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Advancing trust and standards between banks and virtual asset service providers – lessons from Wolfsberg Group events at the 9th Global Conference
By J. Edward Ned Conway, Executive Secretary, The Wolfsberg Group As virtual assets move into the mainstream of traditional finance, tricky questions arise. What does a reasonable, risk-based control framework look like for banks that provide services to virtual asset service providers VASPs ? And how can compliance teams strengthen private-to-private information sharing to better detect suspicious activity? These were some of the questions tackled by the Wolfsberg Group at the 9th Global Conference on Criminal Finances and Cryptoassets, organised by the Basel Institute on Governance, Europol and UNODC and held in Vienna on 28–29 October 2025. The Wolfsberg Group is an association of 12 global banks that develops frameworks and guidance for the management of financial crime risks. Housed at the Basel Institute on Governance, this long-standing initiative brings together senior financial crime compliance leaders through various working groups, including one dedicated to virtual assets. This flagship event provided a valuable platform for the Group to explain its Stablecoin Guidance, gauge interest in a specific Due Diligence Questionnaire focused on VASPs, and further advance efforts to break down silos in private-to-private information sharing. This blog summarises some of the key discussions – dialogues that are continuing in dedicated meetings and consultations of the Wolfsberg Group with members, regulators and institutional partners. Regulatory clarity as a catalyst for TradFi–VASP relationships? Day 1 of the conference saw Ned Conway, Executive Secretary of the Wolfsberg Group, moderate a high-level panel discussion featuring representatives from Circle, Bullish and Société Générale on the theme “Bridging the TradFi–DeFi Gap.” The panel discussed the barriers to relationship building between traditional finance TradFi institutions such as banks and VASPs such as cryptocurrency exchanges and stablecoin issuers. The speakers noted that a lack of trust and understanding persists, particularly around risks specific to virtual assets. That is one reason that TradFi is slow to onboard VASPs as clients and provide them with the banking services they need in order to operate. However, stablecoins are helping bridge this gap by bringing parts of the crypto universe under regulatory frameworks. TradFi institutions underlined that they would benefit from clearer scenarios from regulators on where collaboration and information sharing would be permissible between regulated entities and VASPs. Recent guidance issued by regulators on stablecoins and virtual assets in Asia, in particular, could help improve confidence both ways in the TradFi-VASP relationship. Aligning risk appetite, due diligence and monitoring for suspicious activity On Day 2, a dedicated Wolfsberg side event brought together VASPs, FinTech firms and traditional banks for in-depth discussions. Representatives from several Wolfsberg member banks – Deutsche Bank, Citi, UBS, Société Générale, and Bank of America – joined the sessions. The agenda focused on frameworks for information sharing, but the discussions touched upon a range of hot topics including: risk appetite and the risk-based approach; payment transparency i.e. the travel rule ; and approaches to monitoring for suspicious activity. During the discussions, participants highlighted that one of the main barriers to effective collaboration between traditional financial institutions and VASPs is a lack of mutual trust. Both sectors face difficulties in interacting with each other. The Wolfsberg Correspondent Banking Due Diligence Questionnaire CBDDQ is useful for setting standards, but onboarding challenges could be overcome by framing risk in common language. Many viewed the current onboarding approaches as fragmented, and expressed strong support for the Wolfsberg Group to develop standardised guidance and a due diligence questionnaire for VASPs. Questions remain about what is “reasonable” and “risk-based” for VASPs, especially for smaller institutions, and whether banks should monitor blockchain transactions themselves. VASPs need to be able to articulate their risk appetite, and how this changes as they continue to develop innovative products and services. VASP participants viewed the Wolfsberg Group’s Stablecoin Guidance as applicable beyond stablecoin issuers to the wider VASP ecosystem. This is particularly true for the tailored questions on the underlying control environment, and the linking of risk appetite directly to monitoring approaches. Improving private-private information sharing on suspicious activity Discussion on information sharing between TradFi and VASPs highlighted that this can rely heavily on personal relationships across entities, limiting scalability. VASPs showed concern around sharing wallet addresses under private-to-private information sharing frameworks, given geopolitical trends and concerns around the EU’s General Data Protection Regulation GDPR . However, consensus emerged that better data sharing both increases the quality of suspicious activity reports SARs and reduces SAR volumes. Particularly on this latter point, activities often thought to be suspicious in a silo are better understood when viewed from multiple perspectives, confirming the importance of information exchange. Continuing to build bridges as the financial system evolves Bridging the gap between TradFi and DeFi remains a central theme in the Wolfsberg Group’s strategy. The Vienna events offered a unique opportunity to engage key stakeholders across the sector and advance this important dialogue. The side event was opened by Elizabeth Andersen, Executive Director of the Basel Institute on Governance. The Wolfsberg Group extends its sincere thanks to the Basel Institute for the opportunity to co-host this side event and to participate in the 9th Global Conference on Criminal Finances and Cryptoassets. Learn more Learn more about the Wolfsberg Group and explores its guidance and resources on managing financial crime risk, including its Stablecoin Guidance. Learn more about the 9th Global Conference and see selected recordings. Find out about the 10th Global Conference on Criminal Finances and Cryptoassets on 15–16 September 2026 in Luxembourg.
Anti-money laundering: what is success?
This article is adapted from the 2024 Basel AML Index public report . Private 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 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. This is a disaster for countries deprived of desperately needed funds for development, while also negatively impacting on economies, security and the health of our planet. It 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. 1 Are we making progress in terms of international standards? A very basic question is whether countries and regions are at least in line with minimum international standards for AML set by the FATF. While it is important to question FATF data and standards, and to identify abuses and unintended consequences, ultimately they are the foundation of a harmonised global framework aimed at reducing opportunities for criminals to hide and launder illicit funds. Technical compliance: fewer black holes on the map First, 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. To 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. The 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: Recommendation Average technical compliance R.7: Targeted financial sanctions – proliferation of weapons of mass destruction 57% up from 31% R.19: Higher-risk countries 74% up from 51% R.12: Politically exposed persons 73% up from 51% R.16: Wire transfers 71% up from 50% R.22: DNFBPs – Customer due diligence 59% up from 40% R.6: Targeted financial sanctions – terrorism and terrorist financing 62% up from 43% It 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. The 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. While 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. In early 2024, the FATF conducted public consultations 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. Regional picture: closing the gap In 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. 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. The 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. Progress between mutual evaluation report and latest follow-up report Countries and jurisdictions progress in percentage points 40–52 percentage points Mauritius\ 52 , Botswana\ 50 , Vanuatu\ 49 , Mauritania 48 , Uganda\ 40 25–39 percentage points Pakistan\ 33 , Iceland\ 33 , Saint Lucia 29 , Bahamas\ 28 , Sri Lanka\ 27 , Zimbabwe\ 26 20–25 percentage points Mongolia\ 24 , Kenya\ 24 , Norway 24 , Costa Rica 23 , Morocco\ 23 , Fiji 22 , Jamaica\ 22 , Bhutan 21 , Trinidad and Tobago\ 21 , Tunisia\ 20 These leaps in performance are not the norm, however: more than half of the assessed countries made progress of less than 10 percentage points. Effectiveness is falling More 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. We 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. Average 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. What’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: Immediate Outcome paraphrased Average effectiveness IO7: Money laundering investigations, prosecutions and effective, proportionate and dissuasive sanctions 20% down from 21% in 2021 IO5: Legal persons and arrangements prevented from misuse for money laundering and terrorist financing ML/TF ; beneficial ownership information available to competent authorities 21% down from 22% IO4: Financial institutions and DNFBPs apply AML/CFT preventive measures commensurate with their risks and report suspicious transactions 22% down from 24% IO11: Prevention of financing of proliferation of weapons of mass destruction 22% down from 24% IO3: Appropriate supervision according to a risk-based approach 23% down from 26% IO10: Prevention of terrorist financing / abuse of non-profit sector 24% down from 27% Even in the IOs with the highest average performance globally across all jurisdictions assessed with MERs, we see decreasing effectiveness as more countries are assessed: Immediate Outcome paraphrased Average effectiveness IO2: International cooperation on information, financial intelligence and evidence against criminals and assets 44% down from 49% in 2021 IO1: Risks understood and domestic coordination to combat ML/TF and proliferation financing 36% down from 38% IO6: Financial intelligence and other information used investigations 34% down from 37% IO9: Terrorist financing investigations, prosecutions and effective, proportionate and dissuasive sanctions 33% down from 37% IO8: Proceeds and instrumentalities of crime confiscated 27% down from 29% IO8 on proceeds and instrumentalities of crime confiscated dropped despite hopes for a rise, as asset recovery was an FATF priority in 2022–2023. The big picture? Overall, countries’ AML frameworks are gradually becoming more technical compliant with the global standards but less effective in practice. Effectiveness along the asset recovery chain Data 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. Applying 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”: 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. 2 What other data and metrics can we use to better measure success in practice? FATF 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. Yet 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. This 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. Many 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. The following figure offers some illustrative examples. See the methodology 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. 3 Clearer goals, better evidence It 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. Measuring 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. Achieving 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 Crucially, 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. Learn more Read the 13th annual Public Edition report of the Basel AML Index. Explore the Basel AML Index.
FATF grey list: truth and myths
This article is adapted from the 2024 Basel AML Index public report . Financial 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. 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. Myth 1: The grey list = high-risk countries A 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. In 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/or countermeasures when dealing with these. The 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. Inclusion on the grey list is based on the FATF's International Co-operation Review Group 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 . A 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. What is a higher-risk country? The Interpretative Note to the FATF’s Recommendation 10 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/CFT 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. Similarly, Recommendation 19 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. Myth 2: Grey listing is a surprise Each 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. In fact, grey listing is based mainly on a country’s poor performance in its mutual evaluation report, specifically in one of four criteria: Fifteen or more non-compliant or partially compliant ratings for technical compliance in any Recommendation. 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 . A low or moderate level of effectiveness for nine or more of the 11 Immediate Outcomes, with a minimum of 2 low ratings. A low level of effectiveness for six or more of the 11 Immediate Outcomes. The 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. The 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. So 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. Our Expert Edition Plus 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. Myth 3: Grey listing has only negative impacts Being 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 found that capital inflows decline on average by 7.6 percent of GDP following grey listing, for example. Financial 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 may include an increase in the use of less regulated channels to move money. Negative economic consequences are not inevitable, however, especially for more developed economies. Croatia’s economy and its financial sector, for example, both appear to be relatively unscathed by its placement on the grey list in 2023. S&P Global even upgraded its long-term sovereign credit rating from BBB+ to A- in September 2023. Would 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. For 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. Myth 4: The grey-listing system is inherently unfair Critics of the grey-listing system point out that it unfairly penalises low-income jurisdictions with less capacity for AML/CFT but also lower significance due to their small financial centres. It 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, for example. Yet the addition of European countries in 2023 and 2024 – Bulgaria, Croatia and Monaco – shows that the geography is shifting. The following figure shows the percentage of jurisdictions in each region on the grey list as of October 2024: New prioritisation criteria 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. As these changes take effect, we should see the grey-listing geography shift towards higher-income countries that are deeply integrated in financial markets. And 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 and specific sectoral assessments where relevant , gathering statistical data and developing strategies to mitigate identified risks. The 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 to better capture improvements in the effectiveness of jurisdictions that exit the grey list, even if the FATF does not release new effectiveness data. Myth 5: Leaving the grey list is the end of the story Grey 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. FATF standards continue to evolve and to strengthen, so jurisdictions need to constantly improve in order to keep up. A 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 than previously. We can expect a similar effect with the updated Recommendations 4 and 38 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. The FATF’s fifth round of evaluations will emphasise effectiveness 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. As 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. Learn more Read the 13th annual Public Edition report of the Basel AML Index. Explore the Basel AML Index.
Money dirtying: shining a light on how clean money turns into bribes
There’s a lot of attention to the laundering of “dirty money” – but very little about how clean money can be turned into bribes, kickbacks or payments to terrorists. Together with David Jancsics, I examined the money-dirtying strategies at the heart of one of the world’s most dramatic corruption scandals: the Lava Jato or Car Wash case. How did the multinational company Odebrecht manage to secretly channel millions in legitimately earned funds to bribe politicians and bureaucrats across the continent? Our article Turning Legally Obtained Resources into Illegal Payments: A Money Dirtying Scheme attempts to answer this question and to explore the networks of individuals and entities that made the schemes possible. Exploring the concept and practice of money dirtying could help practitioners get a more holistic view of major financial crime cases. It could also potentially lead to new ways to prevent, detect and intercept illicit financial flows. What is “money dirtying”? We use the term “money dirtying” to refer to the process by which clean, legitimate resources are turned into illicit payments used for corruption, the financing of terrorism and other illegal activities. The term was originally coined to describe the mechanisms of terrorism financing in the late 1990s and early 2000s. Following the terrorist attacks of 9/11, researchers worked to understand the financial structures that allowed Al-Qaeda to finance the attacks. We have repurposed the term to fit the field of corruption, but the underlying idea is the same. What are the typical characteristics? On the face of it, money dirtying has similar characteristics to money laundering: Complex, multi-layered schemes using redundant payments and fake contracts to make funds difficult to trace. The use of specialised professionals who can create sophisticated financial infrastructures and know all the tricks to evade detection. The use of informal actors such as halawadars or doleiros to escape regulatory radars. Often transnational, with money, resources and information shared along a cross-border network of individuals and entities. What makes it different to money laundering? The key differences lie in the purpose and the direction of the flow. Money laundering seeks to clean dirty money by reintegrating it into the legal financial system. It is a circular system, where the funds return to their point of origin. Money dirtying serves to transfer money undetected from the bribe giver to the bribe taker. It is linear. For example, in our case study, the money took the following route: In reality, it looked more like this: The Lava Jato case The Lava Jato case Operation Car Wash was a major judicial investigation launched in Brazil in 2009. Initially focused on money laundering and illegal activities linked to a car wash company, it quickly expanded into one of the largest corruption investigations in history. By the early 2010s, investigations and plea deals had exposed the intricate financial structures and corrupt management systems of the Odebrecht Group at the heart of a web of illicit payments in countries across the region. Unlike other cases, there is significant public information available about Lava Jato thanks to judicial investigations, journalistic work, academic studies and other reports. This allowed us to map and analyse the “money dirtying” network in detail. The case is also an ideal case study in advanced corruption schemes. It was large, long-running and used complex, multi-layered networks that spread across the world. Skeleton and muscles To map the complex networks of the Odebrecht Group’s money dirtying networks we looked at the data in two ways: We analysed the transactions, performing a social network analysis and looking at the “skeleton” of the network – how it was shaped, where transactions centred and how they moved. At the same time, we tried to understand the substance of the network. If you like, the muscles surrounding the skeleton. We read interviews and wiretaps, and looked at personal histories to understand the relationships between people in the network and how they operated together. We then created a coherent framework of both the “skeleton” and “muscles”. This includes a description of each role and its function within the network. So what? Paying more attention to how legitimate funds are channelled towards illegal activities can help anti-corruption practitioners to gain a more holistic view of major corruption schemes. With the increase in internal controls and regulatory scrutiny, those that engage in corruption are forced to use more sophisticated methods than just declaring bribes as “consultancy fees”, for example. A better understanding of these methods could help inform stronger internal controls and compliance systems. This focus also helps practitioners to see how some of the same methods – legal structures in offshore financial centres, shell companies, professional enablers, informal value transfer service providers for example – can be misused not only for money laundering but for other parts of a corruption scheme. The research also showcases the power of social network analysis in mapping the key individuals and entities involved in transforming clean money into illicit payments. Combined with evidence of their relations and interactions, this can create a valuable source of information for both law enforcement and the development of evidence-based strategies for targeting corrupt networks. Learn more Organisational forms of corruption networks: the Odebrecht-Toledo case Quick Guide 4: Social network analysis in combating organised crime and trafficking Research Case Study 3: Exposing the networks behind transnational corruption and money laundering schemes
The Crown Resorts anti-money laundering fine: a wake-up call for the gambling industry
A blog by Zisheng Xing, a law student at the Arizona State University who is undertaking a legal research internship at the Basel Institute on Governance. A monumental anti-money laundering fine recently dropped in Australia, sending shockwaves throughout the gambling industry – a sector well-known for flying under the radar of anti-money laundering and counter financing of terrorism AML/CFT regulations. On 11 July 2023, the Federal Court of Australia ordered the Australian gambling giant Crown Resorts “Crown” to pay an AUD 450 million USD 300 million fine for repeatedly violating the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 “AML/CFT Act” between 2015–2022. The fine resulted from an agreement between Crown and Australia’s financial intelligence unit, AUSTRAC. This significant penalty is one of the largest in the gambling industry and serves as a severe reminder to casinos to implement and maintain effective AML/CFT systems. How did Crown breach Australia’s AML/CFT Act? The Australian Federal Court found that Crown’s Melbourne and Perth casinos: failed to implement transaction monitoring programmes that were “appropriate to the nature, size and complexity of their business”; lacked “appropriate procedures to ensure higher risk customers were subjected to extra scrutiny” in their “enhanced customer due diligence” programmes; failed to conduct “appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks”; failed to maintain effective “risk-based systems and controls in their AML/CFT programs”; failed to appropriately identify, timely assess and respond to ML/TF risks they faced; and failed to establish appropriate frameworks for management oversight. When assessing the propriety of the penalty, the Federal Court concluded that Crown’s violations were “systemic, longstanding and egregious” and that they permeated “every designated service” that the enterprise provided its customers. Risks posed by junkets A key finding of proceedings was that Crown had shown “a fundamental lack of regard” for the risk posed by junket operators. Junket operators are third parties who enter into agreements with casinos to facilitate gambling for high rollers. Junket operations often involve heightened AML risk, on the basis that they enable transfers of large amounts of money between jurisdictions. These transfers are administered in such a way that the source and ownership of funds involved can be easily obscured. Many of Crown’s contraventions were based on their relationship with such operations – even when the risks they presented were obvious. For example, AUSTRAC stated that Crown continued a “business relationship with a major casino junket operator” while “aware of allegations the operator was connected to organised crime." Additionally, AUSTRAC noted at least 75 “suspicious incidents” involving approximately AUD 23 million in cash found in a private gaming room to which Crown Melbourne had given a junket operator exclusive access. Why is this decision significant for AML/CFT? As outlined by AUSTRAC, “the casino industry by its very nature, faces serious risks of exploitation by criminals seeking to launder the profits of their illicit enterprises.” Consequently, it is crucial that enterprises involved in this industry strictly implement and maintain strong AML measures and comply with relevant state laws. The penalty imposed on Crown is a clear warning to the entire gambling industry that its AML/CFT compliance systems must be strong enough to meet obligations and “protect the… community and their businesses from serious financial crime.” The decision also shows the importance of significant civil or administrative sanctions to enforcing compliance. As highlighted in our quick guide to money laundering through the gambling industry, proportionate penalties such as these both deter future breaches and encourage casinos to invest in robust AML/CFT programmes. Learn more View our quick guide to money laundering through the gambling industry by Isys Lam and Andrew Dornbierer. For more on money laundering risk assessment more generally, see the Basel AML Index – the Basel Institute’s flagship index of money laundering and terrorist financing risks around the world.
Publications
Case Study 13: The Beauty Queen case: non-conviction based forfeiture across borders
This Case Study analyses how Colombian authorities recovered assets linked to drug trafficking and held in a trust in Guernsey. It sets out the legal tools and procedures in Colombia and in Guernsey that enabled Colombia’s first international recovery under its non-conviction based forfeiture model Extinción de dominio. The Case Study highlights lessons for international cooperation between jurisdictions with different forfeiture systems or even legal traditions.
The International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance provided technical assistance as part of a Memorandum of Understanding with the General Prosecutor’s Office of Colombia.
On 30 November 2023, the Fourth Court of the Specialised Extinción de Dominio Circuit of Colombia ordered the non-conviction based forfeiture of a Guernsey trust account issued by Northern Trust Fiduciary Services (Guernsey) Limited. The beneficiary was María Marcela Serrano Camacho, a Colombian model and former beauty queen.
The Colombian forfeiture order extinguished property rights over the account – amounting to GBP 361,146 – on the grounds that the funds were the proceeds of drug trafficking offences committed by Efraín Antonio Hernández Ramírez (“Don Efra”), a well-known Colombian drug trafficker, and his former spouse María Serrano in the 1990s.
On 30 January 2025, following successful mutual legal assistance proceedings between Colombia and the Bailiwick of Guernsey, the two jurisdictions concluded an asset sharing agreement for the repatriation of the confiscated assets.
This marked Colombia’s first successful international recovery through non-conviction based forfeiture.
This Case Study examines how early and effective coordination between Colombia and Guernsey enabled the identification, freezing, forfeiture and repatriation of the assets. It analyses the legal framework underpinning Colombia’s Extinción de dominio regime and how it was applied, leading to the forfeiture of the Guernsey acccount. It also describes the procedural mechanisms used in Guernsey to execute foreign non-conviction based forfeiture orders.
The interaction between the authorities in both jurisdictions offers valuable lessons and examples of good practices.
Main takeaways of the case:
- Early and trust-based international cooperation is decisive
- Non-conviction based forfeiture is indispensable when criminal routes are closed
- Identifying beneficial ownership is central to effective asset recovery
- Direct enforcement of foreign forfeiture orders increases efficiency and legal certainty
- Asset sharing agreements strengthen cooperation incentives
The Case Study can be read alongside Policy Brief 16: “Enforcing foreign non-conviction based forfeiture orders: FATF standards and asset recovery practice in Latin America and financial centres”.
About this Case Study
This publication is part of the Basel Institute on Governance Case Study series, ISSN 2813-3900. It is licensed for sharing under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BYNC-ND 4.0).
The Case Study series offers practitioners insights into interesting and precedent-setting cases involving corruption and asset recovery.
This is a publication of the International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
Disclaimer: This Case Study is intended for general informational purposes and does not constitute and/or substitute legal or other professional advice. The contents are the sole responsibility of the authors and do not necessarily reflect the views or the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
Policy Brief 16: Enforcing foreign non-conviction based forfeiture orders
This Policy Brief analyses emerging international standards aimed at addressing recurring challenges in judicial practice with regard to the enforcement of non-conviction based forfeiture orders issued by foreign states. It focuses in particular on the historical absence of a binding obligation on requested states to cooperate in such cases and, where cooperation is available, on the structural tension between direct and indirect enforcement models.
Revisions in 2023 to the Financial Action Task Force (FATF) Recommendations 4 and 38 seek to clarify and strengthen states’ cooperation in the enforcement of foreign forfeiture orders. In this context, the recognition and execution of foreign non-conviction based forfeiture orders are central components of the evolving international asset recovery framework.
Through analysis and case studies involving Latin American states and international financial centres, this Policy Brief demonstrates that the choice of procedural model for enforcing foreign forfeiture orders – direct or indirect – has significant implications, while acknowledging the competing legal and institutional interests involved.
In line with FATF Recommendation 38, the Policy Brief argues in favour of direct enforcement in the requested state, based on the facts established by the foreign authority. This promotes efficiency, legal certainty and mutual trust. Indirect enforcement models that may require domestic investigations by the requested state, on the other hand, often lead to delays, duplication and increased costs, which hinders international asset recovery efforts.
The analysis provides empirical insight into how the revised FATF standards address practical deficiencies and the implications for judicial practice in requested states. For the Latin American context, the Policy Brief suggests to go beyond technical compliance of domestic non-conviction based forfeiture regimes with the FATF standards to strengthen the effectiveness of cross-border enforcement in practice.
This Policy Brief can be read alongside Case Study 13: “The Beauty Queen case: non-conviction based forfeiture across borders. Lessons learned from Colombia–Guernsey cooperation.”
About this Policy Brief
This publication is part of the Basel Institute on Governance Policy Brief series ISSN 2624-9669. You may freely share or republish it under a Creative Commons BY-NC-ND 4.0 licence.
It is a publication of the International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
Disclaimer: This Policy Brief is intended for general informational purposes and does not constitute and/or substitute legal or other professional advice. The contents are the sole responsibility of the author and do not necessarily reflect the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
Suggested citation: Solórzano, Oscar. 2026. “Enforcing foreign non-conviction based forfeiture orders: FATF standards and asset recovery practice in Latin America and financial centres.” Policy Brief 16, Basel Institute on Governance. Available at: baselgovernance.org/publications/pb-16.
Addressing conflicts of interest and corruption in Indonesia’s energy transition
This U4 Issue analyses Indonesia’s ambitious energy transition and highlights how political finance, weak regulations and a “revolving door” of personnel between public office and the private sector create vulnerabilities. The publication was produced by U4 and the Basel Institute on Governance through its Green Corruption programme.
About the paper
Conflicts of interest and corruption in Indonesia’s political economy pose significant risks to its energy transition, including the Just Energy Transition Partnership. Existing legal and institutional frameworks are fragmented, inconsistently applied, and often fail to address the risk of state capture by powerful political and economic actors, especially in the extractive and energy sectors.
The reliance on fossil fuel industries for political financing and the monopolistic nature of state-owned entities further complicate the shift to a low- or no-carbon system, despite the country’s ambitious renewable energy targets.
Potential pathways to greater anti-corruption resilience lie in improvements to beneficial ownership transparency and strengthening regulation, monitoring and sanctioning of conflict of interest violations.
Case Study 12: Indonesia: a landmark money laundering conviction in a forestry crime case
This Case Study highlights how investigators of Indonesia’s Ministry of Environment and Forestry achieved their first conviction for money laundering linked to forestry offences, leveraging institutional and legal changes in financial investigation procedures.
About this Case Study
This publication is part of the Basel Institute on Governance Case Study series, ISSN 2813-3900. It is licensed for sharing under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).
The development of this publication was funded through the Illegal Wildlife Trade (IWT) Challenge Fund.
The contents are the sole responsibility of the author and do not necessarily reflect the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
Back in Action: How the UK is reviving unexplained wealth orders (The Academy Bulletin)
In an article published in the Fall 2025 issue of the Bulletin of the International Academy of Financial Crime Litigators, Andrew Dornbierer explores the revival of unexplained wealth orders (UWOs) in the United Kingdom.
Introduced in 2017 as a tool to combat the abuse of UK’s markets to launder criminal proceeds, the UWO mechanism suffered a severe setback in 2020. After only a handful of attempts to use it, a decision by the High Court effectively left it sprawled on the canvas.
In the last year or so, however, the mechanism has slowly started to prove itself. Most recently, the UK’s Serious Fraud Office – in its first use of the UK’s UWO mechanism – secured GBP 1.1 million from the sale of a property belonging to the ex-wife of a convicted fraudster.
This article offers a short history of UWOs in the UK. It examines how, after a turbulent start and subsequent amendments to the mechanism, UWOs are now back to being used by UK authorities to tackle illicit financial flows. If applied responsibly, proportionately and in harmony with established legal rights, unexplained wealth orders promise to be a powerful tool in the UK’s fight to recover criminal assets.
This is the fifth issue of The Academy’s Bulletin. It has been established to transmit the work of Academy Fellows, draw attention to matters of importance to the legal community and provide high-level analysis of cutting-edge issues in global financial crime investigations and litigation. The Basel Institute on Governance acts as Secretariat to the Academy.