Pakistan has jumped up the Basel AML Index, the Basel Institute’s independent, data-based index of the risk of money laundering and terrorist financing (ML/TF) around the world. The country’s risk score rose from 6.45 to 7.66 out of 10, where 10 equals the highest assessed risk of ML/TF.
Basel Institute senior advisor and former board member Hans-Peter Bauer presented at the Baltic AML Forum on 2 October on the topic of Country Risk Assessment - A Difficult Task.
The Forum was opened by the Lithuanian Minister of Finance and attended by 150 participants, who were mainly compliance officers and tech experts from Baltic-region banks, FinTech companies and cryptocurrency ventures.
In 2019, Estonia achieved the lowest risk score out of the 125 countries in the Public Edition of the Basel AML Index, 2.68 out of 10. In fact, Estonia has consistently been among the top performers since 2012, when the Basel AML index was first calculated.
Money laundering risks in Malta have been in the headlines recently.
During 2018 and 2019, the world has faced serious money laundering scandals involving reputable institutions. Surprisingly, abuses of financial systems were uncovered in countries that have low risk scores in the Basel AML Index, like Estonia and Sweden.
Falling rankings in the Basel AML Index, released today, show how many countries’ AML systems are a weak defence against today’s money laundering risks.
Ineffective anti-money laundering and counter financing of terrorism (AML/CFT) systems and lack of transparency are leaving the door open to increasingly sophisticated money laundering schemes.
In 2019, the world saw a significant number of money laundering scandals related to “Russian money” entering the financial markets of European countries, revealed through investigations by the OCCRP and other investigative media outlets.
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Tools to support enhanced due diligence in response to new EU list of high-risk third countries
The European Commission has released a new list of 23 “high-risk third countries” with weak anti-money laundering and counter-terrorist financing (AML/CFT) frameworks.
This means that banks and other entities subject to the EU’s AML rules will have to apply increased due diligence in relation to customers and financial institutions from these countries.
Singapore demonstrates a strong anti-money laundering and counter financing of terrorism (AML/CFT) legislative framework but despite this, it shows significant weaknesses in its effective implementation, according to a recent review by the Financial Action Task Force.
The Basel Institute is now offering a highly detailed and comparative analysis of the FATF Mutual Evaluation Reports as an additional service to the Expert Edition of the Basel AML Index. It provides individual scoring of the FATF 40 Recommendations and Effectiveness measures to support or customise your in-house country risk assessment.