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 / 20 MAR 2012

Colombia's government announced plans for a new anti-smuggling task force to counter the contraband trade, which is estimated to cost…

COLOMBIA / 18 APR 2017

One of the chief negotiators of Colombia's largest remaining guerrilla group, the ELN, has spoken out on the rebels' peace…

COLOMBIA / 11 NOV 2013

An alleged leader of Colombia's major criminal gang, the Urabeños, has been captured in Spain, suggesting the expansionist group is…

About InSight Crime

THE ORGANIZATION

InSight Crime Tackles Illegal Fishing

15 OCT 2021

In October, InSight Crime and American University’s Center for Latin American and Latino Studies (CLALS) began a year-long project on illegal, unreported, unregulated (IUU) fishing in…

THE ORGANIZATION

InSight Crime Featured in Handbook for Reporting on Organized Crime

8 OCT 2021

In late September, the Global Investigative Journalism Network (GIJN) published an excerpt of its forthcoming guide on reporting organized crime in Indonesia.

THE ORGANIZATION

Probing Organized Crime in Haiti

1 OCT 2021

InSight Crime has made it a priority to investigate organized crime in Haiti, where an impotent state is reeling after the July assassination of President Jovenel Moïse, coupled with an…

THE ORGANIZATION

Emergency First Aid in Hostile Environments

24 SEP 2021

At InSight Crime's annual treat, we ramped up hostile environment and emergency first aid training for our 40-member staff, many of whom conduct on-the-ground investigations in dangerous corners of the region.

THE ORGANIZATION

Series on Environmental Crime in the Amazon Generates Headlines

17 SEP 2021

InSight Crime and the Igarapé Institute have been delighted at the response to our joint investigation into environmental crimes in the Colombian Amazon. Coverage of our chapters dedicated to illegal mining…