Basel Institute on Governance

Luxembourg performs poorly in anti-money laundering index

Photo: Marc Wilwert

(CS) In an assessment of money laundering and terrorism financing risks, Luxembourg scored in the bottom half of a ranking of 152 countries carried out by the Basel Institute on Governance.

The institute says that its AML (Anti-Money Laundering) Index is the only such review carried out by an independent not-for-profit institution.

Countries are awarded scores from 0 (low risk) to 10 (high risk). High scores point towards weak anti-money laundering and combating the financing of terrorism standards, as well as lack of transparency and low institutional capacities.

The ranking does not assess actual illicit activities, but rather risk and vulnerability in the countries studied.

The ranking pulls together data from publicly available sources, such as Transparency International the World Bank, the World Economic Forum and the Financial Action Task Force. In total, 14 indicators are taken into account.

Luxembourg in the latest edition of the AML Index, published earlier this month, received a score of just 5.93, placing it in the company of Turkey and Kazakhstan, who received the same points.

Out of 152 countries, it was the 71st worst performing country, with a lower score than all other EU member states, as well as Switzerland.

The AML Index places the worst-performing countries at the top. The “top” five and most vulnerable countries therefore were Iran, Afghanistan, Tajikistan, Guinea-Bassau and Mali.

The “lowest” and thereby best scores were found in New Zealand, Lithuania, Slovenia, Estonia and Finland, which scored closest to 0 with 2.53 points – the only country to receive less than 3 points.

From the best-performing countries to the worst-performing countries down, Luxembourg scored 82nd out of 152, finding itself in the bottom half of the ranking.

Among the possible reasons for Luxembourg's bad ranking is its non-compliant status with the OECD's World Economic Forum on Transparency and Exchange of Information for Tax Purposes.

The Global Forum earlier this year agreed to a review of its assessment, requested by the government after Luxembourg introduced a number of legislative changes, for example to end banking secrecy.

For more information visit baselgovernance.org