HomeNewsBriefMoney Laundering Risk Levels in Latin American Countries, Ranked
BRIEF

Money Laundering Risk Levels in Latin American Countries, Ranked

COLOMBIA / 18 AUG 2017 BY TRISTAN CLAVEL EN

An annual report by one of the world's leading institutions working against financial crimes ranks countries around the world in terms of their money laundering risk levels, providing a sense of where Latin American nations stand when it comes to this important aspect of combating organized crime.

The ranking by the Basel Institute on Governance is derived from an examination of a number of major international reports concerning several factors that facilitate money laundering, such as a weak or absent anti-money laundering legislation, corruption and lack of transparency surrounding financial flows.

Paraguay, Haiti and Bolivia had the highest scores respectively in Latin America and the Caribbean, meaning that they have the highest risk for money laundering. Colombia, which ranked 125 out of 146 countries examined worldwide, is the region's lowest-risk country according to the index, followed by Chile and the small Caribbean island of Dominica.

In terms of trends, none of the countries in Latin America and the Caribbean improved their scores significantly since last year. However, four Latin American countries appeared among the ten countries worldwide that had experienced the most significant deteriorations in their score year over year. Jamaica saw the worst decline of any country in the world, while Peru, Ecuador and Trinidad and Tobago also saw substantial worsening of their scores.

InSight Crime Analysis

The Basel Institute index provides an interesting synthesis of various reports on money laundering risk levels in countries around the world. But its methodology does have certain limits.

For example, the Basel report states that Peru made the list of the top 10 countries with the worst score deterioration due to its addition to the US State Department's list of major countries of concern in an annual money laundering report released earlier this year. However, InSight Crime was told by US officials that their decision represented a shift in the State Department report's methodology, rather than an actual deterioration of the money laundering situation in the Andean nation.

SEE ALSO: Coverage of Money Laundering

Colombia's status as the country with the lowest money laundering risk score in the region may also seem surprising. The country is awash with illicit profits from the drug and illegal mining trades as well as other criminal economies. In 2013, the head of Colombia's financial crimes enforcement unit estimated that $18 billion was laundered in the country every year, the equivalent of 3 percent of gross domestic product (GDP).

But Basel's index does not take into account the estimated quantity of money being laundered. Rather, the assessment of countries' legal frameworks and government mechanisms makes up 65 percent of the Basel score, by far the heaviest weighted category. Therefore, the reason behind Colombia's ranking is most likely the strength of its anti-money laundering and anti-terrorist financing framework. Indeed, in 2013, even as billions of dollars in illegal money were thought to penetrate the legal economy, the International Monetary Fund stated that Colombia had a "robust framework" to counter money laundering.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

COLOMBIA / 6 NOV 2014

The number of drug flights detected in Colombia has dropped by 99 percent in the last decade, indicating that the…

COLOMBIA / 19 NOV 2013

Three years ago, Buritica was a sleepy farming village tucked away in the mountains of Antioquia in northwest Colombia. Now,…

COLOMBIA / 25 MAR 2019

Colombia’s southern department of Nariño is home to an extortion scheme, where two of the country’s largest criminal organizations, the…

About InSight Crime

THE ORGANIZATION

Guatemala Social Insecurity Investigation Makes Front Page News

10 DEC 2021

InSight Crime’s latest investigation into a case of corruption within Guatemala's social security agency linked to the deaths of patients with kidney disease made waves in…

THE ORGANIZATION

Venezuela El Dorado Investigation Makes Headlines

3 DEC 2021

InSight Crime's investigation into the trafficking of illegal gold in Venezuela's Amazon region generated impact on both social media and in the press. Besides being republished and mentioned by several…

THE ORGANIZATION

Gender and Investigative Techniques Focus of Workshops

26 NOV 2021

On November 23-24, InSight Crime conducted a workshop called “How to Cover Organized Crime: Investigation Techniques and A Focus on Gender.” The session convened reporters and investigators from a dozen…

THE ORGANIZATION

InSight Crime Names Two New Board Members

19 NOV 2021

In recent weeks, InSight Crime added two new members to its board. Joy Olson is the former executive director of the Washington Office on Latin America…

THE ORGANIZATION

Senate Commission in Paraguay Cites InSight Crime

12 NOV 2021

InSight Crime’s reporting and investigations often reach the desks of diplomats, security officials and politicians. The latest example occurred in late October during a commission of Paraguay's Senate that tackled…