The Basel AML Index is an independent ranking that assesses countries’ money laundering and terrorist financing (hereinafter: “ML/TF”) risks and capacity to counter them. It draws on 18 indicators in five domains measuring different factors that contribute to high ML/TF risks. The 12th public edition of the Basel AML Index has been published recently and concludes that action on money laundering is more urgent than ever.

According to the new published index, the average global ML/TF risk level increased from 5.25 in 2022 to 5.31 in 2023, where 10 is the maximum risk. Four of the five domains assessed by the Basel AML Index witnessed an upsurge in risks, mirroring the previous year. These domains include corruption and bribery, financial transparency and standards, public transparency and accountability, and political/legal risks. Anti-money laundering and counter-financing of terrorism (AML/CFT) framework quality ratings remained unchanged.

Furthermore, the authors of the new index are concerned about the drop in the effectiveness of AML/CFT systems, as their analysis of Financial Action Task Force (FATF) data shows. They conclude that globally, it is exceedingly difficult to bring into operation AML/CFT systems that are as effective in practise as they claim to be, which is to prevent the misuse of the worldwide financial system to finance terrorism and funnel funds from organised crime and corruption.