A depiction of drying dollar bills

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.

Investigations

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
Prev Next

InSide Colombia's BACRIM: Power

InSide Colombia's BACRIM: Power

  The Bajo Cauca Franchise BACRIM-Land Armed Power Dynamics The BACRIM in places like the region of Bajo Cauca are a typical manifestation of Colombia's underworld today: a semi-autonomous local cell that is part of a powerful national network.

InSide Colombia's BACRIM: Murder

InSide Colombia's BACRIM: Murder

  Life of a Sicario Anatomy of a Hit   The BACRIM's control over territories such as the north Colombian region of Bajo Cauca comes at the point of a gun, and death is a constant price of their power.

Nariño, Colombia: Ground Zero of the Cocaine Trade

Nariño, Colombia: Ground Zero of the Cocaine Trade

The department of Nariño in southwest Colombia is the main coca-producing area in the country and in the world. It is a place scarred by poverty and years of armed conflict between guerrillas, the state and paramilitary groups. Perhaps nowhere else in the country are the challenges...

Trafficking Firearms in Honduras

Trafficking Firearms in Honduras

The weapons trade within Honduras is difficult to monitor. This is largely because the military, the country's sole importer, and the Armory, the sole salesmen of weapons, do not release information to the public. The lack of transparency extends to private security companies, which do not have...

Closing the Gaps on Firearms Trafficking in Honduras

Closing the Gaps on Firearms Trafficking in Honduras

As set out in this report, the legal structure around Honduras' arms trade is deeply flawed. The legislation is inconsistent and unclear as to the roles of different institutions, while the regulatory system is insufficiently funded, anachronistic and administered by officials who are overworked or susceptible to...

Counting Firearms in Honduras

Counting Firearms in Honduras

Estimates vary widely as to how many legal and illegal weapons are circulating in Honduras. There are many reasons for this. The government does not have a centralized database that tracks arms seizures, purchases, sales and other matters concerning arms possession, availability and merchandising. The laws surrounding...

InSide Colombia's BACRIM: Money

InSide Colombia's BACRIM: Money

  Drugs Extortion Criminal Cash Flows Millions of dollars in dirty money circulate constantly around Bajo Cauca, flowing upwards and outwards from a broad range of criminal activities. The BACRIM are the chief regulators and beneficiaries of this shadow economy.

Homicides in Guatemala: Introduction, Methodology, and Major Findings

Homicides in Guatemala: Introduction, Methodology, and Major Findings

When violence surged in early 2015 in Guatemala, then-President Otto Pérez Molina knew how to handle the situation: Blame the street gangs. 

Trafficking Firearms Into Honduras

Trafficking Firearms Into Honduras

Honduras does not produce weapons,[1] but weapons are trafficked into the country in numerous ways. These vary depending on weapon availability in neighboring countries, demand in Honduras, government controls and other factors. They do not appear to obey a single strategic logic, other than that of evading...