Green Corruption](https:\u002F\u002Fbaselgovernance.org\u002Fgreen-corruption) programme provides assistance and capacity building to environmental agencies with enforcement powers, as well as to law enforcement partners targeting environmental crime. The team also works to prevent corruption seeping into regulatory or conservation authorities and state-owned enterprises engaged in activities of high environmental importance.\n*   Learn more about Basel Gold Day in [2020](https:\u002F\u002Fbaselgovernance.org\u002Fnews\u002Fbasel-gold-day-4-golden-opportunities-collectively-raise-standards-gold-supply-chains) and [2022](https:\u002F\u002Fwww.pieth.ch\u002Fgold-day-II).","2022-11-07","corruption-in-gold-mining-and-recycling-2305","Corruption in gold mining and recycling","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F6d48ecfa-4513-4464-81b2-9eb3d414f3c4?width=1000&height=650&format=webp&quality=80",[],[90],"Green Corruption",[92,57,93],"Events","Presentations",[95],{"tags_id":96},{"id":97,"name":98},1303,"Environment",2305,[90],[92,57,93],[103],1156,[],[22],[],"2022-11-07T11:01:26.000Z","b0662e2a-864d-4888-a1b7-4342b7570b30",[],"\u002Fresources\u002Fnews\u002Fcorruption-in-gold-mining-and-recycling-2305",{"id":112,"body":113,"status":6,"type":44,"date":114,"slug":115,"title":116,"image":117,"countries":118,"topic":119,"activity":120,"tags":121,"nid":122,"topics":123,"activities":124,"authors":125,"images":128,"websites":20,"area":20,"programme":20,"language":73,"translations":129,"translation_of":20,"user_created":75,"date_created":130,"user_updated":77,"date_updated":131,"content":132,"link":133},10584,"As cryptoassets and other blockchain-based tokens enter the mainstream, alarm bells are ringing about the risks of their misuse. The technology is neutral in itself, but like any mechanism to transfer value, it can and does facilitate a wide range of crimes.\n\nAnd it’s not just scams, hacks and ransomware attacks. Cryptoassets are now seen in practically all crime types, from drug trafficking and terrorist financing to sanctions evasion, and increasingly as a tool for laundering the proceeds of those crimes.\n\nWhen it comes to the links between crypto and _corruption_, research and closed case examples are still scant. But since both are important enablers of crime, it’s vital to better understand how they intersect.\n\nThis blog outlines some basic areas of concern. Despite the gaps in data and analysis, one thing is clear. While the technologies are fairly new, the corrupt practices are not: they are simply manifesting in different ways.\n\n> _Crypto and corruption: what we mean_\n> \n> _In this blog we take a broad view of both crypto and corruption. By “crypto”, we mean cryptoassets such as Bitcoin (BTC) and Ether (ETH) as well as stablecoins tied to fiat currencies such as Tether (USDT) and USD Coin (USDC); plus other digital tokens that run on public, decentralised blockchains. The scope also includes the companies, industries and services built around crypto, as well as the systems for their regulation and supervision and for law enforcement. “Corruption” refers not just to bribery, but to any abuse of entrusted power for undue benefit – whether financial or political, whether personal or for a collective entity._\n\n### 1 Crypto for bribery\n\nIs crypto a brilliant way to pay bribes and kickbacks? Transfers are pseudonymous after all – linked to long wallet addresses like _1Lbcfr2sAHTG9CgdQo3HTMTkV7LK4ZnX75_ rather than names. Transfers can be made directly between individuals, through decentralised platforms or peer-to-peer transactions, which avoids awkward questions about who is who and where the money comes from.\n\nCrypto holdings are easier to keep private, so might not be included in the asset declarations of politically exposed persons keen not to reveal all of their hidden wealth. And it’s fast and easy: you can transfer crypto to any person, anywhere in the world at the touch of a button. That makes it superficially more attractive than an international bank transfer, and less hassle and personal risk than travelling to another continent carrying suitcases stuffed with cash.\n\nSome clearly think crypto is great for bribes:\n\n*   In 2024, a Ukrainian Member of Parliament was [sentenced to eight years in prison](https:\u002F\u002Fhacc-decided.ti-ukraine.org\u002Fen\u002Fnews\u002Fnardepa-odarcenka-zasudili-do-8-rokiv-vyaznici) for offering a bribe of EUR 46,000 in bitcoin to secure funding for reconstruction projects.\n*   Crypto payments were allegedly made to a former senior official at the China Securities Regulatory Commission in return for [abuses of power](https:\u002F\u002Fwww.ccn.com\u002Fnews\u002Fcrypto\u002Fyao-qian-china-cbdc-crypto-corruption\u002F) in making appointments and securing loans – alongside expensive liquor and invitations to banquets.\n*   In June 2025, two employees of the state-owned China Construction Bank were charged in Hong Kong with bribery and other offences: they allegedly accepted around USD 470,000 in crypto in exchange for [authenticating false documents](https:\u002F\u002Fwww.artemis.bm\u002Fnews\u002Fchina-construction-bank-manager-accused-of-accepting-bribes-from-vesttoo-employee\u002F) for the now-bankrupt Israeli firm Vesttoo.\n\nYet the use of crypto for bribery has a unique vulnerability: transactions on public blockchains are permanent and publicly visible. If investigators can verifiably link an address to a suspect, the evidence of the bribery remains accessible forever.\n\nSadly, it’s pretty hard to identify bribes or kickbacks being paid unless you already know there’s a bribery scheme or you know the addresses of suspected accomplices. That might explain why major crypto bribery cases haven’t surfaced (yet!).\n\n### 2 Laundering proceeds of corruption using crypto\n\nWhat about laundering the proceeds of corruption? For those with a lot of dirty money to launder, crypto adds a new dimension to the playbook.\n\nSure, keep the shell companies and offshore bank accounts, the trusts and real estate and gambling schemes, the hawala networks. Now you can add to the mix by converting corrupt proceeds into crypto, converting these to other coins, hopping across blockchains and using privacy-enhancing technologies to throw investigators off track.\n\nAs adoption of tokenised assets grows – digital representations of financial or real-world assets – we can expect corrupt actors to buy not only villas in Tuscany and ski apartments in Switzerland, but tokens representing these. And while you can’t ski on a digital token, it is likely attractive to money launderers to be able to trade in a broad range of investments while keeping the beneficial owner hidden.\n\nAre corrupt actors using crypto to launder their funds? There’s little direct evidence, but it does seem likely. Corrupt individuals have long relied on professional money laundering services, often provided by lawyers and accountants. [Europol](https:\u002F\u002Fwww.europol.europa.eu\u002Fpublications-events\u002Fmain-reports\u002Fsocta-report) warns that these professionals,\n\n> “increasingly with specialised knowledge in digital asset trading, have developed parallel, underground financial systems that operate outside the regulatory frameworks governing legal financial institutions”.\n\nAnd we do see that law enforcement is starting to take down organised groups that specialise in laundering illicit funds, including through crypto.\n\nAn [Australian takedown](https:\u002F\u002Fwww.ato.gov.au\u002Fmedia-centre\u002Falleged-qld-money-laundering-organisation-dismantled) of an organised money laundering operation in June 2025, for example points to millions of tainted Australian dollars laundered through crypto exchanges as well as bank accounts, couriers, a car dealership and a sales company. Some outfits specialise in a specific clientele: in the Europol-coordinated [Operation Karasu](https:\u002F\u002Fwww.europol.europa.eu\u002Fmedia-press\u002Fnewsroom\u002Fnews\u002F17-providers-of-criminal-banking-services-arrested) in 2025, authorities arrested 17 suspects alleged to be providing money laundering services to Chinese- and Arabic-speaking clients using hawala banking, cash transactions and crypto.\n\nThe largest blockbuster takedown to date is the [October 2025 indictment of the Chairman of Prince Group](https:\u002F\u002Fwww.justice.gov\u002Fopa\u002Fpr\u002Fchairman-prince-group-indicted-operating-cambodian-forced-labor-scam-compounds-engaged), a Cambodia-based multinational business enterprise, and the filing of a forfeiture action for more than 127,000 bitcoin – approximately USD 15 billion at the time of seizure. The press release described the use of professional money laundering operations and pointed to highly sophisticated techniques, such as “spraying” stolen cryptoassets across multiple addresses to obscure the trail of the funds.\n\nCommenting on the indictment, the head of the U.S. Drug Enforcement Administration highlighted the role of corruption in such schemes. He explained how: \n\n> complex criminal schemes \\[such as this\\] exploit global financial systems and emerging technologies to conceal illicit proceeds. These networks operate at the intersection of drug trafficking, corruption, and financial crime, threatening the stability of institutions and communities, alike.\n\n### 3 Corrupt law enforcement in crypto cases\n\nSay you’re a law enforcement officer – a public servant. You’re one of the few in your agency with the technical skills to trace and seize cryptoassets suspected of being involved in crime.\n\nYou see an opportunity to supplement your salary by stealing crypto during an investigation or taking payments from criminals to leave their holdings in peace. Nobody will know – surely?\n\n*   That’s what two US agents from the [Drug Enforcement Administration](https:\u002F\u002Fwww.justice.gov\u002Farchives\u002Fopa\u002Fpr\u002Fformer-dea-agent-sentenced-extortion-money-laundering-and-obstruction-related-silk-road) and [Secret Service](http:\u002F\u002Fwww.justice.gov\u002Farchives\u002Fopa\u002Fpr\u002Fformer-secret-service-agent-sentenced-scheme-related-silk-road-investigation) thought, when they abused their power as law enforcement officers and their access to government-controlled wallets to steal tens of millions of USD in bitcoin linked to the takedown of the illicit Silk Road online marketplace.\n*   In Russia, a former investigator was found guilty in 2023 of [accepting bitcoin bribes](https:\u002F\u002Fcointelegraph.com\u002Fnews\u002Frussia-seizes-10-million-bitcoin-from-official-biggest-bribery) equivalent to tens of millions of US dollars from an organised crime group in order not to confiscate their bitcoin holdings – estimated at USD 138 million at the time.\n*   In Iran, senior intelligence officers of the Revolutionary Guard are alleged to have gained around USD 21 million during the takedown of the Cryptoland exchange: following the CEO’s arrest, they [stole and sold his tokens](https:\u002F\u002Fwww.iranintl.com\u002Fen\u002F202503309549) before the arrest was made public and the tokens’ value collapsed. \n\nIt’s not uncommon for law enforcement officers to go rogue, or for bribes to be paid to influence law enforcement actions or judicial proceedings. So authorities don’t just need to build capacity to go after crypto-related crime. They also need to look out for crypto-related corruption risks among their own ranks, including entities such as asset management offices that have custody over seized and confiscated cryptoassets.\n\n### 4 When the crypto industry meets politics\n\nCrypto is a fast-evolving industry that demonstrates genuinely exciting financial and technological innovation. It’s no wonder that politicians all over the world are getting interested.\n\nCorrupt behaviour by politicians involving the crypto industry is still a realm of speculation, as data on real-world cases is sparse. But red flags for corruption are a common feature of all fast-growing, profitable industries with highly technical aspects, like mining and defence. So, it is sensible to look out for common risks, which span from licencing schemes to the shaping of cryptoasset regulations or the resources put into enforcement.\n\nWhen it comes to public trust in government, even suspicions of crypto-related wrongdoing matter. Examples range from a [political financing scandal in Colombia](https:\u002F\u002Fwww.theblock.co\u002Fpost\u002F293857\u002Fcolombian-president-crypto-donation-campaign-2022-daily-cop) to [graft accusations in Venezuela](https:\u002F\u002Fwww.barrons.com\u002Fnews\u002Fvenezuela-kills-off-petro-cryptocurrency-1e2b0317) and to allegations of [crypto-related irregularity affecting the US President](https:\u002F\u002Fwww.economist.com\u002Fleaders\u002F2025\u002F05\u002F15\u002Fcrypto-has-become-the-ultimate-swamp-asset) and his family.\n\nAnd in the Czech Republic, when the Justice Ministry [accepted a bitcoin donation](https:\u002F\u002Fwww.occrp.org\u002Fen\u002Fnews\u002Fbitcoin-scandal-triggers-czech-government-crisis) worth around USD 46 million from a convicted criminal, the ensuing scandal triggered a public investigation and the resignation of the Justice Minister; some feared it might even topple the government.\n\n### 5 Corruption fuelling organised crime and state capture\n\nThe link between crypto and corruption with possibly the most damaging social impact is its role in enabling criminal gangs to carry out cybercrime and launder money with impunity.\n\nAs detailed in a 2025 UNODC report on [corruption and cybercrime](https:\u002F\u002Fwww.unodc.org\u002Froseap\u002Fuploads\u002Fdocuments\u002FPublications\u002F2025\u002F2025.10.21_The_Nexus_Between_Cybercrime_and_Corruption.pdf), corruption both creates the “permissive environment” that allow cybercrime operations to flourish and “enables many daily operations of cybercriminal networks.”\n\nIn [Southeast Asia](https:\u002F\u002Fwww.unodc.org\u002Froseap\u002Fen\u002F2025\u002F04\u002Fcyberfraud-inflection-point-mekong\u002Fstory.html), for example, a separate UNODC report depicts how industrial-scale scam centres run by organised crime groups generate huge amounts of illegal revenue – mostly in crypto. Despite often being plainly identified in public reports, they remain operational and engage in human trafficking to obtain unwilling workers. The report emphasises “high rates of corruption which criminal actors can leverage” to continue their scam operations unmolested.\n\nUNODC warns that the revenue generated by scam centres, coupled with the ability to easily launder the stolen crypto, is increasing the power and influence of organised crime groups as well as their financial liquidity. And that gives them even more ability to corrupt and capture politicians and states.\n\nThat may already be happening, according to a November 2025 _Economist_ report on [allegations of political collusion](https:\u002F\u002Fwww.economist.com\u002Fasia\u002F2025\u002F11\u002F20\u002Fthe-politicians-protecting-huge-criminal-networks) in scam operations in Cambodia, the Philippines and Thailand. These have led to the resignation of a deputy finance minister, the jailing of a mayor and a warning from Thailand's deputy leader of the opposition that without action against politicians colluding in scam operations,\n\n> “we’ll wake up to find the country run by crooks in suits\".\n\n### What to do?\n\nCrypto represents an exciting transformation in financial systems. The industry and its underlying technology could improve privacy, efficiency and access to financial markets. This may benefit many people poorly served by today’s centralised systems.\n\nBut without a clear understanding of crypto-related risks and proper safeguards, the industry could create more opportunities for corruption and related financial crimes such as money laundering, terrorist financing and sanctions evasion. Crypto-fuelled corruption could weaken trust in governments and be leveraged to undermine the stability and security of nation states.\n\nAt the Basel Institute, we’re keen to explore better how the worlds of crypto and corruption intersect and how best to mitigate both systemic and day-to-day risks. We’re also committed to building the capacity of anti-corruption and asset recovery practitioners to “follow the money” across blockchains and to connect these to wider financial and criminal investigations.\n\nBeyond training for [individuals](https:\u002F\u002Fbaselgovernance.org\u002Fcrypto-aml-training) and [public agencies](https:\u002F\u002Fbaselgovernance.org\u002FICAR-training), we also bring together people from across sectors and geographies at our annual [Global Conference on Criminal Finances and Cryptoassets](https:\u002F\u002Fbaselgovernance.org\u002F9crc) together with Europol and UNODC. Look out for more on this topic in the coming months!","2025-11-27","crypto-the-ultimate-enabler-of-corruption-2882","Crypto: the ultimate enabler of corruption?","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Fd41fd31d-6c56-48e0-96cc-2be74f18b731?width=1000&height=650&format=webp&quality=80",[],[52],[57],[],2882,[68],[57],[126,127],1360,1361,[],[],"2025-11-27T17:01:44.000Z","2026-05-29T22:22:38.000Z",[],"\u002Fresources\u002Fnews\u002Fcrypto-the-ultimate-enabler-of-corruption-2882",{"id":135,"body":136,"status":6,"type":44,"date":137,"slug":138,"title":139,"image":140,"countries":141,"topic":143,"activity":146,"tags":147,"nid":148,"topics":149,"activities":150,"authors":151,"images":152,"websites":153,"area":20,"programme":20,"language":20,"translations":154,"translation_of":20,"user_created":75,"date_created":155,"user_updated":108,"date_updated":8,"content":156,"link":157},10334,"_Brazil’s huge agricultural sector is no stranger to corruption scandals – but now a group of agribusinesses are working together with government and civil society to raise standards of integrity and prevent corruption from damaging their business opportunities and reputation. This guest blog by Ana Aranha and Jacqueline Oliveira, Anti-Corruption Manager and Anti-Corruption Coordinator at the UN Global Compact Network Brazil, explains how Collective Action is helping the group to collaborate on anti-corruption and achieve tangible change on the ground._\n\nBrazil’s agribusiness is hugely important for both global food security and Brazil’s economy – it accounts for about a fifth of the country’s GDP and generates important revenues and jobs for local people.\n\nBut like any large industry, corruption undermines its effectiveness and harms the environment and human health. Just one example: the [Weak Meat case](https:\u002F\u002Fmoney.cnn.com\u002F2017\u002F03\u002F22\u002Fnews\u002Feconomy\u002Fbrazil-meat-scandal) (_Carne Fraca_ in Portuguese) revealed that some meat producers were allegedly doling out bribes to inspectors to certify meat that was either rotten or tainted with salmonella. Brazil's largest meat producers, BRF and JBS, were among those involved.\n\nCoupled with reports of [massive deforestation](https:\u002F\u002Fwww.cfr.org\u002Fin-brief\u002Fdeforestation-brazils-amazon-has-reached-record-high-whats-being-done) to create land for livestock and soy, such revelations have immensely tainted the industry’s reputation.\n\n### Fertile ground for anti-corruption Collective Action\n\nUltimately, corruption and even perceptions of corruption are bad for business. That is why some of Brazil’s leading agribusiness companies proved eager to join efforts to improve governance practices and raise ethical standards in the industry.\n\nSince its launch in 2021, Brazil’s [Food and Agriculture Anti-Corruption Collective Action Initiative](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Finitiatives\u002F1992) has grown to include 18 companies and six business associations, and entered into a partnership with the Brazilian Ministry of Agriculture.\n\nFor participating companies, engagement in Collective Action provides a path to reducing the risks of future corruption cases while being directly involved in setting up new integrity mechanisms that also reinforce their social and environmental commitments.\n\nFrom its inception, the initiative has received vital support from the [Global Compact Network Brazil](https:\u002F\u002Fwww.pactoglobal.org.br\u002F),  part of the United Nations Global Compact. The 1,500-strong network has built a strong reputation for creating spaces for dialogue to promote Collective Action to address corruption in the private sector in recent years. As a neutral body, the Global Compact Network Brazil can promote dialogue and action, and offer a dedicated platform that facilitates discussion and avoids the perceived risk of anti-competitive conduct.\n\nAs in any Collective Action, engagement with government plays a vital role. That is why the participation of Brazil’s Ministry of Agriculture is so important. In 2022, for example, the Ministry incentivised engagement in the Collective Action initiative by making membership a prerequisite to applying for its annual agribusiness integrity award.\n\n### Building the business case for Collective Action in agribusiness\n\nBuilding on the Global Compact Network Brazil’s prior experience in establishing two Collective Action initiatives in the [engineering and construction](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Finitiatives\u002F1803), and [urban cleaning and solid waste](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Finitiatives\u002F1805) sectors, the participating companies collaboratively developed the “business case” for their initiative. This clearly defined its objectives and ensured some level of commitment and financial sustainability.\n\nThe main objectives of the initiative are to:\n\n*   change the culture and the reputation of the agribusiness sector, domestically and internationally;\n*   promote a cleaner business environment in the companies as well as in their supply and logistic chains through improved practices and regulations;\n*   incentivise integrity in public-private relationships;\n*   protect the sector as a whole as well as each company and each employee from potential corruption and bribery cases in settings with scarce transparency and accountability mechanisms.\n\nThe companies also agreed on and [published anti-corruption principles and governance rules](https:\u002F\u002Fpactoglobal.org.br\u002Fpg\u002Facao-coletiva-anticorrupcao-da-agroindustria). These included policies for the decision-making process, transparency and confidentiality measures, a communication plan, criteria for including and excluding members, and criteria to end the project. These initial milestones were crucial to building trust among all stakeholders and setting up the initiative for success.\n\n### Raising the bar: developing risk-based anti-corruption best practices\n\nAs a next step, the initiative developed a corruption risk assessment for the sector based on an analysis of participating companies’ main operations and supply chains. The assessment also identified the need for further knowledge material exploring the main threats, risks and regulatory issues that companies may encounter throughout their operation.\n\nThe [Best Practice Guide on Anti-Corruption in Agribusiness](https:\u002F\u002Fcollective-action.com\u002Fexplore\u002Fpublications\u002F2245), launched in April 2022 (and presented here on [YouTube](https:\u002F\u002Fwww.youtube.com\u002Fwatch?v=G0HCP3Hdxj0&t=2s)), is the result of a collaborative effort between all participants of the initiative. It covers the eight highest risk areas identified by the participating companies during the corruption risk assessment and is available in Portuguese and English.\n\nThe Guide’s contributors believe that the path to address corruption and contribute to effective changes of irregular practices is through public commitments.\n\nA representative of BASF, one of the member companies, elaborated:\n\n“The initiative brought to us even more awareness on the importance of individual movements to impact the collective. The materials produced by the group are being very much appreciated by the executives that are using them to communicate integrity messages to their respective teams and with that everybody wins.”\n\n### What to expect\n\nIn terms of activities, in 2023, the initiative’s plan is to develop videos and training materials based on their best practice guide. The training materials will be developed for both companies’ employees on the ground and their counterparts in the public sector.\n\nIn terms of impact, what everyone wants to see is the end of corruption that harms humans and the environment and makes it hard for agribusinesses to operate with integrity. Creating trust and collaboration among stakeholders through Collective Action is the first step to restoring trust in Brazil’s agribusiness sector.\n\n### Learn more\n\n*   See more examples of successful initiatives on the [B20 Collective Action Hub](https:\u002F\u002Fcollective-action.com\u002F) – the Basel Institute’s platform for resources and engagement on anti-corruption Collective Action.\n*   Got questions? Use our free [Collective Action helpdesk](https:\u002F\u002Fcollective-action.com\u002Fget-involved\u002Fhelpdesk) to ask anything you would like to know about Collective Action and related multi-stakeholder approaches for business integrity.","2023-02-14","how-brazilian-agribusinesses-are-working-to-root-out-corruption-through-collective-action-2350","How Brazilian agribusinesses are working to root out corruption through Collective Action","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F4f7ec4ce-f8f3-4987-9433-ada26075ae18?width=1000&height=650&format=webp&quality=80",[142],7202,[144,145],"Collective Action","Private Sector",[57],[],2350,[144,145],[57],[],[],[22,144],[],"2023-02-14T17:01:28.000Z",[],"\u002Fresources\u002Fnews\u002Fhow-brazilian-agribusinesses-are-working-to-root-out-corruption-through-collective-action-2350",{"id":159,"body":160,"status":6,"type":44,"date":161,"slug":162,"title":163,"image":164,"countries":165,"topic":166,"activity":167,"tags":168,"nid":169,"topics":170,"activities":171,"authors":172,"images":174,"websites":175,"area":20,"programme":20,"language":20,"translations":176,"translation_of":20,"user_created":75,"date_created":177,"user_updated":108,"date_updated":8,"content":178,"link":179},9740,"We are delighted to release our Annual Report 2019 – [view it here](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-05\u002FBasel%20Institute%20Annual%20Report%202019.pdf).\n\nThe report highlights our achievements in the past year, but it also looks forward to the future. It is a chance to reflect on how corruption and governance are changing around the world and how we are adapting to new challenges. It is also a chance to thank, once again, our partners and donors for their unwavering support. \n\nHere is the foreword by Managing Director Gretta Fenner and President of the Board Mark Pieth.\n\n### Corruption and poor governance: enemies of the people\n\nAs we write this note for our annual report, the world has become a different place. A global pandemic is spreading fast, globalisation has come to a virtual standstill, and almost everything we took for granted is no longer a given.\n\nWe have been warned. Not specifically about covid-19, but about the risk of a global pandemic. Yet in many countries we see that structures are not in place and warnings have been ignored for too long. As we are still grappling to understand what is happening, one cannot help but ask, whether governance systems have failed us.\n\nWhen essential services are deprived of funding because it does not fit the political agenda of those in charge, this points to distorted governance systems that fail to set the right priorities for the public good. And can we really disregard the role corruption has played in fuelling this crisis? No, we cannot. It is clear that public officials have received grease payments to turn a blind eye to illegal trade in endangered species and disregard sub-standard hygiene in markets from where the  virus has seemingly spread.\n\nFighting corruption and strengthening governance may not be at the top of most officials’ priority lists right now as they are busy trying to control the spread of the virus and keep mortality levels low. But when we take a step back and have more space to reflect on underlying causes, we will have a terrible re-awakening to the realisation that corruption and bad governance are devastating our world and our lives.\n\nThat’s why at the Basel Institute, we see our mission of combating corruption and strengthening governance not as a cause in itself. Instead, we see it as our contribution to sustainable development, equitable growth, stability, respect for human rights and peace.\n\nOur team has worked hard again in 2019 to make inroads toward these overarching global goals. We are proud of our achievements, and acutely aware how our work interplays with the work of many others, be it in anti-corruption and governance or in other fields. This includes health, where corruption and weak governance compromise the achievement of better development outcomes. \n\nOur partnerships with governments, the private sector, other international organisations and civil society are critical. The covid-19 crisis has shown us like nothing else that we need to come together to go forward.\n\nWe hope that the work we describe in our annual report inspires you. By now, when we write this foreword, we know only too well what topic will dominate the year 2020. We sincerely hope to make a contribution to fighting the root causes of this pandemic, so that we may come out of this tragic crisis not only with losses, but also with a new understanding of our global responsibilities, individually and collectively.\n\n[Download the annual report here](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-05\u002FBasel%20Institute%20Annual%20Report%202019.pdf).","2020-05-17","our-annual-report-2019-looking-back-but-mostly-forward-1747","Our Annual Report 2019: looking back, but mostly forward","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Ffbcf85c1-981c-4bb2-8107-c4a6bde291e6?width=1000&height=650&format=webp&quality=80",[],[14],[56],[],1747,[],[56],[173],1232,[],[22],[],"2022-05-26T22:55:01.000Z",[],"\u002Fresources\u002Fnews\u002Four-annual-report-2019-looking-back-but-mostly-forward-1747",{"id":181,"body":182,"status":6,"type":44,"date":183,"slug":184,"title":185,"image":186,"countries":187,"topic":189,"activity":190,"tags":192,"nid":193,"topics":194,"activities":195,"authors":196,"images":197,"websites":198,"area":20,"programme":20,"language":20,"translations":199,"translation_of":20,"user_created":75,"date_created":200,"user_updated":77,"date_updated":201,"content":202,"link":203},9731,"As we write in our 2019 Annual Report, our [International Centre for Asset Recovery](\u002Fnode\u002F25) continues to be one of the only organisations specialised in the recovery of stolen assets. Our focus is on supporting our partner countries in particularly complex cases and the introduction of new working methods and legal and investigative tools.\n\nIn this short piece published in the Annual Report, Dr Hamilton Castro, Specialised Anti-Corruption Prosecutor in Peru, explains how the impacts of our joint work go far beyond the money recovered:\n\n> In 2019 I celebrated, with my colleagues in the Peruvian justice system and partners at the Basel Institute, a landmark decision in Peru’s first ever asset recovery case based on a new non-conviction-based confiscation law. \n> \n> The case relates to a bank account containing laundered money from a Peruvian navy general who is now deceased. For this reason, a criminal conviction of the general was not possible. The Peruvian courts have declared that the money belongs to Peru and should be returned in line with precedents in cases involving Luxembourg and Switzerland. \n> \n> This case, like many others in my career, has benefited greatly from strategic advice and assistance in international judicial cooperation provided by the Basel Institute’s International Centre for Asset Recovery. The experts’ support in these matters has so far helped my office to recover around USD 35 million in funds that were stashed in foreign accounts and linked to serious acts of state corruption in Peru. \n> \n> I believe the benefits to Peru go far beyond the money recovered. All the cases on which we have worked together are helping to build pathways for greater international collaboration on asset recovery. They are helping to restore citizens’ trust in the judicial system. \n> \n> And our joint achievements deliver an implicit message to criminals: justice may take time, but she does not forget. \n\n### Find out more\n\n*   Read an interview with Dr Hamilton Castro describing the case and its implications in detail in English ([Landmark asset recovery case puts Peruvian non-conviction-based confiscation legislation to the test](https:\u002F\u002Fwww.baselgovernance.org\u002Fblog\u002Flandmark-asset-recovery-case-puts-peruvian-non-conviction-based-confiscation-legislation-test)) and Spanish ([Un caso histórico de recuperación de activos pone a prueba la legislación peruana de Extinción de Dominio](https:\u002F\u002Fwww.baselgovernance.org\u002Fblog\u002Fun-caso-historico-de-recuperacion-de-activos-pone-prueba-la-legislacion-peruana-de-extincion)).\n*   See the submission by the Basel Institute on Governance to the [UNGASS on enabling full cooperation in asset recovery matters](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Frecommendations-ungass-enabling-full-cooperation-asset-recovery-matters), which includes a recommendation on Non-Conviction Based Confiscation (NCBC) measures such as the one used in this case.\n*   Download our [2019 Annual Report](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-05\u002FBasel%20Institute%20Annual%20Report%202019.pdf).","2020-05-31","our-message-to-criminals-justice-may-take-time-but-she-does-not-forget-1760","Our message to criminals: justice may take time, but she does not forget ","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F58c08f24-0f94-4274-970f-09727936347a?width=1000&height=650&format=webp&quality=80",[188],7416,[52],[191],"Partnerships",[],1760,[68],[191],[],[],[22],[],"2022-05-26T22:54:54.000Z","2026-05-29T22:21:52.000Z",[],"\u002Fresources\u002Fnews\u002Four-message-to-criminals-justice-may-take-time-but-she-does-not-forget-1760",{"id":205,"body":206,"status":6,"type":44,"date":207,"slug":208,"title":209,"image":210,"countries":211,"topic":212,"activity":214,"tags":215,"nid":216,"topics":217,"activities":218,"authors":219,"images":220,"websites":221,"area":20,"programme":20,"language":20,"translations":222,"translation_of":20,"user_created":75,"date_created":223,"user_updated":108,"date_updated":8,"content":224,"link":225},9729,"The [Banknote Ethics Initiative](http:\u002F\u002Fwww.bnei.com\u002F) (BnEI) has made great strides since 2013 in promoting the highest standards of integrity and fair competition in the banknote sector. Now it's one of the first business-led initiatives to promote Integrity Pacts as a tool to safeguard banknote-related procurement from corruption risks.\n\nThe high level of confidentiality needed in this sector adds an extra challenge to the mix. The BnEI's Chairman, Antti Heinonen, gives a short insight into the project in the text below, which also appears in our 2019 Annual Report:\n\n> BnEI is a Collective Action that focuses on preventing corruption and compliance with antitrust law within the banknote industry. Central banks are the major customer group of the industry, and BnEI has teamed up with the Basel Institute to develop new preventive approaches to safeguard banknote procurement e.g via Integrity Pacts. \n> \n> The highlight in 2019 was the joint staffing by the BnEI and Basel Institute of an information booth at the 2019 Currency Conference with more than 700 delegates and representation from 70 central banks. \n> \n> The information booth represented an excellent opportunity to make contacts within the target audience, and provided increasing attention and scrutiny by central banks to the integrity practices within the industry. It also resulted in the first invitation by a central bank to provide an in-depth presentation and has provided us with greater insights to better define our strategy going forward. \n\n### Find out more\n\n*   See our news item about how the Basel Institute on Governance and BnEI are partnering to [raise integrity and transparency in the banknote industry](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Fraising-integrity-and-transparency-banknote-industry-through-integrity-pacts) through Integrity Pacts.\n*   Download a flyer on the [BnEI Integrity Pacts project](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-04\u002FBNEI_Basel_flyer.pdf) published in collaboration with the Basel Institute.\n*   Read an article on [Integrity Pacts to Prevent Corruption in Banknote Procurement](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2019-02\u002Fintegritypactsbanknotes.pdf) by Mirna Adjami, published in _Currency News_ in 2018. \n*   Visit our [Integrity Pacts resource site](https:\u002F\u002Fwww.baselgovernance.org\u002Fnode\u002F1526) on the B20 Collective Action Hub.\n*   Download our [2019 Annual Report](https:\u002F\u002Fwww.baselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2020-05\u002FBasel%20Institute%20Annual%20Report%202019.pdf).","2020-06-03","developing-new-preventive-approaches-to-safeguard-banknote-procurement-1759","Developing new preventive approaches to safeguard banknote procurement","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F9be0f1f7-7650-41a2-986f-af4214dc0e2b?width=1000&height=650&format=webp&quality=80",[],[144,213,145],"Integrity Pacts",[191],[],1759,[144,213,145],[191],[],[],[22,144],[],"2022-05-26T22:54:53.000Z",[],"\u002Fresources\u002Fnews\u002Fdeveloping-new-preventive-approaches-to-safeguard-banknote-procurement-1759",{"id":227,"body":228,"status":6,"type":44,"date":229,"slug":230,"title":231,"image":232,"countries":233,"topic":234,"activity":235,"tags":236,"nid":237,"topics":238,"activities":239,"authors":240,"images":242,"websites":243,"area":20,"programme":20,"language":20,"translations":244,"translation_of":20,"user_created":75,"date_created":245,"user_updated":77,"date_updated":246,"content":247,"link":248},9835,"The activities of the [International Centre for Asset Recovery](\u002Fnode\u002F25) (ICAR) in 2018 continued to have impact across all aspects of our core mission: to enable partner countries to investigate complex cases of corruption and money laundering, send criminals to jail and recover stolen assets stashed abroad.\n\nHowever, the amount of hard assets recovered – notably in 2018, the USD 16.5 million recovered with the assistance of our embedded experts in Peru – is just one part of a much wider picture. In line with our [Operational Strategy](\u002Fnode\u002F27) 2017–20 and the ICAR Theory of Change, we believe the lasting impact of ICAR’s work also lies in the softer assets gained along the way.\n\n### Building long-term capacity – the ripple effect\n\nThese softer assets include greater capacity among key anti-corruption officials and institutions, leading to stronger rule of law. In 2018, we trained over 500 officials in 10 countries on financial investigation and asset recovery, as well as new topics such as money laundering using Bitcoin. According to interviews in the context of our training impact assessment, participants have not only learned a lot but changed their practices at work as a result of our input. Staying in touch with them and supporting them with ad hoc advice is part and parcel of ensuring that training leads to sustainable results.\n\nA highlight of the year was our team of local ICAR-certified trainers in Tanzania, who have started rolling out our training programme to their colleagues across the country.\n\nSmoother inter-agency cooperation both domestically and internationally is another key goal of ICAR’s work, since complex financial crimes can only be tackled with a collective effort. Nearly half of the over 100 ongoing cases supported by ICAR experts advanced in 2018 thanks to inter-agency or international cooperation. This has already led to new initiatives to create inter-agency taskforces and international teams, which we will continue to support through 2019 and beyond.\n\n### Creating stronger systems for sustainable development\n\nA typical side effect of ICAR’s in-country case work – particularly where our experts are embedded in partner agencies working side by side with anti-corruption officials – is coming across procedural or policy gaps that make the lives of investigators and prosecutors difficult. When this leads to internal or government-wide reform, our practical insights can help ensure that policymaking is not just a copy-paste of international good practice but locally anchored and contextualised. \n\nOne example is Tanzania’s new international cooperation team within its Prevention and Combating of Corruption Bureau, set up during 2018 with ongoing advice and mentoring from ICAR experts to build on progress in intelligence-gathering from foreign jurisdictions.\n\nIn this way, we believe ICAR’s work in 2018 continues to impact our partner countries’ efforts far beyond recovering assets – as important as that is. It helps strengthen systems and leave a sustainable legacy to deter criminal activity, protect public funds and support the achievement of the Sustainable Development Goals.\n\n### A multidisciplinary approach to tackle complex financial crimes\n\nComplementing our law enforcement and asset recovery-focused assistance, our country programmes are increasingly asked to respond to a growing trend – and need – to become more multidisciplinary in fighting crime. This means more practically connecting asset recovery with countries’ broader anti-corruption and governance agendas.\n\nAn example of that is our programme of work in Malawi, which benefits from additional funding from the UK Department for International Development. The scope has now expanded to include support to the review of the National Anti-Corruption Strategy, fresh engagements with the private sector and assistance with developing innovative research tools and corruption risk assessment strategies. Experts from the Basel Institute’s divisions for Collective Action, Compliance and Public Governance will join ICAR in driving this integrated, multi-faceted approach to combating corruption and building capacity to recover stolen assets.\n\n### Driving innovation in asset recovery techniques\n\nICAR’s flexibility and global network of experts, spanning former prosecutors, lawyers and financial investigators, has been instrumental in helping to introduce new and context-sensitive legislative and technical innovations to support our partner countries’ asset recovery efforts. 2018 saw the first successful use of plea bargaining in a high-profile case in Malawi, the introduction of a structured approach to unexplained wealth cases in Tanzania and the first use of international video evidence and intelligence from hawala transactions in Kenya. In Peru, ICAR experts have contributed significantly to the elaboration of improved non-conviction-based forfeiture legislation introduced in 2018.\n\nThis creative approach to maximising the potential of partner countries’ legislative systems aligns with research by the Basel Institute’s Public Governance team, which emphasises the importance of context in both understanding criminal behaviour and countering it.\n\n2018 at a glance\n----------------\n\n### General\n\n*   In Peru, participation in the recovery of USD 16.5 million in stolen assets from accounts in [Switzerland](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Fswitzerland-return-usd-15-million-stolen-assets-peru-landmark-extrajudicial-agreement) and [Luxembourg](https:\u002F\u002Fwww.baselgovernance.org\u002Fperuvian-judiciary-confiscates-luxembourg-account-montesinos-arms-dealer) belonging to individuals linked to former Peruvian presidential advisor Vladimiro Montesinos. Learn more about ICAR’s work out of our Peru country office in 2018.\n*   Technical assistance and strategic advice on over [100 ongoing cases](\u002Fnode\u002F224) in 10 partner countries.\n*   Introduction in our partner countries of new legal practices including plea bargaining, non-conviction-based forfeiture and prosecuting for unexplained wealth, setup of new dedicated teams on intelligence and international cooperation, and establishment of multi-disciplinary asset recovery offices.\n\n### Training and eLearning\n\n*   [Training](https:\u002F\u002Fwww.baselgovernance.org\u002Fasset-recovery\u002Ftraining-programmes) of over 500 investigators, prosecutors and judges in Financial Investigation and Asset Recovery, Offshore Structures and Mutual Legal Assistance, Corruption in Infrastructure Projects and Procurement, Financial Interviewing Skills and a new course on Money Laundering using Bitcoin.\n*   Training programmes delivered in 10 countries: Azerbaijan, Indonesia, Malawi, Namibia, Tanzania, Peru, Romania, Serbia, Uganda and Ukraine.\n*   Supervision of training programmes delivered by [ICAR-certified local trainers](\u002Fnode\u002F90).\n*   Support to training initiatives led by partner organisations, including with Swiss law firm MME on [FinTech AML Compliance Training](\u002Fnode\u002F755), and with the [Romanian Journalism Development Network](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Ffinal-workshop-mapping-and-visualising-cross-border-crime) on financial investigation for journalists as well as public and private sector investigators.\n*   Blended learning concept applied in Namibia, with an on-site training workshop based on the [Operational Analysis eLearning course](\u002Fnode\u002F80).\n*   Continued partnership with the Egmont Group on developing [eLearning modules](\u002Fnode\u002F26) for Financial Intelligence Units.\n\n### Digital tools\n\n*   Publication of seventh edition of the [Basel AML Index](\u002Fnode\u002F229), an independent ranking that assesses countries’ risk exposure to money laundering, with a record 11,500+ visitors to the Index website in the month of release.\n*   Development of the [Basel Open Intelligence](\u002Fnode\u002F36) tool for financial investigation, ready for launch in 2019.\n\n### Global policy dialogue\n\n*   Continued dissemination of the [Guidelines for the Efficient Recovery of Stolen Assets](https:\u002F\u002Fguidelines.assetrecovery.org\u002F) together with the Swiss Department of Foreign Affairs and StAR Initiative.\n*   Participation in the UNCAC Working Group on Asset Recovery and associated discussions in dedicated Expert Group Meetings on Corruption involving Vast Quantities of Assets.\n*   Support to the development of the Framework for the Return of Assets from Corruption and Crime ([FRACCK](\u002Fnode\u002F920)) agreement between Kenya, Jersey, Switzerland and the UK.\n*   Joint organisation of the 3rd [Global Conference on Criminal Finances and Cryptocurrencies](https:\u002F\u002Fwww.baselgovernance.org\u002Fnews\u002Fglobal-conference-criminal-finances-cryptocurrencies-kicks-europol) with Europol and Interpol.\n*   Support to the development of innovative practices for financial crime litigation as part of our membership in (and Secretariat role for) the [International Academy of Financial Crime Litigators](https:\u002F\u002Fwww.financialcrimelitigators.org\u002F).\n\n### Looking ahead – planned activities in 2019\n\n*   Seek to respond to demands for expanding institutional scope of ICAR in-country programmes to support a chain-linked approach to asset recovery.\n*   Continue to strengthen exchange of knowledge and practices among ICAR partner countries and beyond to promote continued innovation in asset recovery.\n*   Explore opportunities to use training programmes and case-based advice to strengthen inter-agency cooperation.\n*   Promote the dissemination of innovative legal practices from ICAR partner countries in international forums.\n\n### More info\n\nThis text appears in the Basel Institute's [Annual Report 2018](\u002Fnode\u002F959).\n\nFor a deeper discussion of the link between asset recovery and sustainable development, see the Basel Institute on Governance Working Paper 29: [Recovering assets in support of the SDGs – from soft to hard assets for development](\u002Fnode\u002F927).","2019-07-21","reflections-on-2018-international-centre-for-asset-recovery-952","Reflections on 2018: International Centre for Asset Recovery","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002Ff4b6973a-a2ac-4de6-868e-91907e02b663?width=1000&height=650&format=webp&quality=80",[],[51,52],[56],[],952,[51,68],[56],[241],1266,[],[22],[],"2022-05-26T22:56:22.000Z","2026-05-29T22:21:58.000Z",[],"\u002Fresources\u002Fnews\u002Freflections-on-2018-international-centre-for-asset-recovery-952",{"id":250,"body":251,"status":6,"type":44,"date":252,"slug":253,"title":254,"image":255,"countries":256,"topic":257,"activity":258,"tags":259,"nid":262,"topics":263,"activities":264,"authors":265,"images":267,"websites":268,"area":20,"programme":20,"language":20,"translations":269,"translation_of":20,"user_created":75,"date_created":270,"user_updated":77,"date_updated":271,"content":272,"link":273},10532,"_This article is adapted from the_ [_2024 Basel AML Index public report_](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fbasel-aml-index-2024)_._\n\nFinancial crime has far-reaching impacts on people’s lives. Yet often the only time it draws serious attention in the media is when a country is added to the [FATF’s grey list](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Fcountries\u002Fblack-and-grey-lists.html). This designation of “jurisdictions under increased monitoring” frequently sparks debate and concern, and is clouded by misconceptions. This section looks at five common myths that we come across in our work to support partner countries seeking to avoid or leave the grey list.\n\n### Myth 1: The grey list = high-risk countries\n\nA common misconception about the FATF grey list is that it represents (the only) countries and jurisdictions that pose high risks for money laundering, terrorist financing and proliferation financing.\n\nIn fact, in the FATF’s own words, the grey list is the public list of jurisdictions that are “actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.” It is the FATF’s black list that specifically identifies high-risk countries and calls for enhanced due diligence and\u002For countermeasures when dealing with these.\n\nThe distinction is important because not all grey-listed countries pose the same level or type of risk. Many are on a rapid path to improvement. Not all will require enhanced due diligence. And some countries that are not and never have been on the grey list may still present significant risks.\n\nInclusion on the grey list is based on the FATF's [International Co-operation Review Group](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Fpublications\u002FHigh-risk-and-other-monitored-jurisdictions\u002FMore-on-high-risk-and-non-cooperative-jurisdictions.html) (ICRG) process and on the criteria summarised under Myth 2, rather than merely on its own criteria for identifying a higher-risk country (see box below).\n\nA complicating factor for financial institutions seeking to identify clear criteria for applying enhanced due diligence is the use of both the black and grey lists by the EU and UK for their own lists of high-risk third countries.\n\n> What is a higher-risk country?\n> \n> The Interpretative Note to the FATF’s [Recommendation 10](https:\u002F\u002Fcfatf-gafic.org\u002Fdocuments\u002Ffatf-40r\u002F376-fatf-recommendation-10-customer-due-diligence) on customer due diligence sets out guidelines on country or geographic risk factors that might trigger the application of enhanced due diligence according to a risk-based approach. The criteria (note 15b) refer to countries that are “identified by credible sources” as having inadequate AML\u002FCFT systems, high levels of corruption and crime or high levels of terrorist activity and financing, or that are subject to sanctions or similar measures. It does not specifically refer to either the grey list or the black list, though this may be one factor that organisations take into account.\n> \n> Similarly, [Recommendation 19](https:\u002F\u002Fwww.cfatf-gafic.org\u002Fdocuments\u002Ffatf-40r\u002F385-fatf-recommendation-19-higher-risk-countries) on higher-risk countries and its Interpretative Note require enhanced due diligence by financial institutions to be applied only to countries “for which this is called for by the FATF”, indicating the black list of jurisdictions subject to a call for action.\n\n### Myth 2: Grey listing is a surprise\n\nEach time the FATF holds a plenary session, commentators appear to “bet” which countries will be added or removed. This leads some to believe that grey listing comes as a surprise – even to a country’s authorities.\n\nIn fact, grey listing is based mainly on a country’s poor performance in its mutual evaluation report, specifically in one of four criteria:\n\n*   Fifteen or more non-compliant or partially compliant ratings for technical compliance in any Recommendation.\n*   A non-compliant or partially compliant rating for three or more of the following Recommendations: R.3 (money laundering offences), R.5 (terrorist financing offences), R.6 (targeted financial sanctions related to terrorist financing), R.10 (customer due diligence), R.11 (record keeping) and R.20 (reporting of suspicious transactions).\n*   A low or moderate level of effectiveness for nine or more of the 11 Immediate Outcomes, with a minimum of 2 low ratings.\n*   A low level of effectiveness for six or more of the 11 Immediate Outcomes.\n\nThe authorities typically have a year or more to work on their specific weaknesses without being publicly listed, under the FATF’s International Co-operation process.\n\nThe FATF also prioritises countries and jurisdictions with significant financial centres. For the fifth round of evaluations, the threshold has been increased from USD 5 billion to USD 10 billion, measured in [broad money terms](https:\u002F\u002Fwww.oecd.org\u002Fen\u002Fdata\u002Findicators\u002Fbroad-money-m3.html).\n\nSo grey listing is rarely a surprise to the authorities. It is however less easy for third parties like financial institutions and foreign donors to predict whether a jurisdiction will end up on the grey list.\n\nOur [Expert Edition Plus](https:\u002F\u002Findex.baselgovernance.org\u002Fexpert-edition) now offers subscribers an assessment of the risks that a particular country will end up on the grey list. This makes it possible to better anticipate this and prepare accordingly – including, we would recommend, by using the Basel AML Index to assess the broad range of factors contributing to a higher level of money laundering risk.\n\n### Myth 3: Grey listing has only negative impacts\n\nBeing added to the FATF grey list can trigger severe economic consequences for countries, especially low-income countries dependent on foreign investment and assistance. Investors and financial institutions may reduce their business in the country. A 2021 [IMF paper](https:\u002F\u002Fpapers.ssrn.com\u002Fsol3\u002Fpapers.cfm?abstract_id=4026331) found that capital inflows decline on average by 7.6 percent of GDP following grey listing, for example.\n\nFinancial institutions may also “de-risk” completely – cutting off all business to avoid the extra compliance and risk management costs. Individuals and businesses may have challenges accessing financial services as a result, leading to lower financial inclusion. Other [unintended consequences](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fpb-12) may include an increase in the use of less regulated channels to move money.\n\nNegative economic consequences are not inevitable, however, especially for more developed economies. [Croatia’s economy and its financial sector](https:\u002F\u002Fwww.imf.org\u002Fen\u002FPublications\u002FCR\u002FIssues\u002F2024\u002F07\u002F26\u002FRepublic-of-Croatia-2024-Article-IV-Consultation-Press-Release-and-Staff-Report-552561), for example, both appear to be relatively unscathed by its placement on the grey list in 2023. S&P Global even [upgraded](https:\u002F\u002Fdisclosure.spglobal.com\u002Fratings\u002Fen\u002Fregulatory\u002Farticle\u002F-\u002Fview\u002Ftype\u002FHTML\u002Fid\u002F3250133) its long-term sovereign credit rating from BBB+ to A- in September 2023.\n\nWould it have done even better if it hadn’t been grey listed? It is hard to know – but in some cases perhaps being grey listed could even help a country’s performance in the long run, by motivating it to conduct necessary reforms quickly. For example, Iceland and Malta both managed to leave the grey list after just a year, having speedily fulfilled the requirements of their action plans.\n\nFor countries receiving development aid, grey listing can bring the benefit of increased targeted assistance to implement reforms and eventually exit the grey list. However, since authorities are typically aware of the risk of grey listing in advance (see Myth 2), it would be more effective if this assistance were provided earlier to help prevent the country from being listed in the first place.\n\n### Myth 4: The grey-listing system is inherently unfair\n\nCritics of the grey-listing system point out that it unfairly penalises low-income jurisdictions with less capacity for AML\u002FCFT but also lower significance due to their small financial centres.\n\nIt is true that low-income countries are disproportionately represented on the grey list, but this is changing. More than half of grey-listed countries at the time of writing are in [Sub-Saharan Africa](https:\u002F\u002Findex.baselgovernance.org\u002Fapi\u002Fassets\u002Ff2c74bc1-2760-4bea-a118-aaa96b9cdf09), for example. Yet the addition of European countries in 2023 and 2024 – Bulgaria, Croatia and Monaco – shows that the geography is shifting.\n\nThe following figure shows the percentage of jurisdictions in each region on the grey list as of October 2024:\n\n[](https:\u002F\u002Fbaselgovernance.org\u002Fsites\u002Fdefault\u002Ffiles\u002F2025-02\u002FGraphic%20regional%20percentage%20FATF%20grey%20list.png)\n\n[New prioritisation criteria](https:\u002F\u002Fwww.fatf-gafi.org\u002Fen\u002Fpublications\u002FFatfgeneral\u002FFATF-grey-listing-criteria.html) announced in October 2024 in effect apply a risk-based approach to grey listing. High-income countries and jurisdictions with financial centres over USD 10 billion will be prioritised. Least developed countries as defined by the UN will not be prioritised except in rare cases of high risk, in which case they will have a longer time period to work on their deficiencies before being grey listed.\n\nAs these changes take effect, we should see the grey-listing geography shift towards higher-income countries that are deeply integrated in financial markets.\n\nAnd there are some simple things that a country can do to avoid grey listing – namely, prepare well for the mutual evaluation process, which is always announced well in advance. Quite basic actions can help, like preparing an up-to-date [national risk assessment](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fquick-guide-26-national-money-laundering-and-terrorist-financing-risk-assessments) (and specific sectoral assessments where relevant), gathering statistical data and developing strategies to mitigate identified risks.\n\nThe Basel AML Index methodology does not penalise countries for being on the grey list, since the deficiencies that led to them being grey listed are already apparent in the mutual evaluation report data. In 2023, we also [updated our methodology](https:\u002F\u002Findex.baselgovernance.org\u002Fnews\u002Fbasel-aml-index-2023-reflecting-the-progress-of-grey-listed-jurisdictions-2513) to better capture improvements in the effectiveness of jurisdictions that exit the grey list, even if the FATF does not release new effectiveness data.\n\n### Myth 5: Leaving the grey list is the end of the story\n\nGrey listing is just one period in a country’s anti-money laundering journey. Being delisted is naturally a cause for celebration and hope, but it’s not the end of the story. Many jurisdictions have been grey listed more than once, including Cambodia, Nicaragua, Panama and Pakistan.\n\nFATF standards continue to evolve and to strengthen, so jurisdictions need to constantly improve in order to keep up.\n\nA prominent example highlighted in several Basel AML Index reports over the years is Recommendation 15 on virtual assets. After it was updated in 2018, almost all subsequently assessed jurisdictions [achieved lower levels of compliance](https:\u002F\u002Findex.baselgovernance.org\u002Fnews\u002Fvirtual-currencies-are-we-missing-a-trick-insights-from-the-basel-aml-index-2023-2541) than previously. We can expect a similar effect with the [updated Recommendations 4 and 38](https:\u002F\u002Fbaselgovernance.org\u002Fblog\u002Ffatf-seeks-change-landscape-international-asset-recovery-what-means-latin-america) on asset recovery, where there are still some countries that do not meet basic criteria such as having a non-conviction based forfeiture law or enforcing international judgements based on these laws.\n\nThe FATF’s fifth round of evaluations will [emphasise effectiveness](https:\u002F\u002Fwww.fatf-gafi.org\u002Fcontent\u002Ffatf-gafi\u002Fen\u002Fpublications\u002FMutualevaluations\u002FFatf-methodology.html) over technical compliance. Countries will need to put in more effort to improve their effectiveness ratings, which are, on average, less than half as strong as their ratings for technical compliance.\n\nAs financial systems continue to evolve, criminals will find ever more ingenious ways to steal, launder and hide money or to use it for illicit purposes such as the financing of terrorism and weapons of mass destruction. Avoiding or graduating from the grey list is one step along a never-ending journey to a resilient system that successfully wards of money laundering and related threats while not limiting financial inclusion and innovation.\n\n### Learn more\n\n*   Read the [13th annual Public Edition report of the Basel AML Index](https:\u002F\u002Fbaselgovernance.org\u002Fpublications\u002Fbasel-aml-index-2024).\n*   Explore the [Basel AML Index](https:\u002F\u002Findex.baselgovernance.org\u002F).","2025-02-06","fatf-grey-list-truth-and-myths-2760","FATF grey list: truth and myths","https:\u002F\u002Fjam.baselgovernance.org\u002Fapi\u002Fassets\u002F2397c564-394a-4f1e-8448-ec230a14810c?width=1000&height=650&format=webp&quality=80",[],[51,52],[57],[260],{"tags_id":261},{"id":64,"name":65},2760,[51,68],[57],[266],1090,[],[22],[],"2025-02-06T11:01:49.000Z","2026-05-29T22:22:34.000Z",[],"\u002Fresources\u002Fnews\u002Ffatf-grey-list-truth-and-myths-2760",{"left":275,"top":275,"width":276,"height":276,"rotate":275,"vFlip":277,"hFlip":277,"body":278},0,20,false,"\u003Cpath fill=\"currentColor\" fill-rule=\"evenodd\" d=\"M17 10a.75.75 0 0 1-.75.75H5.612l4.158 3.96a.75.75 0 1 1-1.04 1.08l-5.5-5.25a.75.75 0 0 1 0-1.08l5.5-5.25a.75.75 0 1 1 1.04 1.08L5.612 9.25H16.25A.75.75 0 0 1 17 10\" clip-rule=\"evenodd\"\u002F>",1780676485278]