The Basel AML Index places Malta ahead of neighbouring jurisdictions

The seventh edition of the Basel AML Index issued by the International Centre for Asset Recovery, part of the Basel Institute on Governance has placed Malta ahead of neighbouring European finance jurisdictions on the risk of money laundering and terrorist financing.

Malta was placed in 118th position out of 129 countries ahead of France in 113th position, United Kingdom in 106th position, Germany in 102nd position and Italy in 77th position.

Commenting on Malta’s placing in the Basel AML Index, FinanceMalta chairman Kenneth Farrugia said: “Malta’s position ahead of other EU jurisdictions is a result of the country’s robust regulatory and legislative framework, as well as its commitment to the international standards of transparency and effective exchange information through a broad network of EOI instruments. The country’s high regulatory standards are modelled on EU legislation and best practice, while at the same time allowing for the flexibility necessary in a modern and dynamic environment, without imposing undue bureaucratic burdens on operators.”

The Basel AML Index is an independent annual ranking that assesses the risk of money laundering and terrorist financing around the world. It focuses on anti-money laundering and countering the financing of terrorism frameworks, plus related factors that impact the risk of ML/TF, such as corruption, transparency and the rule of law. This is the sev- enth edition of the Basel AML Index issued by the International Centre for Asset Recovery, part of the Basel Institute on Governance.

The countries which are most at risk among the 129 countries ranked are Tajikistan, Mozambique and Afghanistan, while Malta sits on the other side of the scale, in 118th place followed by Montenegro, Israel, Croatia and Sweden where the risks are considered lowest.

Over the seven years since it was first calculated, the Basel AML Index has consistently indicated slow progress among most coun- tries in improving their ML/TF risk scores 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 average level of risk remains above this score (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), while between 2012 and 2018, only 17% (21/129) improved their score by 1 point or more.

The downward trend is more striking; 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.

The Basel Institute on Governance is an independent not-forprofit competence centre that specialises in corruption prevention and public governance, cor- porate governance and compliance, collective action, anti-money laundering, criminal law enforcement and the recovery of stolen assets.

Based in Switzerland, the Basel Institute is an Associated Institute of the University of Basel and regularly works with international organisations and other institutions, including the World Bank, United Nations Office for Drugs and Crime, Organisation for Economic Cooperation and Development, Council of Europe, International Monetary Fund, the Egmont Group and Interpol.