By Lalitha Kunaratnam
KUALA LUMPUR, Malaysia--Dirty money remains a threat to society, according to Swiss corruption watchdog, Basel Institute on Governance.
Malaysia ranked 54th among 128 countries on the Basel Anti-Money Laundering (AML) Index 2022, released on Tuesday.
The country’s money laundering risk score decreased from 5.47 to 5.33 out of 10 (highest risk score) while the global average score decreased from 5.30 to 5.25.
Last year, Malaysia was in the 45th position among 110 countries while 65th in 2020 among 141 countries.
When it comes to tackling dirty money, Singapore and Indonesia seem to be performing better with a score of 4.28 and 5.19 respectively.
The 11th public edition of the Basel AML Index report assessed money laundering and terrorist financing threats around the world as well as the capacity of jurisdictions’ anti-money laundering and counter financing of terrorism (AML/CFT) measures to address their risks.
The index assessed risk scores based on 18 indicators under five domains – quality of anti-money laundering and counter financing of terrorism framework, corruption risk, financial transparency and standards, public transparency and accountability, legal and political risks. Where 0 indicates the lowest risk and 10 indicates the highest risk.
The Democratic Republic of the Congo, Haiti and Myanmar have the highest risk of money laundering, while Finland, Andorra, and Sweden have the lowest risk.
The study notes that while countries have more tools at their disposal to detect criminal funds, they lack sufficient cooperation and political willpower to translate this into concrete progress.
“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 institute said. Fixing weak spots in the financial system “is long overdue”.
The report highlights the following as well: -
a) Both public and private actors are getting better at applying a risk-based approach to money laundering and terrorism financing;
b) Progress is too slow in terms of compliance with standards on international cooperation and other crucial areas of AML/CFT;
c) Inadequate respond to the threats arising from virtual assets such as cryptocurrencies; and
d) The gap between technical compliance with standards and the effectiveness of measures in practice is widening.
*Lalitha Kunaratnam is an investigative journalist, researcher and anti-corruption activist.*
Money Laundering In Malaysia Remains A Grave Concern
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