Terrorism risks are growing due to weaknesses in anti-money laundering enforcement

//DH

Global money laundering and terrorist financing (ML/TF) risks just keep on rising, according to the 2023 Public Edition of the Basel AML Index.

And that has real impact on people’s lives today – from well-funded terrorist attacks to trillions of dollars flowing out of countries through corruption and organised crime.

The Basel AML Index is an independent ranking that assesses countries’ 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 reveals that the average global ML/TF risk level increased from 5.25 in 2022 to 5.31 in 2023, where 10 is the maximum risk.

Similar to last year, risks increased in four of the five domains measured by the Basel AML Index: corruption and bribery; financial transparency and standards; public transparency and accountability; and political/legal risks. Scores for the quality of anti-money laundering and counter-financing of terrorism (AML/CFT) frameworks remained static.

Most concerning is a drop in the effectiveness of AML/CFT systems, as our analysis of Financial Action Task Force (FATF) data shows. Even when countries have robust AML/CFT systems on paper, globally we are struggling to make these do what we desperately need them to do – prevent the misuse of the global financial system to funnel money from corruption and organised crime and to fund terrorism.