Published by the Basel Institute on Governance since 2012, the Basel AML Index is an independent annual ranking that assesses the risk of money laundering and terrorist financing around the world. It measures the risk using data from publicly available sources such as the Financial Action Task Force (FATF), Transparency International, the World Bank and the World Economic Forum.
A total of 15 indicators of countries’ adherence to anti-money laundering and countering the financing of terrorism regulations, levels of corruption, financial standards, political disclosure and the rule of law are aggregated into one overall risk score. By combining these data sources, the overall risk score represents a holistic assessment addressing structural as well as functional elements of the country’s resilience.
The scores are aggregated as a composite index using a qualitative and expert-based assessment in order to form the final country ranking. They should be read in conjunction with the analysis and descriptions of the methodology and indicators in the rest of the report. Without this background, the results may easily be misunderstood or misrepresented, and this may have unwanted consequences for any policy or compliance decision that is taken as a result.
The Basel AML Index does not measure the actual amount of money laundering or terrorist financing activity, but rather is designed to assess the risk of such activity. The risk is understood as a broad risk area in relation to a country’s vulnerability to money laundering and terrorist financing and its capacities to counter it.
The Basel AML Index ranks countries based on their overall scores, capturing the complex global nature of risks and providing useful data for comparative purposes. However, the primary objective is not to rank countries superficially in comparison with each other, but to provide an overall picture of different countries’ risk levels and serve as a solid basis for examining progress over time.
More countries showed slight improvements in their risk scores in 2019 than last year, but there have been no substantial changes indicating significant progress in tackling money laundering and terrorist financing. This confirms the general trend visible over the eight years since the Basel AML Index was first calculated: most countries are slow to improve their resilience against these risks. Improvements are minor – between 2018 and 2019, 27% of countries listed in the Public Edition (34/125) improved their scores by more than 0.1 point.
60% of countries in the 2019 Public Edition ranking (74/125) have a risk score of 5.0 or above and can be loosely classified as having a significant risk. This compares with 64% in 2018. The mean average level of risk, though marginally better than 2018, remains above this (5.39 in 2019 compared to 5.63 in 2018).
Most countries of South East Europe fall into the category of countries with low risk. North Macedonia holds high 3rd place with risk of only 3,22, followed by 5th Bulgaria with 3,51, 6th Slovenia, 7th Croatia and 10th Montenegro with 3,7, 3,82 and 3,94. Greece with 4,56 and Romania with 4,76 experience moderate risk, while the countries with significant risk of money laundering and terrorist financing include Bosnia Herzegovina with 4,76, Albania with 6, Turkey with 6,19 and Serbia with 6,33 which is the highest risk of all countries of Europe and Central Asia!