Corruption trackers flag increased global money laundering risks
The Basel Institute on Governance said the global risk score
increased from 5.22 to 5.3 out of 10 (highest risk score) in its Anti-Money
Laundering Index.
In 2021, Switzerland scored 4.89 in the independent annual
ranking that examines the risk of money laundering in 110 jurisdictions. That
marks an increase relative to 2020 when it scored 4.74. It now ranks 43rd
Even countries that made progress, the report observed, only
made minimal, marginal gains.
The 10th edition of the Basel AML Index report stresses that
a stronger response is needed to the threats arising from virtual assets
(cryptocurrencies) and greater emphasis on prevention of money laundering and
terrorism finance (not just enforcement).
“The use of virtual assets such as cryptocurrencies is
exploding – for legitimate as well as illicit purposes,” notes the report.
Multiple challenges
The snapshot on global efforts to tackle money laundering
and terrorism finance finds “ineffective systems are the general rule” and
countries consistently do worse on prevention than enforcement.
The risk score is based on public data collated from 17
public sources including the Financial Action Task Force, Transparency
International, the World Bank and the World Economic Forum.
It assesses country-specific legal frameworks on money
laundering and terrorism financing, bribery and corruption risks, financial
transparency, opportunities for public accountability, as well as legal and
political risk factors.
The report highlights ineffective implementation of
beneficial ownership transparency registers around the world. This refers to
the public disclosure of the ultimate owners of an entity – i.e. an individual
or individuals who controls a web of companies, foundations trusts and other
entities.
Other areas of concern include the weak application of
preventive measures outside the financial sector (for example, business sectors
such as real estate) and the role of intermediaries, including lawyers and
accountants, who can be exploited by criminal actors.
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