Cyprus among top ten de­clin­ers in fight­ing money laun­der­ing

Financial Mirror (Cyprus) - - CYPRUS -

Cyprus was among the top 10 de­clin­ers glob­ally in com­bat­ing money laun­der­ing and ter­ror­ism fi­nanc­ing risks (ML/TF), ac­cord­ing to the Basel Anti-Money Laun­der­ing (AML) In­dex.

The Basel AML In­dex is an in­de­pen­dent an­nual rank­ing that as­sesses the risk of money laun­der­ing and ter­ror­ist fi­nanc­ing around the world.

Cyprus’ risk-rat­ing score wors­ened by 0.75 points to 5.01 com­pared to 2017 putting it 80 among 129 coun­tries – Fin­land (2.73) was the best per­form­ing coun­try at 129 and Ta­jik­istan (8.3) was the worst in first place.

How­ever, Fin­land, Ice­land, Den­mark and Slove­nia, along with Cyprus – with the sev­enth high­est in­crease - recorded a sig­nif­i­cantly higher risk rat­ing in 2018.

“The re­cent Danske Bank scan­dal seems to con­firm the ob­ser­va­tion that there are big is­sues with the ef­fec­tive­ness of money laun­der­ing su­per­vi­sion in coun­tries gen­er­ally re­garded as low-risk,” said the re­port.

“The re­sults il­lus­trate that most coun­tries are typ­i­cally stronger on tech­ni­cal com­pli­ance and strug­gle with ef­fec­tive im­ple­men­ta­tion of le­gal re­quire­ments,” it added.

Although still at the top of the list of low-risk coun­tries, Fin­land saw a de­te­ri­o­ra­tion in its over­all score due to changes in its Fi­nan­cial Se­crecy In­dex rat­ing, as well as other in­di­ca­tors of cor­rup­tion and fi­nan­cial trans­parency.

Poland demon­strated higher risks in such in­di­ca­tors as fi­nan­cial se­crecy, cor­rup­tion, fi­nan­cial trans­parency and po­lit­i­cal and le­gal risks.

“Cyprus saw in­creased fi­nan­cial se­crecy scores and was also, cru­cially, in­cluded in the UN INCSR list of Ju­ris­dic­tions of Pri­mary Con­cern,” said the re­port.

This is the sev­enth edi­tion of the Basel AML In­dex is­sued by the In­ter­na­tional Cen­tre for As­set Re­cov­ery, part of the Basel In­sti­tute on Gov­er­nance.

Es­ti­mates of the amount of money laun­dered world­wide range from US$500 bil­lion to a stag­ger­ing US$1 tril­lion.

“Most coun­tries are mak­ing lit­tle or no progress to­wards end­ing cor­rup­tion and pub­lic trans­parency is show­ing signs of de­cline, with govern­ments mak­ing less in­for­ma­tion avail­able about how they man­age pub­lic funds,” the re­port said.

It

said

in­di­ca­tions

are

that

global

press free­dom has de­clined to its low­est point in 13 years.

“All these fac­tors are known to im­pact neg­a­tively on the risk of ML/TF.”

Over the seven years since it was first cal­cu­lated, the Basel AML In­dex has in­di­cated slow progress among most coun­tries in i mprov­ing their ML/TF risk scores.

Some 64% of coun­tries in the 2018 rank­ing (83/129) have a risk score of 5.0 or above and can be loosely clas­si­fied as hav­ing a sig­nif­i­cant risk of money laun­der­ing and ter­ror­ist fi­nanc­ing. The mean av­er­age level of risk re­mains above this (5.63 in 2018).

Less than 4% of coun­tries in the rank­ing (4/129) have im­proved their scores by 1 point or more in the last year (Ghana, Bolivia, Tan­za­nia, Trinidad and Tobago). Be­tween 2012 and 2018, only 17% (21/129) have im­proved their score by 1 point or more.

The down­ward trend is more strik­ing as 42% of coun­tries have wors­ened their risk scores be­tween 2017 and 2018. Al­most 37% of coun­tries now have a worse risk score than they did in 2012.

The high­est risk score has also re­mained roughly the same, fluc­tu­at­ing be­tween 8.55 and 8.6 be­tween 2012 and 2018.

“Clearly, still too lit­tle is be­ing done to ef­fec­tively counter ML/TF risks,” said the re­port.

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