Brunei did second best in ASEAN when it came to mitigating money laundering and terrorist financing (ML/TF) risk, according to the 2023 Basel Anti-Money Laundering (AML) Index.
The Sultanate was placed 117 out of 152 jurisdictions by non-profit organisation Basel Institute on Governance. Its world ranking score in the index in the maiden entry was 4.38 out of 10.
The higher the score, the more “dirty money” risks a country faces. The lower the score, the better the country is performing in handling money laundering and terror financing.
The index ranks a jurisdiction based on its risks of ML/TF and its capacity to counter them.
Regionally, the Sultanate ranked second in ASEAN after Singapore (at 118th place).
The score is based on 18 indicators of ML/TF across five domains.
In its report on the region, the Basel AML said Southeast Asia is marked by particularly significant variation in risks relating to corruption and bribery, human trafficking, environmental crime, public and financial transparency, and the political/legal system. Nearly a third are deemed highrisk jurisdictions.
Similar to Latin America, profits from drug trafficking are a particular concern: 40 per cent of countries are named by the United States (US) International Narcotics Control Strategy Report as major money laundering jurisdictions.
AML/CFT measures to prevent the proliferation of weapons of mass destruction are generally ineffective, as are measures on prevention and beneficial ownership transparency.
The report said global ML/TF risks are rising, according to this year’s ranking. Governments are facing challenges in imposing financial sanctions on the practice, from identifying owners of companies to outsmarting enablers of money laundering and sanctions evasion.
“And that has a real impact on people’s lives today – from well-funded terrorist attacks to trillions of dollars flowing out of countries through corruption and organised crime,” said the report.
Risks increased in four of the five domains measured: corruption and bribery; financial transparency and standards; public transparency and accountability; and political/legal risks.
The report underlined the role in financial crimes of new technologies such as cryptocurrency, saying countries need to focus on regulation, supervision, and enforcement on clearly identified risks.
“It is the only way to foster a thriving FinTech industry while protecting financial integrity, crypto users and investors,” it said. – Azlan Othman
