FATF Update - Basel AML Index - December - 2022 - Final

Basel AML Index Expert Edition Plus
FATF data analysis
Kateryna Boguslavska | December 2022
Basel Institute on Governance Associated Institute of the

Steinenring 60 | 4051 Basel, Switzerland | +41 61 205 55 11 University of Basel
info@baselgovernance.org | www.baselgovernance.org
BASEL INSTITUTE ON GOVERNANCE
About this report

This short quarterly report provides a brief written analysis of recent Financial Action Task
Force (FATF) data for Basel AML Index Expert Edition Plus subscribers. It covers the
previous three months and complements the Excel data sheet provided to Expert Edition
Plus subscribers and described in Annex I of this report. Please also refer to Annex I for an
explanation of how FATF data is used in the Basel AML Index, limitations regarding reliability
and comparability, and how the Excel data sheet is calculated and configured.
The Basel AML Index is a project of the International Centre for Asset Recovery at the Basel
Institute on Governance. See index.baselgovernance.org.
Table of contents
Abbreviations 1
1 FATF Mutual Evaluation Reports – full ranking 2
2 Regional analysis 5
3 Recent FATF Mutual Evaluation Reports 19
4 Jurisdictions under increased monitoring 23
5 Annex I: FATF data in the Basel AML Index 24
This report is provided for information purposes only. While reasonable efforts have been made to ensure the accuracy of this
information, no warranty is made on the accuracy or reliability of this information. Any and all company or individual decisions
and the consequences of decisions based on or informed by this information are the sole responsibility of the persons and
organisations making such decisions. The report may contain short amounts of text or data extracted from original sources for
the purpose of collating key details in an easily accessible and accurate way.
Abbreviations
AML/CFT Anti-money laundering and counter financing of terrorism
DNFBP Designated non-financial businesses and professions
FATF Financial Action Task Force
FUR Follow-up report
IO Immediate Outcome
MER Mutual Evaluation Report
ML Money laundering
NPO Non-profit organisations
R Recommendation (FATF)
TF Terrorist financing
VA Virtual assets
VASPs Virtual assets service providers
1
1 FATF Mutual Evaluation Reports – full

ranking
As of 2 December 2022, the FATF has conducted and published 139 Mutual Evaluation
Reports (MERs) with the current (2013) methodology.1 The latest MERs were issued for the
Congo, the Gambia, Paraguay and Togo.
All jurisdictions assessed with the current methodology are presented in alphabetical order
in the overview table below. The scores are scaled from 0 (minimum risk) to 10 (maximum
risk). The table displays the results with a double weight given to the effectiveness rating
(2:1). The 2:1 score is used in the Basel AML Index to calculate a jurisdiction’s overall risk
rating.
Jurisdiction FATF 2:1 Jurisdiction FATF 2:1
Albania 5.61 Lithuania 5.33
Andorra 4.58 Macao, China 4.14
Antigua and Barbuda 6.20 Madagascar 8.55
Aruba 4.24 Malawi 6.22
Armenia 4.30 Malaysia 4.25
Australia 4.40 Mali 8.02
Austria 4.96 Malta 5.42
Bahamas 6.32 Mauritania 7.53
Bahrain 4.89 Mauritius 6.41
Bangladesh 5.67 Mexico 5.33
Barbados 7.00 Moldova 5.21
Belarus 4.50 Mongolia 7.18
1 See Annex I and the description on the FATF website at: http://www.fatf-
gafi.org/publications/mutualevaluations/documents/assessment-ratings.html
2
Belgium 4.25 Morocco 6.35
Benin 8.22 Mozambique 8.78
Bermuda 3.39 Myanmar 7.88
Bhutan 7.54 Netherlands 3.52
Bulgaria 7.15 New Zealand 4.02
Botswana 7.52 Nicaragua 5.88
Burkina Faso 7.54 Niger 7.77
Cabo Verde 8.03 Nigeria 7.76
Cambodia 6.96 Norway 4.16
Cameroon 8.07 Pakistan 7.38
Canada 4.64 Palau 6.57
Cayman Islands 5.95 Panama 5.40
Chile 5.07 Paraguay 5.13
China 5.87 Peru 4.85
Colombia 5.30 Philippines 6.43
Cook Islands 4.87 Poland 5.57
Costa Rica 5.65 Portugal 4.18
Congo 8.61 Russian Federation 3.88
Croatia 6.17 Saint Lucia 8.14
Cuba 4.07 Saint Kitts and Nevis 7.26
Cyprus 4.62 Samoa 6.63
Czech Republic 4.92 San Marino 3.98
Democratic Republic of the Congo 9.19 Saudi Arabia 4.94
Denmark 5.24 Senegal 7.77
Dominican Republic 5.13 Serbia 6.05
3
Egypt 4.92 Seychelles 7.85
Eswatini 8.61 Sierra Leone 8.08
Ethiopia 7.15 Singapore 4.48
Fiji 6.37 Slovak Republic 5.78
Finland 4.69 Slovenia 5.16
France 2.69 Solomon Islands 8.14
Gambia 8.16 South Africa 6.77
Georgia 5.55 Spain 2.61
Ghana 6.34 Sri Lanka 7.23
Gibraltar 5.38 Sweden 4.04
Germany 4.41 Switzerland 4.09
Greece 4.21 Chinese Taipei 3.97
Grenada 7.27 Tajikistan 5.44
Guatemala 4.55 Tanzania 8.26
Guinea-Bissau 8.39 Thailand 5.52
Haiti 9.33 Togo 8.33
Holy See 4.66 Tonga 8.80
Honduras 4.93 Trinidad and Tobago 5.98
Hong Kong, China 4.15 Tunisia 6.60
Hungary 5.99 Turkey 5.44
Iceland 6.01 Turks and Caicos 6.59
Indonesia 4.75 Uganda 8.19
Ireland 4.24 Ukraine 5.21
Isle of Man 5.23 United Arab Emirates 5.91
Israel 2.99 United Kingdom 2.49
4
Italy 3.49 United States 3.44
Jamaica 6.70 Uruguay 5.10
Japan 5.15 Uzbekistan 4.37
Jordan 6.60 Vanuatu 7.31
Korea 4.41 Vietnam 7.37
Kyrgyzstan 5.90 Zambia 5.99
Latvia 5.56 Zimbabwe 6.93
Liechtenstein 4.32
Table 1: Jurisdictions assessed with the fourth-round FATF evaluation methodology and their scores in the Basel AML Index.
2 Regional analysis
2.1 East Asia and Pacific

Currently, 21 jurisdictions in the region have gone through the fourth-round mutual evaluation
process. Performance is very diverse, ranging from the reasonably low-risk score of 3.97
(Chinese Taipei) to the highest score of 8.80 (Tonga). China improved its score from 5.92 to
5.87 in its latest follow-up report. Cambodia also managed to demonstrate progress
(improvement from 7.13 to 6.96). Philippines improved its score from 6.48 to 6.43.
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Cambodia
New Zealand
Thail and
Vietnam
Chinese Taipei
Singapore
Solomon Islands
Australia
Korea
China
Samoa
Mongolia
Tonga
Malaysia
Indonesia
Japan
Palau
Vanuatu
Myanmar
Phil ippines
Fiji
Figure 1: ML/TF risk scores in the East Asia and Pacific region, based on FATF fourth-round evaluation data
5
2.1.1 Analysis of effectiveness in the East Asia and Pacific region

The average effectiveness of AML/CFT measures across the region stands at 28%, although
this again conceals significant variability between jurisdictions: scores range from 0% (lowest
– Vanuatu) to 58% (highest – New Zealand). Chinese Taipei (55%) and Australia (52%) also
demonstrate a relatively high level of effectiveness in implementing AML/CFT measures. On
the other side of the scale, Tonga (3%), Myanmar (3%), Mongolia (6%) and the Solomon
Islands (9%) have the lowest level of performance across the FATF’s effectiveness criteria.
The lowest effectiveness on average is in the following areas:
• Transparency of beneficial ownership (IO5, Legal persons and arrangements are

prevented from misuse for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent authorities without
impediments) – 8%
• Proliferation of weapons of mass destruction (IO11, Persons and entities involved
in the proliferation of weapons of mass destruction are prevented from raising,
moving and using funds, consistent with the relevant UNSCRs) – 10%
• Preventive measures (IO4, Financial institutions and DNFBPs adequately apply
AML/CFT preventive measures commensurate with their risks, and report suspicious
transactions) – 11%
The highest effectiveness is demonstrated in the following criteria:
• International cooperation (IO2, International co-operation delivers appropriate

information, financial intelligence, and evidence, and facilitates action against
criminals and their assets) – 30%
• Understanding of ML/TF risks and coordination of different agencies at the
jurisdiction level (IO1, Money laundering and terrorist financing risks are understood
and, where appropriate, actions co-ordinated domestically to combat money
laundering and the financing of terrorism and proliferation) – 25%
2.1.2 Analysis of technical compliance in the East Asia and Pacific region
The region’s performance in technical compliance with the FATF’s 40 Recommendations is
much better in comparison to the effectiveness criteria. The average performance across all
assessed jurisdictions is 62%, compared to an average of 28% for effectiveness. Only three
jurisdictions demonstrate performance lower than 50% (Palau, Solomon Islands and Tonga).
6
Three jurisdictions stand out with a particularly high performance (higher than 80%)
regarding technical compliance: Malaysia, Singapore and Vanuatu. The situation of Vanuatu
is rather an exception, as it has one of the highest performances in technical compliance and
simultaneously scores 0% for effectiveness.
In general, jurisdictions performed the worst in the following Recommendations:
• R25 (Transparency and beneficial ownership of legal arrangements) – 35%

• R28 (Regulation and supervision of DNFBPs) – 37%
• R22 (DNFBPs: Customer due diligence) – 37%
• R24 (Transparency and beneficial ownership of legal persons) – 40%
The best performance in technical compliance is demonstrated in the following

Recommendations:
• R9 (Financial institution secrecy laws) – 89%

• R30 (Responsibilities of law enforcement and investigative authorities) – 92%
• R21 (Tipping-off and confidentiality) – 83%
2.1.3 Europe and Central Asia

process. During the period from September to December 2022, the FATF/Moneyval
published results of follow-up reports for the following jurisdictions: Cyprus (no re-rating),
Czech Republic (no re-rating), Finland (slight improvement in technical compliance from 67%
to 68%), Georgia (slight improvement in technical compliance from 60% to 61%), Isle of Man
(no-re-rating), Slovak Republic (improvement in technical compliance from 55% to 60%).
The follow-up reports do not address what progress countries have made to improve their
effectiveness.
The lowest risk score, based on the latest MERs and follow-up reports, is demonstrated by
the United Kingdom (2.49). The highest risk score is assigned to Bulgaria (7.15).
7
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7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Serbi a
Uzbekistan
Poland
Kyrgyzstan
Italy
Germany
Hungary
Belarus
Greece
Armenia
Andor ra
Austria
Mol dova
United Kingdom
Russian Federation
Switzerland
Ireland
Finland
Isle of Man
Tajikistan
Iceland
Turkey
Portugal
France
Holy See
Ukraine
Czech Republic
Slovak Republic
Slovenia
Lithuania
Georgia
Latvia
Albania
Croatia
Bulgaria
San Marino
Spain
Sweden
Belgium
Liechtenstein
Gibraltar
Denmark
Norway
Netherlands
Cyprus
Figure 2: ML/TF risk scores in the Europe and Central Asia region, based on FATF fourth-round evaluation data
2.2 Analysis of effectiveness criteria in Europe and Central Asia

The average effectiveness of AML/CFT measures across the region stands at 42%, ranging
from 18% (lowest – Iceland and Bulgaria) to 70% (highest – UK and France).
The lowest effectiveness is demonstrated in the following areas:
• Investigation and prosecution of money laundering offences (IO7, Money

laundering offences and activities are investigated and offenders are prosecuted and
subject to effective, proportionate and dissuasive sanctions) – 33%
• Supervision of financial institutions and DNFBPs (IO3, Supervisors appropriately
supervise, monitor and regulate financial institutions and DNFBPs for compliance
with AML/CFT requirements commensurate with their risks) – 33%
The highest effectiveness is demonstrated in the following areas:

• Investigation and prosecution of terrorist financing offences (IO9, Terrorist
financing offences and activities are investigated and persons who finance terrorism
are prosecuted and subject to effective, proportionate and dissuasive sanctions) –
55%
The best performers in terms of the FATF’s effectiveness criteria are the UK (70%), France
(70%), Spain (67%), Netherlands (61%), Italy (58%), Russian Federation (58%) and
8
Switzerland (55%). The lowest effectiveness in the implementation of AML/CFT standards is

demonstrated by Iceland (18%), Bulgaria (18%), Serbia (24%), Kyrgyzstan (27%), Hungary
(27%) and Gibraltar (27%).
2.2.1 Analysis of technical compliance in Europe and Central Asia

The average performance across the region is 72%, compared to an average of 42% for
effectiveness. Three jurisdictions score 60% or less: Bulgaria – 49%, Croatia – 54%, Poland
– 54% and the Slovak Republic – 60%.
Six jurisdictions stand out with an exceptionally high performance (higher than 80%) in
technical compliance. These are Spain (83%), the UK (86%), Iceland (83%), Gibraltar (84%),
Isle of Man (83%) and Belgium (82%). Gibraltar is an example of a jurisdiction that performs
highly in technical compliance, but rather poorly regarding effectiveness. Currently, this
jurisdiction is on the FATF grey list.
In general, jurisdictions in this region performed best in the following Recommendations:

• R20 (Reporting of suspicious transactions) – 90%
The lowest performance is seen in the following Recommendations:
• R8 (Non-profit organisations) – 51%

• R15 (New technologies) – 54%
2.3 Latin America and Caribbean

process. On average, the region demonstrates 27% in effectiveness criteria and 69% in
technical compliance. In October 2022, Nicaragua was excluded from the FATF grey list. 2
2
For short briefings on jurisdictions excluded from the FATF grey list, see https://index.baselgovernance.org/download.
9
Paraguay was assessed with a MER and scored 33% in effectiveness and 79% in technical
compliance. The overall FATF score for Paraguay is 5.13, putting it in the medium-risk
category.
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3.00
2.00
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Jamaica
Paraguay
Chile
Bahamas
Turks&Caicos
Barbados
Sai nt Kitts and Nevis
Domi nican Republic
Aruba
Guatemala
Antigua & Barbuda
Grenada
Sai nt Lucia
Mexico
Uruguay
Haiti
Honduras
Cayman Islands
Costa Rica
Cuba
Colombia
Panama
Nicaragua
Trinidad and Tobago

Peru
Figure 3: ML/TF risk scores in the Latin America and Caribbean region, based on FATF fourth-round evaluation data
2.3.1 Analysis of effectiveness criteria in Latin America and the Caribbean

Average effectiveness across the region stands at 27%, ranging from 0% (Haiti) to 48%
(Aruba and Cuba).

• Proliferation of weapon of mass destruction (IO11, Persons and entities involved
impediments) – 21%
The highest effectiveness is demonstrated in the following areas:
10

• Confiscation (IO8, Proceeds and instrumentalities of crime are confiscated) – 35%
The best performers in terms of the effectiveness criteria are: Cuba (48%), Aruba (48%),
Guatemala (45%), Chile (39%), Honduras (39%) and Peru (39%). The lowest effectiveness
in the implementation of AML/CFT standards is demonstrated by: Haiti (0%), Saint Lucia
(9%), Saint Kitts and Nevis (9%) and Barbados (12%).
2.3.2 Analysis of technical compliance in Latin America and the Caribbean

The average technical compliance performance of the region is 69%, compared to an
average of 27% for effectiveness. Only two jurisdictions score lower than 60% for technical
compliance – Haiti (20%) and Saint Lucia (38%). Such low technical compliance
performance correlates with poor effectiveness performance for both jurisdictions.
Four jurisdictions stand out with a particularly high performance (80% and higher) when it
comes to technical compliance: Trinidad and Tobago (84%), the Cayman Islands (85%),
Uruguay (80%) and Cuba (81%). A high level of technical compliance for Trinidad and Tobago
and Cayman Islands contradicts their generally low effectiveness performance (18%).
In general, jurisdictions in the region performed best in the following Recommendations:
• R9 (Financial institutions secrecy laws) – 91%

• R13 (Correspondent banking) – 83%
Performance below 50% is seen in the following Recommendations:

2.4 Middle East and North Africa

Only eight jurisdictions in this region have been assessed with the FATF fourth-round
evaluation methodology. On average, the region demonstrates 35% in effectiveness criteria
and 68% in technical compliance.
11
Israel went through the follow-up process, but the jurisdiction’s score did not change. Israel
decreased its performance in R15 but equally increased its position in R16.
The lowest risk score, based on the latest MERs and FURs, is demonstrated by Israel (2.99)
and the highest risk score is assigned to Tunisia (6.60).
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5.00
4.00
3.00
2.00
1.00
0.00
Israel Bahrain Egypt Saudi United Morocco Jordan Tunisia
Arabia Arab
Emirates
Figure 4: ML/TF risk scores in the Middle East and North Africa region, based on FATF fourth-round evaluation data
2.4.1 Analysis of effectiveness criteria in the Middle East and North Africa
Average effectiveness across the region stands at 35%, ranging from 15% (Tunisia) to 67%
(Israel).

The highest effectiveness is demonstrated in the following criteria:

12

58%
• Financial intelligence is appropriately used (IO6, Financial intelligence and all
other relevant information are appropriately used by competent authorities for money
laundering and terrorist financing investigations) – 50%
The best performers in terms of effectiveness are Israel (67%), Egypt (42%) and Bahrain
(42%). The lowest performance is demonstrated by Tunisia (15%).
2.4.2 Analysis of technical compliance in the Middle East and North Africa
The average performance across all jurisdictions is 68%, compared to an average of 35%
for effectiveness. Jordan (48%) and Morocco (55%) demonstrate technical compliance lower
than 60%. At the same time, two jurisdictions achieve high performance – Saudi Arabia
(79%) and Israel (77%).
In general, jurisdictions performed best in the following Recommendations:

• R13 (Correspondent banking) – 92%
• R27 (Powers of supervisors) – 83%
Performance below 50% is seen in the following Recommendations:
• R22 (DNFBPs: Customer due diligence) – 42%

• R23 (DNFBPs: Other measures) – 42%
2.5 North America

Only three jurisdictions (Bermuda, Canada and the USA) in this region have been assessed
with a fourth-round FATF evaluation. There have been no changes in the FATF data for this
region since the last report.
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5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Bermuda United States Canada
Figure 5: ML/TF risk scores in the North America region, based on FATF fourth-round evaluation data
2.5.1 Analysis of effectiveness criteria in North America

The average effectiveness across the three jurisdictions in the region stands at 56%, making
it the highest-scoring region globally. The best-performing areas are:
• Understanding of ML/TF risks and coordination of different agencies at the

jurisdiction level (IO1, Money laundering and terrorist financing risks are understood
and, where appropriate, actions co-ordinated domestically to combat money
laundering and the financing of terrorism and proliferation) – 78%
78%
• Prevention of terrorist organisations from raising, moving funds, abusing
NGOs (IO10, Terrorists, terrorist organisations and terrorist financiers are prevented
from raising, moving, and using finds, and from abusing the NPO sector) – 78%
The lowest performance across the FATF’s 11 Immediate Outcomes is demonstrated in the
areas of:
• Transparency of beneficial ownership of legal persons and legal arrangements

(IO5, Legal persons and arrangements are prevented from misuse for money
laundering or terrorist financing, and information on their beneficial ownership is
available to competent authorities without impediments) – 22%
14
• Effectiveness of preventive measures applied by FIs and DNFBPs (IO4,

Financial institutions and DNFBPs adequately apply AML/CFT preventive measures
commensurate with their risks, and report suspicious transactions) – 33%
2.5.2 Analysis of technical compliance in the North America

The average performance of the region in technical compliance across the three jurisdictions
is 74%, with all three scoring higher than 60%. Bermuda achieved the highest result – 89%.
The best performance was demonstrated in the following FATF Recommendations:
• R2 (National coordination and cooperation) – 100%

• R9 (Financial institutions secrecy laws) – 100%
In contrast, all three jurisdictions demonstrated low compliance regarding the obligations of
designated non-financial businesses and professions (DNFBPs) in customer due diligence
and other measures (33%). However, the FATF data does not reflect the latest legislative
changes in the USA.
2.6 South Asia

Currently, only four jurisdictions in the region have been assessed with the FATF’s fourth-
round evaluation methodology: Bangladesh, Bhutan, Pakistan and Sri Lanka. There were no
new MERs in the last three months. On average, these four countries in the region
demonstrate very low effectiveness in implementing FATF standards (only 12%), while
technical compliance stands at 67%. In October 2022, Pakistan was excluded from the FATF
grey list. It also managed to improve its score during the follow-up report from 7.55 to 7.38.
15
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Bangladesh Sri Lanka Pakistan Bhutan
Figure 6: ML/TF risk scores in the South Asia region, based on FATF fourth-round evaluation data
2.6.1 Analysis of effectiveness criteria in South Asia

The region has particularly low effectiveness (12% on average). Three jurisdictions out of
the four assessed score lower than 10%: Pakistan (3%), Bhutan (6%) and Sri Lanka (9%).
Bangladesh scores 30%, bringing the overall average slightly up.
In the following four Immediate Outcomes, all four jurisdictions have been rated as being
completely ineffective (0%):
• Application of preventive measures by financial institutions and DNFBPs (IO4)

• Transparency of beneficial ownership of legal persons and legal arrangements (IO5)
• Investigation and prosecution of ML offences (IO7)
• Confiscation of proceeds of crime (IO8)
The highest level of effectiveness is achieved in investigating and prosecuting terrorist

financing offences (42%).
2.6.2 Analysis of technical compliance in South Asia

Average technical compliance across the above four jurisdictions in the region stands at
67%. All four jurisdictions showed technical compliance higher than 60%, with the highest
performance demonstrated by Bangladesh. The region is doing particularly well when it
comes to the following FATF standards:
16

• R21 (Tipping off and confidentiality) – 92%
The lowest compliance level was demonstrated in the following Recommendations:

2.7 Sub-Saharan Africa

Currently, 29 jurisdictions in the region have been assessed with the FATF’s fourth-round
evaluation methodology. From September to December 2022, the regional coverage
increased with MERs for three new jurisdictions:
• Congo scored 0% for effectiveness and 42% for technical compliance. The overall
score is 8.61 out of 10, which places it in the high-risk category.
• The Gambia obtained 3% for effectiveness and 49% for technical compliance. The
overall FATF score is 8.16, which places it in the high-risk category.
• Togo obtained similar results: 0% for effectiveness, 50% for technical compliance and
an overall score of 8.33.
Senegal underwent a follow-up report and improved its score from 8.24 to 7.77.
The average level of effectiveness in implementing the FATF standards stands at only 6%,
which is the lowest globally. The level of technical compliance is also the lowest compared
to other regions at 55% (a 1% decrease in comparison with the previous quarter). In October
2022, the FATF added the Democratic Republic of the Congo, Mozambique and Tanzania to
the grey list.3 Ghana also improved its score from 6.45 to 6.34.
3
See the Basel AML Index special report: Boguslavska, Kateryna. 2022. FATF grey-listing in Sub-Saharan Africa. Basel
Institute on Governance, https://baselgovernance.org/publications/basel-aml-index-briefing-fatf-grey-listing-sub-saharan-
africa
17
10.00
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Zimbabwe
Zambi a
Ethiopia
Botswana
Nigeria
Uganda
Congo
Niger
Malawi
Mali
Mauritius
Cabo Verde
Sierra Leone
Mozambique
Gambia
Tanzania
Mauritania
Burkina Faso
Togo
Democratic Republic Congo

Cameroon
Benin
Guinea Bissau
Madagascar
Senegal
Eswatini
Seychelles
Ghana
South Afri ca
Figure 7: ML/TF risk scores in the Sub-Saharan Africa region, based on FATF fourth-round evaluation data
2.7.1 Analysis of effectiveness criteria in Sub-Saharan Africa

The average level of effectiveness in the region is 5%. The lowest level of effectiveness is
demonstrated in the following IOs:

impediments) – 1%
• Misuse of NPO for TF (IO10, Terrorists, terrorist organisations and terrorist
financiers are prevented from raising, moving and using funds, and from abusing the
NPO sector) – 2%
The highest level of effectiveness (the “highest” being only 13%) was reached in the following
areas:

18
• Use of financial intelligence for ML/TF investigations (IO6, Financial intelligence

and all other relevant information are appropriately used by competent authorities for
money laundering and terrorist financing investigations) – 13%
2.7.2 Analysis of technical compliance in Sub-Saharan Africa

Average technical compliance across the region is 55%. Ten jurisdictions demonstrated a
technical compliance level lower than 50%: the Democratic Republic of the Congo (24%),
Mozambique (37%), Madagascar (38%), Tanzania (40%), Congo (42%), Eswatini (42%),
Senegal (43%), Cameroon (46%), Guinea-Bissau (48%), South Africa (48%) and Gambia
49%.
The region is doing well when it comes to the following Recommendations:
• R9 – (Financial institution secrecy laws) - 92%

• R21 (Tipping off and confidentiality) – 91%
The lowest results are in the following Recommendations:

• R28 (Regulation and supervision of DNFBPs) – 28%
• R7(Targeted financial sanctions related to proliferation) – 28%
3 Recent FATF Mutual Evaluation Reports
All FATF reports are available at: https://www.fatf-

gafi.org/publications/mutualevaluations/documents/assessment-ratings.html
19
Congo
Following the latest mutual evaluation, the overall FATF data score for the Republic of the
Congo, also known as Congo Brazzaville or simply Congo, is 8.61 out of 10.4 This places the
jurisdiction in the high-risk category. The jurisdiction’s AML system has been rated as 0%
effective. It scores 42% in terms of technical compliance with the FATF Recommendations.
Overall, Congo did not demonstrate a good understanding of the ML/TF risks it faces.
Understanding of ML risks also varies across sectors. Banking financial institutions generally
understand their AML/CFT obligations and implement appropriate due diligence measures.
However, the majority of DNFBPs did not demonstrate any understanding of the ML/TF risks
inherent in their activities. Additionally, the authorities have not conducted a specific study to
identify NPOs’ vulnerabilities to abuse for TF purposes.
Based on the assessment, there is no clear mechanism for identifying beneficial owners in
Congo, nor is there a designated place to centralise such information.
Congo’s AML/CFT system is said to have a low level of effectiveness due “to the non-
functioning of the authority to coordinate national policies on AML/CFT issues, the lack of
effective implementation of a criminal policy on AML/CFT, the absence of a mechanism for
disseminating lists of sanctions to reporting entities to ensure prompt implementati on of the
TFSs, and the weak targeted controls on AML/CFT by the supervisory and control
authorities.”
Congo is recommended to take the following priority measures:
• Set up a framework for cooperation, coordination between all national competent

actors.
• Improve supervision of DNFBPs.
• Develop statistical data collection.
• Adopt measures to identify natural persons or legal entities.
• Strengthen the capacity of investigative and prosecution bodies.
The Gambia
4
See: https://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-congo-2022.html
20
Gambia is assessed as a high-risk jurisdiction with an overall score of 8.16. 5 It faces

significant issues with the implementation of AML/CFT measures. The Gambia scores 3% in
effectiveness and 49% in technical compliance.
According to the MER, the main domestic proceeds-generating ML predicate offences in

Gambia are fraud, drug trafficking, theft/stealing or robbery, and bribery and corruption. Drug
trafficking in particular is generating large volumes of criminal proceeds.
Commercial banks have a good understanding of their ML/TF risks and AML/CFT
obligations. Most AML/CFT supervisory activities occur in the banking sector. However, even
though a wide range of sanctions (especially administrative) are available to supervisors,
they are not being applied in practice.
The real estate sector is considered the most vulnerable to ML risk. However, DNFBPs have
a low understanding of their ML/TF risks and AML/CFT obligations. They are also lacking
proper risk-based approach to supervision.
The Gambia has an adequate legal framework for beneficial ownership transparency, but
there are significant deficiencies in the collection and availability of beneficial ownership
information of legal persons in practice.
Despite having a well-developed legal framework for international cooperation, the

authorities have made very limited use of mutual legal assistance (MLA).
Paraguay
The results of Paraguay’s latest FATF assessment place it in the medium-risk category. 6 The
overall FATF score as calculated by the Basel AML Index is 5.13. Paraguay scores 33% in
effectiveness and 79% in technical compliance.
Based on the MER, “Paraguay's AML/CFT system has improved significantly since its last
evaluation. There is a more robust legal and institutional framework to fight against ML/TF.”
In terms of effectiveness, “Paraguay reached a moderate level and major improvements are
5
https://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-gambia-2022.html
6
https://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-paraguay-2022.html
21
needed in all areas of the AML/CFT system, except for issues related to ML investigation,
prosecution, and convictions, where fundamental improvements are needed.”
Paraguay has an acceptable level of understanding of ML/TF risks by the sectors most
exposed to the ML/TF offences. However, such sectors as lawyers and accountants, dealers
in precious metals and jewels, and VASPs lack proper evaluation of risks. The trend is similar
in regard with the supervision: “Supervision is applied with a Risk Based Approach (RBA) in
the financial sector, but only recently has it been applied for DNFBPs and VASPs”.
Supervisors have sufficient powers and the legal system for confiscation is also robust. The
country criminalised ML offences. The major challenge is “the limited proportionality and
dissuasiveness of the sanctions provided for ML as a stand-alone offence which do not
exceed the 5 years of imprisonment.” In this regard, the penalties for ML that have the
greatest impact are only those in which the associated crimes are mainly drug trafficking,
illicit enrichment, criminal association and fraud.
Paraguay is recommended to:
• Strengthen the monitoring of reporting entities by supervisors.

• Strengthen sanctions for the commission of the ML offence.
• Increase controls on cross-border transportation of money and securities.
• Provide more resources to competent authorities.
Togo
Togo is evaluated as having a high level of ML/TF risks, with a score of 8.33 out of 10.7 It
scores 0% in effectiveness. Performance in technical compliance is at the level of 50%.
As identified in the MER, “Togo is exposed to a high ML risk emanating from several offences
of a transnational nature committed both abroad and domestically.”
Togo does not have complete understanding of national ML/TF risks. The country did not
conduct a specific assessment of risks associated with virtual assets, environmental crime
and maritime piracy. Togo is also lacking specific ML/TF statistical data.
7
https://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-togo-2022.html
22
The MER identified the lack of expertise and resources as significant challenges in
investigating and prosecuting complex ML cases. Additionally, the country also faces
difficulties in cooperation between law enforcement authorities.
The quality of AML/CFT supervision is at a low level. “AML/CFT inspections are grossly
inadequate and sanctions, where meted out, are neither proportionate, dissuasive nor
effective.”
4 Jurisdictions under increased monitoring
During the latest plenary session in October 2022, the FATF removed Pakistan and
Nicaragua from the list of jurisdictions with strategic deficiencies (“grey list”). At the same
time, the Democratic Republic of the Congo, Mozambique and Tanzania were added to the
grey list.8
The full list of countries includes: Albania, Barbados, Burkina Faso, Cambodia, Cayman
Islands, the Democratic Republic of Congo, Haiti, Gibraltar, Jamaica, Jordan, Mali, Morocco,
Mozambique, Myanmar, Panama, Philippines, Senegal, South Sudan, Syria, Tanzania,
Turkey, Uganda, the United Arab Emirates and Yemen.
The Basel AML Index published a special report in November 2022 giving insights into the
FATF’s process of grey-listing and the reasons for the large number of Sub-Saharan African
countries currently on the list. Find it at: https://baselgovernance.org/publications/basel-aml-
index-briefing-fatf-grey-listing-sub-saharan-africa.
8
https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-october-
2022.html
23
5 Annex I: FATF data in the Basel AML Index
A core component and focus of the Basel AML Index is the use of FATF Mutual Evaluation
Reports (MERs). The performance of jurisdictions in the Basel AML Index is largely driven
by FATF data and the methodology of the FATF assessment of a particular jurisdiction.
As part of the Basel AML Index Expert Edition Plus service, FATF scores (Compliant, Largely
Compliant, Partially Compliant, No Compliant) are converted into numerical scores from 0 to
3. The scores are then re-scaled from 0 to 10.
5.1 Data reliability and comparability

Since the FATF introduced its fourth-round methodology in 2013, it has evaluated
jurisdictions’ performance in terms of two criteria: technical compliance with the FATF’s 40
Recommendations (R) and effectiveness according to 11 Immediate Outcomes (IO). The
previous methodology focused only on technical compliance.
Even though FATF data is one of the most important sources for covering ML/TF risks, there
is still a long list of jurisdictions assessed with the old methodology. In the absence of fourth-
round evaluations, assessment of jurisdictions under third-round evaluations might be
questioned for inconsistent or non-systematic coverage. These obstacles reduce
comparability of FATF data across jurisdictions with different methodologies of assessments.
During the first years of implementing the new FATF evaluation methodology, there were
occasionally concerns about the comparability of data and the presentation of findings.
However, we have noticed a significant improvement in this respect, which has a positive
effect on the validity of the Basel AML Index too. Harmonisation of the reporting methodology
and regular updates of consolidated FATF assessments are providing greater opportunities
for enhanced analysis.
Many jurisdictions included in the Basel AML Index and demonstrating good performance
have not been evaluated by the FATF in the last few years, including Estonia (last evaluated
in 2014), Macedonia (2014), Montenegro (2015). Consequently, these jurisdictions will not
drastically change their position in the Basel AML Index before the new FATF data appears.
24
5.2 Analysis of effectiveness criteria

In the context of AML/CFT, effectiveness is the extent to which financial systems and
economies mitigate the risks and threats of money laundering and terrorist financing
(ML/TF). According to the FATF methodology, this could be in relation to the intended result
of a given:
a) policy, law or enforceable means;

b) programme of law enforcement, supervision or intelligence activity; or
c) implementation of a specific set of measures to mitigate the money laundering and
financing of terrorism risks, and combat the financing of proliferation.
Ratings in relation to the effectiveness criteria reflect the extent to which a jurisdiction's
AML/CFT measures are effective. The assessment is conducted on the basis of the FATF’s
11 Immediate Outcomes (IO), which represent key goals that an effective AML/CFT system
should achieve.
5.3 Expert Edition Plus datasheet
Figure 8: Sample of FATF data in the Basel AML Index Expert Edition Plus
FATF data in the Basel AML Index Expert Edition Plus has two levels:
1. Indicator level (separately for IOs and Rs) or horizontal comparison:

• Total score per indicator
25
• Average score per indicator

• Performance (proportion of the potential achievements and real results)
2. Jurisdiction level (separately for IOs and Rs) or vertical comparison:

• Total score per jurisdiction
• Average score per jurisdiction
• Performance per jurisdiction (proportion of the potential achievements and real
results)
Updates are provided on a quarterly basis. The data is presented in Excel format, along with
graphics and an analysis of the main achievements and trends. The Excel table includes
regional indexation and information about the review authority and the date of review to allow
sorting by these criteria.
26

FATF Update - Basel AML Index - December - 2022 - Final

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Basel AML Index Expert Edition Plus

FATF data analysis

Kateryna Boguslavska | December 2022

Basel Institute on Governance Associated Institute of the

About this report

1 FATF Mutual Evaluation Reports – full ranking 2

3 Recent FATF Mutual Evaluation Reports 19

4 Jurisdictions under increased monitoring 23

5 Annex I: FATF data in the Basel AML Index 24

AML/CFT Anti-money laundering and counter financing of terrorism

DNFBP Designated non-financial businesses and professions

FATF Financial Action Task Force

FUR Follow-up report

MER Mutual Evaluation Report

NPO Non-profit organisations

VASPs Virtual assets service providers

1 FATF Mutual Evaluation Reports – full

Jurisdiction FATF 2:1 Jurisdiction FATF 2:1

Albania 5.61 Lithuania 5.33

Andorra 4.58 Macao, China 4.14

Antigua and Barbuda 6.20 Madagascar 8.55

Aruba 4.24 Malawi 6.22

Armenia 4.30 Malaysia 4.25

Australia 4.40 Mali 8.02

Austria 4.96 Malta 5.42

Bahamas 6.32 Mauritania 7.53

Bahrain 4.89 Mauritius 6.41

Bangladesh 5.67 Mexico 5.33

Barbados 7.00 Moldova 5.21

Belarus 4.50 Mongolia 7.18

Belgium 4.25 Morocco 6.35

Benin 8.22 Mozambique 8.78

Bermuda 3.39 Myanmar 7.88

Bhutan 7.54 Netherlands 3.52

Bulgaria 7.15 New Zealand 4.02

Botswana 7.52 Nicaragua 5.88

Burkina Faso 7.54 Niger 7.77

Cabo Verde 8.03 Nigeria 7.76

Cambodia 6.96 Norway 4.16

Cameroon 8.07 Pakistan 7.38

Canada 4.64 Palau 6.57

Cayman Islands 5.95 Panama 5.40

Chile 5.07 Paraguay 5.13

China 5.87 Peru 4.85

Colombia 5.30 Philippines 6.43

Cook Islands 4.87 Poland 5.57

Costa Rica 5.65 Portugal 4.18

Congo 8.61 Russian Federation 3.88

Croatia 6.17 Saint Lucia 8.14

Cuba 4.07 Saint Kitts and Nevis 7.26

Cyprus 4.62 Samoa 6.63

Czech Republic 4.92 San Marino 3.98

Democratic Republic of the Congo 9.19 Saudi Arabia 4.94

Denmark 5.24 Senegal 7.77

Dominican Republic 5.13 Serbia 6.05

Egypt 4.92 Seychelles 7.85

Eswatini 8.61 Sierra Leone 8.08

Ethiopia 7.15 Singapore 4.48

Fiji 6.37 Slovak Republic 5.78

Finland 4.69 Slovenia 5.16

France 2.69 Solomon Islands 8.14

Gambia 8.16 South Africa 6.77

Georgia 5.55 Spain 2.61