Top 5 Improving Countries According to Basel AML Index 2019
Indonesian government’s efforts in promoting the implementation of Anti-Money Laundering have come into fruition. It is marked by the entry of Indonesia in the category of ‘Top 5 Improving Countries’ as reported by Basel AML Index 2019. Basel AML Index is an independent index based on research released by Basel Institute on Governance – a non-profit organization rating countries based on risk level of money laundering and terrorist financing (ML / TF).
The index measures the risks of ML / TF from 125 countries by using publicly available data such as Financial Action Task Force (FATF), Transparency International, The World Bank, and The World Economic Forum. By using fifteen indicators of country compliance with AML / CTF regulations, level of corruption, financial standards, political disclosure, and legal procedures are combined into one overall risk score. The higher the score, the smaller the rank, the more susceptible a country is to ML / TF practices.
Indonesia is one of the five countries which demonstrate the most significant improvement in reducing ML / TF risk with a score of 5.13, down by 0.60 compared to 2018. Indonesia ranks fourth in the category after Egypt, while the top position is occupied by Tajikistan. In the general index ranking, Indonesia is at 67th position, five points ahead of its neighboring country, Malaysia. Indonesia’s ranking has improved due to the favorable FATF evaluation in September 2018.
Quoted from the PPATK press release, Indonesia has shown quite good results by obtaining improved ratings in four areas: legal framework for confiscation and seizure of assets, legal framework for non-profit organizations, immediate outcome related to the effectiveness of international cooperation, and the effectiveness of confiscation and seizure of assets. The improved ML / TF risk index is expected to change the perception in which Indonesia is regarded as a low- risk of ML / TF country. The better perception will ultimately result in positive influence on investment climate in the country.