PHL improves in anti-money laundering index

THE Philippines improved eight spots in an annual global index measuring an economy’s risk of money laundering and terrorist financing, and their ability to counter these.

In Switzerland-based International Centre for Asset Recovery’s (ICAR) 2022 Basel Anti-Money Laundering Index, the Philippines ranked 45th out of 128 countries, an improvement from 37th spot last year.

With its overall score of 5.68 out of 10, the Philippines is deemed at medium high-risk to money laundering and terrorist financing (ML/TF).

The higher a country scores on the index, the more “dirty money” risks it faces.

Based on the index, Democratic Republic of the Congo is most at risk with a score of 8.3, while Finland has the least with a score of 2.88.

According to the AML Index, the Philippines scored 5.91 out of 10 in its risk analysis for the country’s AML/CFT framework, 6.53 in dealing with corruption and bribery, 4.07 and 4.10 in financial and public transparency, and 5.70 in political & legal risk.   

“When it comes to tackling dirty money, most countries are taking one step forward and four steps back — and remaining too many steps behind criminals seeking to launder illicit funds,” the report said. “Progress in anti-money laundering and counter terrorism financing (AML/CFT) remains paralyzed.”

According to this year’s index, the average global money laundering risk is stuck at 5.25 out of 10, in which 10 is the maximum level.   

The Basel AML index uses a methodology based on 18 indicators relevant to evaluating ML/TF risk at the jurisdiction level. These are categorized by five domains; quality of AML/CTF framework (65%), corruption risk (10%), financial transparency and standards (10%), public transparency and accountability (5%), and legal and political risk (10%).   

The Philippines remained on the Financial Action Task Force’s (FATF) “gray list” of jurisdictions subjected to increased monitoring for dirty money risks.

Officials are hoping that the Philippines will be removed from the FATF’s gray list by January 2023. — KBT