The country of Estonia came in 1st place on the Basel AML Index this year, for anti-money laundering (AML) and counter terrorist financing (CTF) compliance.
The annual ranking by the Basel Institute on Governance, measures the risk of money laundering and terrorist financing in countries using data from publicly available sources and includes assessments for such things as adherence to AML law, corruption, disclosure by politicians in power, enforcement, transparency and the rule of law.
The Index does not measure actual incidents of financial crime but rather the risk of it occurring in a country, which is of more probative value given that it is that data that is the precursor for risk assessments around the world.
The top 50 countries for low AML / CTF risks in order are:
- Estonia (lowest risk)
- New Zealand
- Czech Republic
- South Korea
- St. Vincent
- St. Lucia
- South Africa
The 10 worst ranking countries (the most risky) are:
- Sierra Leone
Canada surprisingly ranked 47th, making it more risky for AML and CTF than Malta, Uruguay, Chile, Poland, Egypt, Greece, Guatemala, Romania, Jordan and Hungary and tens of others. The score of Canada was unchanged, meaning that year over year, it did not lower its AML or CTF risks.
Estonia which ranks 1st place, issues a plain language annual report from its FIU, the Politsei, on its supervisory activities, the law, and summaries of Court decisions so that reporting entities and constituents have an understanding of the role of the FIU and its effectiveness. Estonia’s FIU reports, as well, describe its activities in reference to the law (e.g., natural and legal persons) and discloses reporting entity activities involving the legal profession. The new digital ID system in Estonia, its e-citizenship and plans by its FIU to participate with the private sector in artificial intelligence for anti-money laundering law may be some of the factors that put it ahead of the game this year in law, compliance and technology.
China and the US at the FIU level have been using AI for AML purposes for decades.