The aim of the Basel AML Index is to provide a holistic picture of money laundering risk. Risk, as measured by the Basel AML Index, is defined as a country's vulnerability to money laundering and related financial crimes and its capacities to counter these threats. The Index does not attempt to measure the actual amount of money laundering activity.
The 17 indicators differ in focus and scope. We choose indicators based on several criteria, including their relevance, methodology, country coverage, public access and the availability of recent data. The indicators and their weighting are reviewed annually by an independent expert group.
Click the indicators below to learn what they measure and why they are important.
Most indicators chosen for the Basel AML Index have their own scoring system. To achieve a unified coding system, individual indicator scores (variables) are collected and normalised using the min–max method into a 0–10 system, where 10 indicates the highest risk level.
As with any composite index, each variable then receives a weight to aggregate all scores into one score. The variables differ in quality, coverage and relevance, with some components being more applicable than others in assessing money laundering risk.
The Basel AML Index uses an expert weighting scheme (or so-called “participatory approach”), whereby experts assign a weight for a variable based on their in-depth knowledge and expertise in the matter. The expert weighting method includes a degree of subjectivity, which is mitigated through an annual expert review meeting.
The Basel AML Index contains some jurisdictions that are not countries or whose status is disputed. We use “countries and jurisdictions” or sometimes just “countries” as a catch-all term.
For concision, the term “anti-money laundering” (AML) is sometimes used as a shorthand to refer to systems and measures to counter money laundering, terrorist financing and proliferation financing.
Data collection for the 2024 Public Edition of the Basel AML Index was completed on 25 October 2024 and does not reflect developments after that date. The Expert Edition is updated quarterly.
There is not always a complete set of 17 indicators available for all jurisdictions. The overall score is calculated based on available data only.
In addition, only jurisdictions with sufficient data to calculate a reliable risk score are included in the Public Edition of the Basel AML Index. Russia remains excluded from the Basel AML Index Public Report in 2024 based on the FATF's suspension of Russian membership. The Expert Edition contains a more comprehensive overview of 203 countries and jurisdictions, providing risk scores and details of the available data.
The introduction of data on fraud in 2024 raises several challenges, including an inconsistent definition and scope of "fraud", the complexity of fraud as a cross-border crime, and generally poor data availability with significant under-reporting and no harmonised global standard. Other risk indicators related to financial crimes of a cross-border nature face similar challenges.
In contrast to financial risk models based purely on statistical calculations, the Basel AML Index evaluates regulatory, legal, political and financial factors that influence a country or jurisdiction’s vulnerability to money laundering and related financial crimes. The Index relies partially on perception-based indicators such as Transparency International's Corruption Perceptions Index.
Transforming qualitative data into quantitative data does not fully overcome the limitations of perception-based indicators. Unlike financial risk models, country risk models cannot be used as a solid basis for prediction or for calculating potential loss connected to money laundering or related offences.
The Basel AML Index methodology is reviewed each year to ensure that it continues to accurately capture money laundering and related risks. This may affect the comparability of the results over the years.
Comparability between countries is also hampered by a lack of full coverage by FATF fourth-round evaluations. FATF data, which assess the quality of a country or jurisdiction’s systems to counter money laundering, terrorist financing and proliferation financing, makes up 35 percent of the total risk score in the Basel AML Index. The FATF methodology was revised in 2013 (fourth round of evaluations) in order to assess not only technical compliance with the FATF Recommendations but the effectiveness of the systems in practice according to 11 Immediate Outcomes.
Although coverage with fourth-round evaluations is increasing, several countries still have evaluations based on older methodologies. To mitigate this issue, the Public Edition of the Basel AML Index only includes those that have gone through a fourth-round evaluation, as well as meet the minimum requirement of at least 65 percent of data availability across all indicators.
Fifth-round evaluations are only just commencing. Given that the FATF’s methodological change is not as great as between the third and fourth rounds, we do not envisage adjusting the methodology to account for this for the time being.
Due to the above limitations, we recommend that the Basel AML Index Expert Edition, rather than the Public Edition, should be used for compliance or risk assessment purposes.
Use of the Expert Edition should also form part of a comprehensive, risk-based compliance programme along with additional indicators and procedures relevant to the organisation's specific needs.
The Basel AML Index methodological includes a small adjustment mechanism to better reflect the progress of jurisdictions that have graduated from the FATF's grey list of jurisdictions subject to increased monitoring.
Countries or jurisdictions that graduate from the grey list have necessarily made efforts to improve their AML systems in line with an action plan agreed with the FATF. However, the FATF does not reassess the effectiveness of their systems. This makes it likely that the jurisdiction's risk score on paper does not fairly reflect their progress in reality.
To remedy this, the Basel AML Index methodology assumes that countries that have graduated from the grey list have improved the effectiveness of their systems to at least a moderate level.
For example, before being placed on the grey list, a Caribbean country was assessed as having the lowest score (0) in six of the FATF's 11 effectiveness criteria. After being removed from the grey list, the methodology assumes it has now achieved a moderate level (1) of effectiveness in those six criteria.
Sanctions and other lists relevant to evaluating a country or jurisdiction’s money laundering risks, including those issued by the FATF, UN Security Council, US Office of Foreign Assets Control, European Union and United Kingdom, are included in the Expert Edition for information purposes. They are not indicators and do not affect a jurisdiction's overall score. This is because the underlying reasons for a jurisdiction's appearance on such a list are typically reflected in the Basel AML Index data indicators.