Country risk ranking for AML purposes

Abstract

Money Laundering and Funding of Terrorism do not only affect the country in which the illegal activities and illicit funds are being acted upon but also the countries which will obtain these concealed funds. Hence an illegal chain is being formed across the globe which features countries which are unwillingly being included in it due to the unlawful activities by other nations. The study which is titled Country Risk Ranking for AML aims at analysing countries and their respective risk on AML and that of formulating a country list from low risk jurisdictions to High risk. This was achieved by normalising 7 indices using the max-min formula and hence obtaining an overall score in which could be used to classify each country according to its respected score. In conjunction with these 4 interviews were conducted, 3 of which are financial institutions and 1 regulatory which in my case was the FIAU, in order to get a better insight on the priorities that banks and regulatory authorities give when assessing a particular country’s AML/CFT risks. Subsequently transcripts were done of these interviews to analyse the information gathered further information to compare and contrast with the end results obtained.