Iran again holds top spot on money-laundering risk index

Jul 30
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Iran holds top spot on money-laundering
Iran holds top spot on money-laundering

Wall Street Journal
Thursday, 28 July 2016

Iran held the number-one spot for the third consecutive year in the Basel AML Index, an annual ranking of countries assessing their money laundering risk.

The 2016 edition of the index,published this weekby the Basel Institute on Governance, covers 149 countries; it’s the fifth edition of the rankings. More countries improved their ratings on the index since last year’s edition, the Basel Institute said, noting, however, that global effectiveness in fighting money laundering remains weak. Although a majority of countries legally comply with international standards, they fall short in the implementation and enforcement of their laws, the Basel Institute said in a statement.

Iran’s top ranking comes as the country tries to clean up its banking system in a bid to win foreign investment following the implementation in January of the nuclear agreement with global powers. Companies are wary of re-entering the market, Risk & Compliance Journal reported earlier this month, due in part to lingering concerns about the country’s anti-money laundering rules.

The 10 countries posing the highest risk for money laundering, according to the 2016 Basel AML index, are Iran, Afghanistan, Tajikistan, Guinea-Bissau, Mali, Cambodia, Mozambique, Uganda, Swaziland and Myanmar. Finland is the lowest-risk country, followed by Lithuania and Estonia, the index says.

Four countries — Barbados, Samoa, Suriname and Swaziland — were removed from this year’s index due to insufficient data, while the Basel Institute added Sudan to the latest edition as more data were available.

To assess a nation’s money laundering risk, the AML index assigns each country a score on a zero-to-10 scale based on a framework that aggregates and weights data from sources such as the World Bank, the Financial Action Task Force and the World Economic Forum. High scores indicate a country is more vulnerable to money laundering.

The FATF, an international standards body, while keeping Iran on its blacklist, in June suspended countermeasuresagainst the country for a year to give Tehran a chance to clean up its act.

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