Factors that impact a country’s risk score in the Basel AML Index

Sources

Basel AML Index scores are based on 14 indicators from publicly available sources. These indicators, and their weighting in the composite index, are:

  • Quality of AML/CFT framework (65%)
    • FATF Mutual Evaluation Reports
    • Financial Secrecy Index
    • US State Department International Narcotics Control Strategy Report (INCSR)
  • Corruption risk (10%)
    • Corruption Perception Index
  • Financial transparency and standards (15%)
    • Extent of Corporate Transparency Index
    • WEF Global Competitiveness Report – Strength of auditing and reporting standards
    • WEF Global Competitiveness Report – Regulation of securities exchanges
    • World Bank IDA Resource Allocation Index – Financial sector regulations
  • Public transparency and accountability (5%)
    • Political Finance Database – Political disclosure
    • Open Budget Index – Budget transparency score
    • World Bank IDA Resource Allocation Index – Transparency, accountability and corruption in the public sector
  • Political and legal risk (5%)
    • Freedom House: Freedom in the World and Freedom of the Press
    • WEF Global Competitiveness Report – Institutional pillar
    • Rule of Law Index

For full details of all 14 indicators used, and why, see Indicators.

Weighting

The expert weighting system used places greater emphasis on indicators reflecting AML/CTF assessments and financial standards.

The FATF Mutual Evaluation Reports, Financial Secrecy Index and US INCSR therefore have a significant effect on the country’s final risk score.

65%10%15%5%5%Quality of AML/CFT FrameworkCorruption RiskFinancial Transparency & StandardsPublic Transparency & AccountabilityPolitical & Legal Risk