Pakistan Improves its Ranking in Global Anti-Money Laundering Index

Pakistan has improved its ranking in the global anti-money laundering index, as per the Basel Anti-Money Laundering (AML) Report 2018 released a day ago.

According to the Basel AML Index, Pakistan has improved exactly by 0.08 points and scored 6.49 on the index. However, the score is still above 5, which implies that the country is among the most vulnerable countries regarding terrorist financing and money laundering.

Moreover, Pakistan holds the 25th lowest place in the list of 123 countries in the index. It is still among the 83 countries with a higher risk of money laundering and terrorist financing.

The countries with the lowest risk include Finland with 2.57 score, Estonia at 2.73, and Lithuania with 3.12 score. Finland’s progress deteriorated by 0.80 points while Estonia’s rank neither improved nor deteriorated since last year.

On the other hand, Tajikistan has the highest score of 8.3, with even more deterioration by 0.03 over one year.


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No Country with Zero Risk

The report further expressed concern that no country has a zero risk of money laundering (ML) or terrorist financing (TF). Moreover, the index indicated an increase in the minimum risk score as it moved up to 2.57 in 2018 from 1.78 in 2017.

“Money laundering and terrorist financing continue to cripple economies, distort international finances and harm citizens around the globe,” the report says.

It further states that the estimates of the amount of money laundered across the globe range from US$500 billion to a staggering US$1 trillion.

It also laments the fact that not even 4 percent of countries could improve their score by one point or more over the last year.

Factors Taken into Account

Factors like the countries’ efforts to end corruption, public transparency, the government’s disclosure of information about public funds, press freedom and the AML frameworks impact the risk of ML/TF. A decline in these factors impacts the ML/TF risks negatively.

Nevertheless, the report also states that improved mechanisms for detection of money laundering or terrorist financing, more availability of data, and changes in the Financial Secrecy Index can also be the reason for the increase in the risk score.

The report also maintained that even the low-risk score cannot be “a leave from AML/CFT vigilance”, as recent money laundering scandals involved countries which are rated as low-risk on the 2018 index.

It is pertinent to mention here that this AML index considers FATF Mutual Evaluation Reports act as a key indicator.

Via Basel AML Index 2018