Abstract
The Fund’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) program has significantly contributed to the international community’s response to money laundering and the financing of terrorism. This paper reviews how the Fund’s AML/CFT program has evolved during the past five years and discusses how the Fund could move forward in this area. The past five years have witnessed significant changes to the Fund’s AML/CFT technical assistance program. It is now being delivered more strategically than in the past and is almost exclusively funded by external resources. Its central pillar is now the AML/CFT Topical Trust Fund.
Executive Summary
The Fund’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) program has significantly contributed to the international community’s response to money laundering and the financing of terrorism. This paper reviews how the Fund’s AML/CFT program has evolved during the past five years and discusses how the Fund could move forward in this area.
The past five years have witnessed significant changes to the Fund’s AML/CFT technical assistance program. It is now being delivered more strategically than in the past and is almost exclusively funded by external resources. Its central pillar is now the AML/CFT Topical Trust Fund.
AML/CFT assessments have been, and continue to be, an important part of the ROSC and FSAP programs, and rely on close cooperation and coordination with other key players, notably the Financial Action Task Force (FATF) and the World Bank. For the purposes of the FSAP and ROSC programs, the Fund and Bank make use of unique burden-sharing arrangements under which they rely upon assessments conducted by other assessor bodies; these burden-sharing arrangements have generally worked well. Moreover, FSAP policy currently requires that all full FSAPs and FSAP updates incorporate a full AML/CFT assessment; in contrast to other standards that form part of the ROSC program, there is no framework for targeted, risk-focused assessments. The comprehensiveness of the FATF standard and the associated methodology have demonstrable benefits (e.g., by assessing institutional arrangements and effectiveness) but also pose challenges both with respect to jurisdictions’ compliance (which has been generally low) and the assessment process (which has been relatively time consuming and expensive).
Moving forward, the paper sets out considerations that would form the basis of a way forward in two important areas.
Adopt a targeted (risk-focused) approach to AML/CFT ROSCs. Such an approach would allow for the conduct of partial AML/CFT assessments focusing on the areas where there is the greatest risk of money laundering or terrorist financing taking place without detection or sanction. The introduction of such a framework would align AML/CFT ROSCs with ROSC policy for other standards. The Executive Boards of the Fund and the Bank could also consider revising the current policy requiring all FSAPs and FSAP updates to include an AML/CFT component; abandoning this mandatory link would further align AML/CFT ROSC policy with practices vis-à-vis other standards and would facilitate a more cost-effective approach to AML/CFT assessments. However, it may signal a withdrawal from the importance that the Executive Boards of the Fund and the Bank have placed on their respective institutions’ contributions to this area over the past several years. To the extent that the Executive Boards of the Fund and the Bank were to support a move towards targeted, risk-focused ROSCs and/or a revised policy on linking AML/CFT assessments to the FSAP, staff of the two institutions would seek to reach agreement with FATF and other stakeholders in the AML/CFT community on the operational implications, which would subsequently be presented to the Executive Boards of the two institutions for approval.
Establish criteria that would be taken into account in determining when AML/CFT issues may pose risks to the stability of a member’s domestic financial system or to external stability. These criteria would take into account the member’s circumstances, including the relative importance of AML/CFT versus other issues to external and financial stability issues, as well as the risk that AML/CFT issues could have important spillover effects on other members. These considerations would be used to guide staff in its Article IV surveillance, as well as in deciding whether to include AML/CFT issues in a modular financial stability assessment.
I. Introduction and Background
1. Over the past decade, the Fund has contributed significantly to the efforts of the international community to combat money laundering and terrorist financing.1 The Fund’s AML/CFT program now encompasses assessments under the ROSC program of countries’ compliance with the AML/CFT standard established by the Financial Action Task Force (FATF, see Box 1), the examination of AML/CFT issues in the context of Article IV surveillance, the provision of technical assistance, and research and policy development.
2. The Fund’s AML/CFT program has evolved gradually in line with the international community’s response to money laundering and terrorist financing and a growing recognition of the importance of these issues for the Fund.2 The evolution of the Fund’s AML/CFT program can be traced through a series of Executive Board decisions,3 the principal features of which are as follows:
In April 2001, following a request from the IMFC, the Executive Board decided that the Fund would play a role in combating money laundering through the provision of technical assistance and the conduct of surveillance under Article IV.
In November 2001, the Executive Board agreed to expand the Fund’s work to cover the problems of terrorist financing through the provision of technical assistance and the conduct of Article IV surveillance.
In 2002, the Executive Board approved the Fund’s involvement in the conduct of assessments of country’s compliance with the FATF AML/CFT standard. Specifically, the Board agreed to adopt, subject to certain conditions, the FATF standard for the purposes of the ROSC program and to launch a twelve-month pilot program of AML/CFT assessments.
In 2004, the Executive Board decided to make AML/CFT assessments a regular feature of the ROSC program and endorsed the revised FATF standard for this purpose.4 The Board also affirmed the principle that all FSAPs and FSAP updates be accompanied by an AML/CFT assessment.
In 2006, the Executive Board reaffirmed the principle that every FSAP and FSAP update be accompanied by an AML/CFT assessment and specified modalities under which this principle would be implemented.
3. It has been five years since the Executive Board last reviewed the Fund’s AML/CFT policy. While the AML/CFT program has enjoyed a number of successes over that period, it has also faced challenges. The purpose of this paper is to review experience with the AML/CFT program and to set out a way forward. It first reviews experience in two of the principal areas of the AML/CFT program—AML/CFT assessments and technical assistance—before discussing potential changes to the program in the area of ROSCs, “modular” stability assessments under the FSAP, and bilateral surveillance under Article IV.
The Financial Action Task Force (FATF)
Membership and network. The FATF was established by the G-7 in 1989. Its membership has grown from 14 countries at its inception to 34 jurisdictions at present. The FATF is complemented by eight FATF-style regional bodies (FSRBs) whose membership comprises an additional 146 jurisdictions.
Recommendations. The FATF’s 40+9 Recommendations constitute the international standard for AML/CFT. They encompass a broad range of issues including the regulation of services provided by financial institutions and nonfinancial businesses and professions, cross-border movements of currency, the transparency of legal entities, substantive and procedural criminal law, institutional capacity, sanctions, and domestic and international cooperation.
Peer Review, Transparency, and Follow-up. The FATF pioneered the practice of requiring its members to undergo periodic“mutual evaluations” or peer reviews respecting their implementation of its standard, the publication of the results of the reviews, and the regular discussion of jurisdictions’ progress in addressing deficiencies. These practices have been followed by other international bodies such as the Financial Stability Board (with respect to implementation of the BCP, IOSCO, and IAIAS principles).
II. Review of Experience
4. This section reviews the Fund’s experience with: (A) assessments of countries’ compliance with the FATF standard and (B) the provision of technical assistance.
A. Assessing Compliance with the FATF Standard
5. AML/CFT assessments are an important part of the joint Bank/Fund ROSC and FSAP programs.5 Since 2004, the Fund has conducted detailed assessments of 34 countries6 against a comprehensive, uniform methodology. These assessments have generated 30 ROSCs,7 of which 27 have been published. The World Bank, the FATF, and the FSRBs have together conducted an additional 152 assessments that have produced 140 published detailed reports and 23 ROSCs. In their totality, these reports provide a comprehensive baseline of public information on AML/CFT regimes worldwide.
6. The current framework for the conduct of these assessments differs from the rules governing ROSCs in other areas in at least three important respects.
FSAP policy requires that every full FSAP and FSAP update incorporate a full AML/CFT assessment.8 Under FSAP policy, AML/CFT assessments should, to the extent possible, be conducted within 18 months before or after the relevant FSAP mission and should be conducted approximately every five years.
While the ROSC program itself is entirely voluntary, most Fund members are required to undergo a full AML/CFT assessment approximately every five years and to publish the results by virtue of their membership in FATF or one of the eight FATF-style regional bodies (FSRBs).9
The AML/CFT program incorporates unique burden-sharing arrangements under which the Fund and the World Bank, for the purposes of the FSAP and ROSC programs, make use of assessments prepared, not only by Fund and Bank staff, but also by FATF and the FSRBs, which represents a significant leveraging of the Fund resources allocated to the assessment program. For the purposes of their own“mutual evaluation” exercises, FATF and the FSRBs make use of assessments prepared by the Fund and the Bank.10
7. These rules and arrangements reflect two important features of the AML/CFT program, in particular, in the area of assessments It is deeply integrated into another program that focuses on members’ financial sectors—the FSAP. Moreover, it forms part of a broader effort within the international community to combat money laundering and terrorist financing. As such, it relies heavily on close cooperation and coordination with other key players in the AML/CFT community—in particular, FATF and the World Bank.
8. The Fund’s experience with the AML/CFT assessment program points to several important lessons. They relate to three issues: (i) the comprehensiveness of the FATF standard and the assessment process; (ii) burden-sharing arrangements with other assessor bodies; and (iii) the use of Fund assessments in the context of FATF initiatives to deal with“non-cooperative jurisdictions.” Each of these is reviewed below.
Scope of the AML/CFT standard
9. The FATF standard and the associated assessment methodology are comprehensive and exacting. As money laundering and terrorist financing can occur through many different avenues in different sectors of the economy, the standard itself has become equally broad in scope, and broader than standards in other areas that relate to relatively discrete areas of the economy (e.g., banking regulation, the fiscal sector). The scope and depth of AML/CFT assessments also reflect the natural evolution of the FATF’s peer review process, which over twenty years, has prompted the gradual expansion and refinement of the standard.
10. The comprehensive nature of the standard sets a high benchmark both with respect to country compliance and the assessment process.
Compliance by countries with the standard is low. Of the 161 countries assessed using the current methodology from 2004 to April 2011, full compliance with any principle was rare, occurring in only 12.3 percent of the cases.11 Countries achieved the second highest score, largely compliant, only 25.5 percent of the time.
Compliance is expensive. To achieve relatively high levels of compliance, countries must invest in building institutions and promote active interagency coordination and international cooperation. It is, therefore, not surprising that relatively high levels of compliance have been achieved by countries with higher per capita income levels and more well-developed frameworks for financial regulation and fighting corruption.12 In contrast, compliance by many emerging market and low-income countries is impeded by a relatively poor understanding of AML/CFT best practices, inadequate budgets for training staff, and the absence of important preconditions (e.g., rule of law, transparency, and good governance) for the effective implementation of AML/CFT measures.
The assessment process itself requires a significant commitment of time and resources, both for the country being assessed and for the assessors (see Box 2). The conduct of an AML/CFT assessment is significantly more expensive than ROSCs in other areas.13 To examine the 285 criteria set out in the FATF assessment methodology, assessor bodies must engage in long missions, extensive interviews with a broad range of representatives of the official and private sectors (both financial and nonfinancial), and protracted follow-up discussions.14 The detailed assessment reports, upon which ROSCs are based, often exceed 300 pages.15 Nevertheless, the burden-sharing arrangement with other assessor bodies reduces the cost per assessment to the Fund, and developed countries—in the context of the recent review of the ROSC program—rated the AML/CFT ROSC as the most useful of all the ROSCs.16
The AML/CFT methodology focuses not just on formal compliance, but also the extent to which the standard is effectively implemented in the relevant country. This focus on effectiveness is a key driver of the low scores and the resource requirements, but also makes the assessments meaningful in ways that a less costly desk review could not accomplish.
The comprehensive nature of the methodology does not always allow assessors to focus on issues that are of the greatest relevance for particular countries. Under current policy, all AML/CFT assessments must be comprehensive and cannot be targeted to the circumstances of individual countries. While this approach was appropriate during the first round of assessments, its usefulness is gradually diminishing. Moving forward, it may force assessors to revisit issues that have already been covered and that may be of limited relevance for a particular country. Moreover, re-examining such issues may divert attention away from more important issues that would benefit from a deeper examination. For example, where a country has a small banking sector with a strong record of compliance but also has nonfinancial firms (e.g., trust and company service providers) that present significant vulnerabilities, it would appear appropriate to devote relatively little attention to the first area and a great deal of attention to the latter.17 The current methodology, however, requires both areas to be fully covered.
The AML/CFT Assessment Methodology
The AML/CFT assessment methodology involves an assessment of countries’ compliance with the FATF AML/CFT standard.
Compared with assessments of other standards and codes, AML/CFT assessments are time consuming and costly for both the assessors and the authorities.
Assessment missions take up to 2 ½ weeks on site and, in the case of the Fund, typically involve teams of 4–6 assessors. Pre-and post-assessment work has taken on average 17 weeks of staff work per assessor.
IMF assessments cost, on average, some $310,000. In contrast, data ROSCs, i.e., the second costliest ROSC, cost, on average, $225,000. However, factoring in the assessments prepared by the other AML/CFT assessor bodies under the existing burden-sharing arrangements, the cost of an AML/CFT ROSC to the Fund (some $112,000) is closer to the average cost for all ROSCs.
AML/CFT assessors must address some 285 criteria and interview officials from many agencies of the government and the private sector (e.g., finance ministry, regulators, customs, law enforcement, prosecutors, financial sector, lawyers, notaries, and casinos).
Assessors review the effectiveness of implementation in addition to the degree to which countries have codified the standard through law, regulation, and administrative procedures.
Detailed assessment reports often exceed 300 pages in length, plus appendices. The recent report on France exceeded 600 pages.
Technical Assistance on the Regulation of Trade in Precious Metals and Stones
Fund staff recently undertook a risk-focused AML/CFT technical assistance project targeting countries that produce and trade in precious stones and metals in Sub-Saharan Africa.
Dealers in precious stones and metals, a relatively recent addition to the list of designated professions that should be incorporated into a country’s AML/CFT regime, constitute a particularly relevant category in this region, where precious mineral exports account for a high share of total exports and formal financial systems are underdeveloped. The trade in precious minerals has been linked to illicit financial flows, corruption, drug trafficking, arms smuggling, and the financing of terrorism.
Better regulation and oversight of the precious minerals sector would be very effective in helping countries in Sub-Saharan Africa to combat money laundering and terrorism financing and should also strengthen revenue collection and improve the fiscal positions of the countries in question.
After having raised awareness in 13 countries through two regional workshops, the project is now turning to direct and tailored technical assistance to countries of the region.
Cooperation and burden sharing
11. The burden-sharing arrangements between the Fund, the World Bank, the FATF, and the FSRBs for conducting AML/CFT assessments have generally worked well. Assessors apply a common methodology and the IMF, World Bank, and FATF have collaborated closely in developing and implementing technical assistance and training programs for assessors and assessed country officials. Assessment reports provide a sound basis for follow-up technical assistance, and the involvement of multiple assessor bodies has enriched the ongoing discussion on possible improvements of the standard and the assessment methodology.
12. At the same time, burden sharing has given rise to difficulties related to the poor quality of the reports prepared by some assessor bodies. While all assessments examine the same issues, there have been notable differences in the quality of the reports. A study prepared by an independent panel at the request of the Executive Boards of the Fund and the Bank in 2006 pointed to these differences and, while noting the high quality of the reports produced by Fund staff and some other bodies, pointed to significant weaknesses in other cases.18 In the context of the most recent review of AML/CFT policy in 2006, the Executive Board expressed concern with these problems but recognized the need for the Fund to continue to rely on reports from other assessor bodies, given prevailing budgetary conditions.19 In response to these concerns, and in cooperation with the World Bank and several of the FSRBs, Fund staff has continued to help strengthen the FSRBs by training their assessors, providing comments on their assessment reports, participating in their plenary meetings, and preparing the authorities of countries about to undergo an assessment. Staff has also provided pre-assessment training to officials from 31 countries over the past five years. Many of the relevant assessor bodies have made significant progress in strengthening the quality of their assessments. Nevertheless, improving the quality and consistency of assessment reports remains a work in progress.
The FATF’s International Cooperation Review Group (ICRG)
13. The FATF currently engages in the International Cooperation Review Group or“ICRG” process to identify and engage with jurisdictions considered “to pose a significant risk to the international financial system.” This initiative is a“non-cooperative jurisdiction-type” (“NCJ”) process that applies to FATF members and nonmembers alike. It makes use of Fund and Bank ROSCs in assessing countries’ compliance with the FATF standard, and it applies both positive and negative incentives to encourage countries to strengthen their AML/CFT regimes. The FATF has issued a series of public statements expressing concern about significant deficiencies in AML/CFT regimes of a small pool of jurisdictions.
14. As explained in the recent review of the Standard and Codes Initiative,20 NCJ processes like the ICRG present challenges to the cooperative and voluntary nature of the ROSC program. In particular, the use of Fund and Bank ROSCs in a process that involves the application of coercive elements may undermine the cooperative nature of the relationship between the Bank and the Fund and their members, as well as the ROSC’s voluntary approach.
15. Since the ICRG’s inception, Fund and Bank staff have sought to ensure that the ICRG process is conducted in a manner that respects the principles underlying the ROSC program.21 Fund and Bank staff have participated in the ICRG process as observers and, with the relevant member countries’ consent, have provided information on Fund and Bank TA to countries under scrutiny and their efforts to strengthen their AML/CFT regimes. At the same time, Fund and Bank staff have not participated in the issuance of public statements or the application of coercive measures against countries under review.
16. In response to concerns expressed by Fund and Bank staff, the FATF has designed the ICRG process in a manner that respects the ROSC principles. While the FATF makes use of Fund and Bank ROSCs in the process, it does not issue public statements about a jurisdiction’s deficiencies before engaging in dialogue with the jurisdiction’s officials both to confirm facts and to provide them with an opportunity to outline their plans to address the deficiencies. The statements themselves differentiate between jurisdictions that have committed to an action plan and those that have not. The public statements are designed to encourage rapid progress toward compliance with the FATF standard, but they also recognize the commitments that jurisdictions have made to improve their position.
17. Moving forward, Fund staff, in coordination with Bank staff, will continue to engage with the ICRG process as long as it continues to respect the voluntary and cooperative principles underlying the ROSC program. In this connection, Fund staff will implement the guidance recently provided by the Fund and Bank Boards in the context of the review of the Standards and Codes Initiative for engagement in NCJ processes.22 In particular, Fund staff will continue to monitor developments in the ICRG and to play a“good offices” role in providing relevant information on member countries under review as described above, while refraining from participation in those aspects of the process that are coercive in nature.
B. Technical Assistance in the area of AML/CFT
18. Technical assistance (TA) has always been an important component of the Fund’s work in the area of AML/CFT. The assessment and technical assistance programs have been mutually reinforcing. The past five years have witnessed significant changes to the Fund’s TA program and offer important lessons with respect to (i) the role of external financing and (ii) the relationship between AML/CFT assessments and TA.
Transition to External Financing for TA
19. Over the past three years, the model underlying the IMF’s AML/CFT TA program has undergone a complete transformation. While the Fund’s AML/CFT TA has historically been financed primarily through internal resources, this approach was abandoned in FY2008 and was replaced with a new framework under which almost all of the Fund’s AML/CFT TA would be financed with external resources.
20. The central pillar of this new approach was the establishment of the AML/CFT Topical Trust Fund (TTF) in FY2009. The TTF was the first topical trust fund established by the Fund and has been followed by similar trust funds in the areas of tax policy and administration and managing natural resource wealth. The AML/CFT TTF is a multi-donor trust fund that is designed to provide the Fund with a pool of resources to finance virtually all of its AML/CFT TA. The TTF is supported by twelve donors23 who have pledged $25,274,610 for five years of operations through FY2014. The donors comprise a steering committee that meets annually and provides strategic guidance to Fund staff, reviews and approves the TTF work and financial plans, and facilitates cooperation among donors and other AML/CFT TA providers. The TTF’s five-year program document, annual meetings, and regular reviews of progress and performance promote results-based management and accountability by Fund staff and recipient countries.24
21. With the establishment of the TTF, the AML/CFT TA program has been adjusted to ensure that it focuses on areas where the Fund’s comparative advantage results in specific, value-adding contributions to global AML/CFT efforts. Specifically, the allocation of AML/CFT TTF resources is directed toward medium-term capacity building and follows a four-pronged prioritized strategy:
Focusing on systemically-important countries, middle-income countries, and countries with significant ML or TF risks;25
Focusing on areas related to the Fund’s core competencies, i.e., overall system design, financial sector regulatory issues, law reform, good governance, and institution building;
Striking the appropriate balance between bilateral programs for systemically-important members and regional approaches; and
Enhancing TA delivery through: (i) long-term planning with emphasis on fostering closer relationships with country officials and area departments; (ii) developing regional and country strategies; (iii) maximizing the use of external resources; (iv) combining staff expertise with short- and long-term field experts to optimize skill mixes and realize savings on travel cost; and (v) implementing strict quality control measures.
22. The AML/CFT TTF—and support from other external sources—demonstrates the advantages that external financing offers for Fund TA in the AML/CFT area. The TA program financed by the TTF has already had a number of early successes including an important project in Thailand, which has received high-level political support (Box 4). External financing has provided an important“market test” that demonstrates the value that the international community attaches to Fund TA in this area.
23. Of course, challenges remain in meeting demand, designing programs, and focusing on Fund priorities and results in TA programs. One risk associated with external financing is that priorities set by the donors may not always align with those of the Fund. It is also important to donors that the Fund itself continues to demonstrate an internal commitment to the program. At present, Fund staff has almost no internal resources to respond to requests for TA, even where such TA may be necessary to support broader Fund initiatives in a member country (e.g., related to a Fund-supported program). The Fund’s interests may be better protected through the setting aside of a small pool of resources that would ensure that these requests could be promptly met. Moreover, although the donor community provides financing support for some of the Fund’s analytical work on AML/CFT, they do expect the Fund itself to support these initiatives.
IMF AML/CFT TA to Thailand
The Kingdom of Thailand has a significant economy and a well-integrated financial sector, but it demonstrated poor compliance with the international AML/CFT standard during a 2007 FSAP. The FATF’s International Cooperation Review Group (ICRG) has identified Thailand as a country with strategic AML/CFT deficiencies. Following the FSAP, the Thai authorities asked the Fund to enter into a 3–5 year strategic partnership to enhance the performance and capacities of its Anti-Money Laundering Office (AMLO) and other primary AML/CFT-related agencies.
After securing financial support from the externally-financed AML/CFT TTF, the Fund entered into the strategic partnership with Thailand in April 2009 to address the deficiencies identified by the assessment and respond to concerns raised by the ICRG. The overall objective of the program is for Thailand to establish a comprehensive AML/CFT legal, regulatory, and institutional framework (including laws, regulations, guidelines, and training of personnel) to comply with AML/CFT standards.
The program represents a significant investment by the TTF; it has been designed around a high-level Master Implementation Plan (MIP) endorsed by the Thai Cabinet and involves a series of modules delivered by a core project team of experts operating peripatetically, complemented by specialized expertise to address specific issues, and overseen by HQ staff. The program has been structured to take into account the absorptive capacity and consensus-oriented culture of the Thai authorities, the resource capacity of Fund staff, and the timetable for implementation of the MIP.
The MIP and the 3–5 year TA program of planned TTF modules was officially launched by the Minister of Justice at a national seminar convened by the Thai authorities on October 28–29, 2009 and attended by over 50 key agencies and private sector stakeholders, which helped secure broad national commitment. In December 2010, the Cabinet formally endorsed a detailed National AML/CFT Strategy that articulates detailed objectives, timelines, and responsible parties across the full range of measures required for an effective AML/CFT regime. The TA program has also helped the authorities prepare comprehensive draft legislation on AML and CFT and to respond to the FATF ICRG process. Training of personnel is underway and Fund staff is coordinating effectively with other TA providers.
Relationship between assessments and TA
24. Experience over the past five years has highlighted the synergies that can be realized between AML/CFT assessments and the provision of TA. Along with the World Bank, the Fund is the only global institution that has a permanent staff of assessors and a global reach that facilitates conducting assessments and providing TA. Assessment experience develops technical expertise in the standard that is highly useful to members seeking to improve their compliance, whereas TA experience develops practical and comparative perspectives that inform assessments. Of the 34 assessments conducted by the Fund since 2004, 5 of them have led to follow-up technical assistance relationships. The Fund (together with the World Bank) is also unique, among other AML/CFT actors, in its ability to link AML/CFT to the broader macroeconomic, financial sector stability and development imperatives currently confronting the international community.
25. Fund staff has conducted cross-country analysis to support global TA and assessment efforts as well as the Fund’s surveillance. During the past several years, research has been conducted on the economic effects of AML/CFT measures on remittance flows, the freezing of terrorist assets, the confiscation of the proceeds of crime, financial intelligence unit operations, suspicious transaction reporting, and AML/CFT regimes for nonfinancial businesses and professions.26
III. The AML/CFT Program—the Road Ahead
26. Against this background, the question arises: how should the Fund move forward with its AML/CFT program? The challenges described above call for a fresh perspective—and perhaps a new approach—in several areas to ensure that the AML/CFT program continues to effectively contribute to the global response to the evolving threat posed by ML/TF, and to coordinate well with the rest of the international community (in particular, the FATF).
27. Questions also arise as to how the Fund’s assessment work could be better integrated into bilateral surveillance under Article IV. Since 2001,27 the Fund has endeavored to ensure appropriate coverage of AML/CFT issues in the context of surveillance. At the time of the last review of AML/CFT policy in May 2006, the Executive Board noted its expectation that the Fund would continue to monitor significant financial sector problems arising from money laundering or terrorism financing activities through Article IV consultations.28 This has generally taken place and, during the period covered by the 2004 to the 2009 consultation cycles, about 50 percent of Article IV staff reports referred to AML/CFT.29 However, this coverage has been somewhat haphazard, has focused on compliance rather than risk, and has not fully reflected the efforts in the Fund to focus Article IV surveillance on the issues of greatest importance.
28. This section, therefore, proposes possible changes in the policy framework in two broad areas: (A) the introduction of a risk-focused approach to AML/CFT assessments under the ROSC program and (B) the more effective integration of AML/CFT issues into“modular” stability assessments under the FSAP, and bilateral surveillance under Article IV. The discussion of a risk-based approach to AML/CFT assessments has been formulated jointly by staff of the Fund and the Bank and is being presented jointly for consideration to the Executive Boards of the two institutions.30
A. Risk-focused AML/CFT Assessments
29. Given that about 80 percent of Fund members have already undergone a full AML/CFT assessment, the question arises whether future assessments of these members should take a more flexible, tailored approach. FATF itself is considering a move towards a more targeted approach. FATF/FSRB members have almost universally expressed the view that the next round of AML/CFT assessments should be more focused on key areas and less resource intensive. Consensus is building toward an assessment process that will concentrate on (i) areas where countries have a record of poor compliance, (ii) key or core31 areas of the standard or where the standard has been amended, and/or (iii) areas where individual countries face particular risks, either domestic or cross border.32
30. A strong case can be made for the Fund and the Bank to move towards a targeted, risk-focused approach in the conduct of their AML/CFT assessments. Under this approach, both institutions would dispense with the requirement that every AML/CFT assessment take the form of a full assessment and, rather, would allow the Bank and the Fund, where appropriate, to engage in more targeted and focused assessments. The scope of the assessment and the choice of areas that would be examined would be based upon the circumstances of the country whose framework was being assessed. More specifically, the Fund and the Bank would continue to insist that a member undergo a comprehensive assessment against the full AML/CFT standard—but only once. Subsequent assessments of the member’s compliance with the AML/CFT standard would be based upon an analysis of the relevant risks and, in most cases, would take the form of a partial update.33 Given that the vast majority of countries have already been assessed under the current standard, the frequency of full AML/CFT assessments conducted by the Bank and the Fund would be expected to diminish over time.
31. This approach would bring the Fund and the Bank AML/CFT assessment programs in line with the ROSC policy for other standards. Over the past two years, the Bank and Fund have moved towards targeted, risk-focused assessments for all existing standards other than AML/CFT.34 Under the current policy for financial sector ROSCs, a member’s first assessment against a particular assessment must be comprehensive. However, subsequent assessments are targeted to the most important areas that are chosen on the basis of criteria that Fund and Bank staff have developed in cooperation with the relevant standard setters (see Box 5). These criteria, in particular, focus on principles that (i) reflect significant weaknesses identified in previous assessments, (ii) are associated with key areas of risk, (iii) are new or have been significantly revised since the last assessment, or (iv) have been affected by material changes in the member’s supervisory framework.
32. A risk-focused approach to AML/CFT assessments would be more effective and would allow the Bank and the Fund to focus on what matters most with respect to each member. It would avoid the need for staff and the authorities to waste resources assessing principles that, under the previous assessments, have been identified as posing little ML/TF risk for the relevant member. At the same time, it would free up resources that would allow the Fund and Bank to focus greater attention on issues that present the most serious risks for the member. Given the large number of full assessments that have already been completed by the international community, the Bank and the Fund have in place an extensive record of countries’ AML/CFT systems and their weaknesses. This material would be of great assistance in identifying the areas that should be covered in a risk-focused assessment for a particular country.
The Criteria for Identifying the Principles to be Assessed Under a Risk-Focused, Financial-Sector ROSC
With the exception of the AML/CFT standard, Fund policy now permits the Fund, in certain circumstances, to conduct targeted, risk-focused assessments of countries’ compliance with financial sector standards. In identifying the principles to be assessed, the mission team will take into account the relevant risks and vulnerabilities in the country in question and will focus on:
Principles1 where significant weaknesses in implementation were found during the previous assessment.
Principles associated with key areas of risk or development identified by an earlier or ongoing FSAP, bilateral surveillance missions, or country work.
Principles connected to key areas of risks or regulatory gaps identified during regional or multilateral surveillance.
Principles that have been significantly revised (or newly established) by the standard setters since the last assessment.
Principles affected by material changes in the structure of financial supervision or in laws and regulations.
Principles that deal with institutions, products, or markets that have experienced significant growth or activity since the last FSAP.
33. While a risk-focused approach for AML/CFT assessments could follow the criteria that are currently in place for other risk-based ROSCs, it could also focus more closely on the specific risks presented by ML/TF issues. Many of the criteria under existing ROSC policy identify cases where compliance with the relevant standard is weakest. The criteria for AML/CFT assessments could build on this approach but place less emphasis on cases of weak compliance per se and more emphasis on cases where such weak compliance is most likely to lead to significant ML and TF activities not being detected or sanctioned. The fact that a country has a poor record of compliance in a particular area of its AML/CFT framework does not necessarily mean that it represents a high risk for ML or TF activities. Poor compliance would lead to substantial ML or TF activity only if conditions in that country were such that a large volume of ML or TF were likely to take place through that channel.
34. There are compelling reasons why the criteria for AML/CFT assessments may need to be more exacting and formulated in a manner that“filters out” more areas of the standard than may be necessary with respect to other ROSCs. In particular, the broad scope of the AML/CFT standard compared to other standards may require the exercise of greater rigor in eliminating less important areas and in ensuring that assessment will target the issues related to the most significant risks. Thus, the choice of areas to be covered would need to consider the likelihood that significant money laundering or terrorist financing will actually take place.
35. Staff in the Fund and the Bank are working on a methodology for understanding and assessing money laundering and terrorist financing risks.While some aspects of the methodology are not yet fully elaborated, and Fund and Bank staff are continuing to experiment with different approaches in the context of technical assistance, staff from both institutions agree that international risk management standards should be applied in assessing the threats, vulnerabilities, and consequences that may arise from a particular money laundering or terrorist financing event (see Box 6). 35 Staff from both institutions are also contributing to ongoing discussions within FATF working groups that are also examining these issues, and—despite the inherent difficulties in assessing ML and TF risks—a broad consensus is emerging to continue working along the lines outlined by Fund and Bank staff.
Applying International Risk-Management Standards to AML/CFT
Fund and Bank staffs’ ML/TF risk-management frameworks seek to focus on mitigating the risks that flow from substantial ML or TF occurring. Under this framework, an assessment of“risk” takes into account the likelihood of an event occurring and the consequences that will ensue if it occurs. In determining the likelihood of an event occurring, the framework examines the threat that derives from the pool of illegally-acquired assets that need laundering or processing, and the vulnerabilities associated with relevant financial markets and AML/CFT controls. An assessment of consequences examines the various social, economic, and political outcomes that result from the occurrence of ML or TF risk events.
Applying risk-management principles to ML or TF is complex due in large part to the lack of sufficient data or information about past ML or TF events. Accordingly, an assessment of ML or TF risk needs to rely on a semi-qualitative, risk-scoring system that focuses on the key ML or TF risk events. These events are:
ML or TF is attempted:
Due to a co-existence of substantial amounts of proceeds of crime or of terrorist funds that need processing; and
Products, services, assets, or other circumstances that meet the launderer’s or terrorist financier’s needs; and
The perpetrator of the ML or TF is not caught:
if it is attempted, ML or TF will not be detected by the authorities (either directly or as a result of the efforts of businesses that are required to make suspicious reports); or
if it is detected, ML or TF will not be investigated by the authorities; or
if investigated, the perpetrator will not be prosecuted; or
if prosecuted, the perpetrator will not be convicted; or
The perpetrator of the ML or TF is not sanctioned:
if convicted, the perpetrator will not be punished adequately, or
if punished, the perpetrator will not be deprived of his assets.
The relevance of any given consequence will vary depending on the objectives of a given risk-management exercise. The methodology currently under development by Fund staff focuses on the consequence of ML or TF being conducted without detection or sanction.
36. Implementing a risk-focused approach to AML/CFT assessments would present operational challenges.36 First, in order to protect the integrity of the ROSC process, a methodology for choosing the principles selected for reassessment would have to be developed in cooperation with the FATF and FSRBs.37 Rather than examining a member’s compliance with a defined set of FATF Recommendations in every case, AML/CFT assessors would have to develop a deeper understanding of the economies (including the criminal and underground economies) they would assess and, on this basis, identify the areas that merit detailed examination in advance of the mission. Assessors would also have to determine whether measures adopted by assessed countries would be effective in addressing AML/CFT risks. For these purposes, an assessment would presumably need to be preceded by consultations with the relevant member and with other assessor bodies. As such, a risk-focused approach may or may not result in significant savings for the Fund and the Bank, but would help improve the quality of the assessments and the usefulness of the advice provided to members.
37. Another challenge for this review is to consider the delivery mechanisms for AML/CFT assessments and, in particular, the nature of the link between these assessments and the FSAP program. As noted above, current policy requires that FSAP assessments (except those undertaken on a modular basis) incorporate a full AML/CFT assessment. Staff’s proposal for risk-focused AML/CFT updates would involve a change in that policy to allow for partial, targeted AML/CFT assessments under some circumstances (as is already the case with all other financial sector standards). However, it raises the question whether the mandatory link between FSAPs and AML/CFT assessments should be retained. There are two options in dealing with the AML/CFT standard in the context of FSAPs.
38. In the first option, the Fund and the Bank would apply to AML/CFT the same targeted approach used for all other financial sector standards in FSAPs. AML/CFT assessments—full or targeted, as necessary—would be required to be conducted in the context of an FSAP only if staff determined that such an assessment was relevant for the member in question (notably, if the risks of AML/CFT occurring in that jurisdiction are substantial). This is essentially the approach taken with all other financial sector standards. The scope of any such assessment would be based upon the particular risk and compliance profile presented by a given jurisdiction and the joint methodology among assessor bodies envisioned above.38
39. This option would establish consistency in the approach taken on all standard assessments in the context of the FSAP and allow for a more efficient and strategic allocation of scarce resources. It would be in line with recent trends in the FSAP/ROSC programs towards greater flexibility and the efforts of the Fund and the Bank to customize the scope and depth of coverage of an FSAP towards the circumstances of individual members.39 FSAP stability modules and mandatory stability assessments under Article IV are not subject to the mandatory link, although their coverage of financial stability issues is identical to that undertaken by the Fund team in the context of“full” joint Fund-Bank FSAPs. Moreover, this option would recognize that regular AML/CFT assessments are now the norm for the vast majority of IMF members, given the conditions attached to membership of the FATF and similar regional bodies. It would, nevertheless, not preclude AML/CFT issues receiving extensive treatment in the context of an FSAP whenever justified by the relevant risks. However, it may be seen as implying a withdrawal by the Bank and the Fund from AML/CFT issues and the attention that they have received in the FSAP context.
40. In the second option, the Fund and the Bank would maintain the current requirement that all FSAPs incorporate an AML/CFT assessment. If the member had not been previously assessed under the current AML/CFT standard, a full assessment would be required. In other cases, provision would normally be made for a targeted, risk-focused assessment.40 The current policy on timing of assessments would continue to apply—that is, there would continue to be a requirement that the assessment take place within 18 months preceding or following the date of the FSAP or FSAP update mission. However, the current requirement that full reassessments be conducted every five years would be replaced with an approach under which the length of time since the last assessment would be one factor in determining the scope of an assessment.41
41. This option would have the advantage of signaling the Fund’s and the Bank’s continuing commitment to the international community’s efforts to combat money laundering and terrorist financing. It would recognize that the FSAP framework has provided an effective mechanism through which to ensure that AML/CFT issues are addressed in member countries on a consistent basis, and would acknowledge that significant progress still needs to be made in strengthening AML/CFT frameworks. However, this option would retain the unique status of the AML/CFT standard among all other components of financial surveillance and all other financial sector standards. Under this option, the differential treatment that AML/CFT assessments receive with respect to FSAPs and modular stability assessments would also be maintained: while an AML/CFT assessment is required for every FSAP/FSAP update, no similar requirement would apply to modular stability assessments.
42. Under either option, the Fund and the Bank would retain the existing burden-sharing arrangement with other assessor bodies but would need to ensure that assessments are conducted in a consistent manner. While there have historically been inconsistencies in the quality of the assessments being conducted by different assessors, a targeted approach runs the risk of creating inconsistencies arising in the coverage of different assessments. To continue with the current rules on the mutual recognition of assessments and, in particular, the policy under which the Fund and Bank would treat mutual assessments conducted by other bodies as ROSCs, the Bank and Fund would need to be satisfied that such assessments do cover the relevant issues. That is, different assessor bodies may have different views on the risks presented by a particular member’s framework and may choose to assess different recommendations. These challenges may be effectively addressed through the formulation of clear criteria and a methodology for the assessment of risks and for the choice of principles to be assessed. It would also be important to rely upon the mechanisms and working arrangements among the various assessor bodies that have been established over the past six years—including joint consultations.
43. If the Boards of the Bank and the Fund approve in principle moving to targeted, risk-focused AML/CFT assessments, staff from the two institutions will discuss with FATF and the FSRBs the modalities of implementation. FATF itself will be discussing the feasibility of a risk-focused approach over the course of the next year and Bank and Fund staff intend to participate actively in these discussions. Similarly, following guidance from the Executive Boards with respect to the nature of the relationship between AML/CFT assessments and FSAPs and FSAP updates, Fund and Bank staff would discuss operational implications with external stakeholders. To the extent that a consensus was to emerge in favor of a revised approach, Fund and Bank staff would return to their respective Executive Boards with a specific proposal for consideration. At that time, the operational details would be spelled out and, if approved, Fund and Bank staff could begin to undertake a new generation of targeted, risk-focused assessments in concert with the FATF and FSRBs.
B. Treatment of AML/CFT Issues in Modular Stability Assessments and Article IV Surveillance
44. Another important issue concerns the circumstances in which AML/CFT should be examined in the context of the Fund’s“modular” stability assessments under the FSAP or bilateral surveillance under Article IV. This section sets out a conceptual framework for assessing risk in these circumstances and then applies it in these contexts.
45. Any framework of rules for the coverage of AML/CFT issues in modular stability assessments or bilateral surveillance must be based upon an assessment of risk. However, the types of risk that are relevant in these circumstances differ from those that are relevant for risk-based AML/CFT ROSCs. The“risk-focused” approach for ROSCs described above would be concerned with the risk of substantial ML or TF taking place without detection or sanction. In contrast, and as discussed in greater detail below, modular FSAP stability assessments are concerned with risks that threaten the stability of the domestic financial system, while bilateral surveillance is concerned with risks to the“external stability” of the member. The concept of external stability refers to“a balance of payments position that does not, and is not likely to, give rise to disruptive exchange rate movements.” It encompasses domestic financial stability but is broader and extends to the stability of the economy more generally. Thus, it recognizes that, even where a member’s domestic financial system is stable, a member may find itself in a position of external instability either because of problems in the domestic economy that are unrelated to the financial system, or because of problems in the external position of the member that are unrelated to the domestic economy. At the same time, it should be recognized that there are important linkages between and among all of these risks.
46. The challenge in articulating an effective framework of rules for the coverage of AML/CFT in modular stability assessments and bilateral surveillance is to identify cases where money laundering or terrorist financing is so serious as to threaten the stability of the domestic financial system (in the case of modular stability assessments) or external stability (in the case of Article IV surveillance). Set out below is a conceptual framework for this analysis along with factors that could be taken into account in applying the framework.
Background, Cases, Analytical, and Conceptual Work
47. Money laundering and financial abuse can undermine the stability of a country’s financial system or its broader economy. The effective operation of a country’s financial system depends heavily on trust and the expectation that the highest professional, legal, and ethical standards are observed. Financial and external stability may be undermined by the act of money laundering or terrorist financing itself but also from the associated crimes (i.e.,“predicate crimes”) to which money laundering or terrorist financing relates.
48. For the purposes of analyzing the impact on financial or external stability, it is often difficult to separate the act of money laundering or terrorist financing from the related predicate crime. There is often a very close relationship between the criminal act that gives rise to proceeds and the laundering of these proceeds. Similarly, there is often a very close nexus between operations to finance a terrorist act and the terrorist act itself. It is, therefore, not surprising that the FATF standard calls for the application of a range of measures that deal not only with money laundering or terrorist financing per se, but also the predicate crimes to which they relate.42
49. There are a number of ways in which money laundering or terrorist financing, or their related predicate crimes, can undermine the stability of a country’s financial system or its broader economy. These are discussed in greater detail in Annex 4 and summarized below.
Some of these are directly attributable to problems of money laundering and terrorist financing, per se.
Loss of Access to global financial markets: The failure of a member to deal effectively with money laundering or terrorist financing may result in a loss of access of its financial system to global financial markets, with potentially negative consequences for financial stability and the economy as a whole. It is becoming a more frequent practice for national supervisors to prohibit their banks from dealing with financial institutions from countries with weak AML/CFT frameworks, or to at least subject transactions with institutions from such countries to stricter conditions.43 Even in the absence of specific guidance from the relevant national authorities, financial institutions in some countries may prove reluctant to deal with banks from jurisdictions where money laundering or terrorist financing is a major concern.
Destabilizing Inflows and Outflows: Money laundering or terrorist financing activities may give rise to significant levels of criminal proceeds or“hot money” flowing into and out of individual financial institutions in the country in ways that are destabilizing for these institutions. Such inflows or outflows can be either cross border or domestic in nature and, where transactions in illegal markets or criminal proceeds are significant in relation to the size of the country’s formal sector, these flows can affect the entire financial system.
Threats to financial stability can also arise from predicate crimes, often in combination with money laundering or terrorist financing.
Financial Sector Fraud: Money laundering may also be associated with broader problems of financial sector fraud. The potentially adverse effects on financial stability that may arise from large-scale“ponzi schemes” in the financial sectors of small island economies have been well-publicized. Financial fraud may undermine a country’s financial system in many different ways—through large-scale bank insolvencies that ensue when banks’ balance sheets are properly valued, by large outflows of capital from the banking system as the scale of the fraud becomes known, or by the loss of access to international financial markets arising from the deterioration in the jurisdiction’s reputation.
Problems with Financial Sector Supervision: Money laundering and terrorist financing may serve as evidence of deeper problems respecting the integrity of a country’s framework for financial sector supervision. Where important financial institutions within a country are owned or controlled by criminal elements, the authorities may encounter difficulty in supervising these institutions or in identifying and addressing problems before domestic financial stability is undermined.
Corruption: The proceeds of grand corruption are among the largest sources of laundered funds. Bribery, corruption, and associated governance issues can have direct and indirect impacts on financial stability. The proceeds of corruption are a key component of illicit financial flows that can create reputational risk for recipient financial institutions, wherever they are located, pose particular threats for offshore financial centers (OFCs) with smaller financial sectors, and represent potentially destabilizing outflows from the source country.
Terrorist Financing and Economic Paralysis: Incidents of terrorism and terrorist financing may also undermine the stability of a country’s financial system—either because of a history of terrorist incidents or through the effect of a single but significant incident. These circumstances may make key sectors of the economy vulnerable to declines in economic activity to the point where the stability of individual banks may be threatened. More broadly, banks that are regarded as serving as a conduit for terrorist financing may be subjected to international sanctions or, more generally, may encounter difficulty in finding counterparts with which to deal in ways that undermine their own stability.
Tax Fraud: Money laundering may be associated with tax fraud that can undermine financial or macroeconomic activity in important ways. Significant levels of tax fraud may affect the government’s revenue stream to a point where its fiscal balance is significantly undermined. Moreover, as noted above, the injection of large amounts of“hot money” arising from tax evasion may subject a country’s banking system to volatile inflows and outflows that can threaten its stability. By limiting opportunities for the banking system to be used to launder the proceeds of tax evasion, a robust framework of AML/CFT controls can serve as an effective instrument in combating tax evasion. While tax crimes have not yet been incorporated as a predicate crime into the FATF standard, discussions are underway in FATF to do so.
50. In most cases of money laundering, these problems will be transmitted through a country’s financial system. Criminal proceeds and terrorist financing will generally have to be placed within a country’s financial system and may either remain there or may be transferred abroad to the financial systems of other countries. However, there are circumstances in which the predicate crimes to which money laundering or terrorist financing relate will have an adverse effect on the stability of the broader economy without necessarily directly involving the financial system. This will particularly be the case in countries with only rudimentary banking systems where illegal transactions are conducted in cash and the proceeds of crime are never introduced into the banking system. This phenomenon, in itself, affects the country’s banking system to the extent that it impedes its development (i.e., funds are not being used for formal intermediation purposes through the banking system, which impedes economic growth). Beyond their effect on the banking system, however, these cases may undermine broader macroeconomic stability in at least two important ways:
Problems with economic policymaking: Where the illegal sector forms a significant part of the economy and criminal proceeds remain in cash (i.e., without introduction to the banking system), official data on employment, consumption, and foreign exchange transactions may not fully reflect the underlying economic realities. Economic policymakers will have great difficulty in gaining a real understanding of the state of the economy and in making economic policy.
Adverse effects on growth: Corruption, especially grand corruption at the national level, has a demonstrated negative effect on fiscal balances, FDI, and growth. Production and trafficking in illegal narcotics diverts resources from legal and productive investments and activity.44 Illegal logging and other environmental crimes despoil natural resource wealth in ways that are incompatible with sustainable growth and development. In general, large illegal sectors can represent deadweights on formal economies resulting in sub-optimal growth. In extreme cases, unchecked criminal activity can rise to the level of threatening state functions and the rule of law, with associated adverse economic effects.
51. Money laundering, terrorist financing, and their related predicate crimes may undermine the stability of the country in which they originate but may also have adverse spillover effects on the stability of other countries. For example, extensive criminal activities in one country may lead to illicit transfers from and large short-term capital flows to another country with potential destabilizing effects on that country’s economy. The availability of money laundering services in one jurisdiction may encourage and facilitate tax evasion in neighboring countries with adverse effects on their fiscal positions.
52. A key determinant of the risks posed by these activities for financial stability is the magnitude of the consequences that flow from the identified threat and the vulnerabilities related to a given financial sector or economy. Thus, a relatively large threat operating in combination with a significant set of vulnerabilities in relation to a relatively small financial sector or economy will pose a relatively high overall risk. For example, the sudden influx of significant foreign proceeds of crime into a relatively small jurisdiction can result in substantial interest and exchange rate volatility for that jurisdiction. These consequences may arise even if the capital inflows emanate from a significantly larger jurisdiction that is generally unaffected by them.
53. Given the risks that these activities can pose, it is important to ensure that they are appropriately addressed in modular stability assessments and bilateral surveillance under Article IV. Specifically, where appropriate, the Fund would examine the manner and extent to which a country’s AML/CFT controls are effective in addressing the relevant issues and would identify the steps that would need to be taken to strengthen such controls. To do so, however, would require the Fund to provide clearer guidance on the circumstances in which such coverage might be appropriate. Based on the analysis provided above, staff has set out below the factors that could serve as a guide for these purposes in country-specific circumstances, recognizing that the coverage of AML/CFT issues in a modular stability assessment or bilateral surveillance will necessarily involve an element of judgment and would be limited to the most compelling cases. At the same time, staff intends to continue its work on deepening its understanding of the linkages between AML/CFT issues and financial and external stability and on improving the indicators for measuring those linkages.
The Effect of Coca Production on non-Coca GDP in Andean Countries
Andean countries remain the world’s largest producers of coca leaves. Available data from the United Nations Office on Drugs and Crime (UNODC) suggests that a total of 167,600 hectares were cultivated in Bolivia, Colombia, and Peru in 2008 to produce coca. This implies a potential manufacture of cocaine in the region of some 845 metric tons in the same year—representing nearly 100 percent of the world’s coca production.
Official data in Andean Countries suggest that the coca/cocaine sector represents only a modest share of total GDP. In particular, Peru’s national statistics do not include an estimate for the impact of coca and cocaine production in GDP. Staff has estimated that the share of production of coca and cocaine represents 0.9 percent of total GDP in 2009. Bolivia reports that the cultivation of coca leaf represents some ⅛-1¼ percent of total GDP during the period 1990–2008, while Colombian statistics indicate that the share of production of coca and cocaine has ranged between ¾–3¾ percent of total GDP from 2000 to 2008, declining toward the end of the period as a result of the coca eradication efforts.
Staff estimates suggest that coca and cocaine production have a significant indirect effect on economic activity in Andean countries.
response of InJormalGDP to REGIONAL lnJHegal_coca shocks
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response of InJormalGDP to REGIONAL lnJHegal_coca shocks
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response of InJormalGDP to REGIONAL lnJHegal_coca shocks
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response or InJormalGDP to NATIONAL ln_illegal_coca shocks
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response or InJormalGDP to NATIONAL ln_illegal_coca shocks
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response or InJormalGDP to NATIONAL ln_illegal_coca shocks
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For Peru, Pedroni and Verdugo (2010)1 finds that illegal coca and cocaine production tends to crowd out legal formal sector production at regional level regardless of whether changes in illegal coca production originate at the national or regional level. They construct regional level estimates for coca production for 11of 24 regions from 2001 to 2009 based on the input-output matrix for illicit crops elaborated by the Peruvian authorities in 2007, and IDEI (2009) estimates of tons of illegal and legal coca produced by regions. Using dynamic heterogeneous panel models—taking into account regional heterogeneity and complex unobserved inter-dependencies in the relationship between coca and non-coca-related activities—they show the median response of regional formal sector GDP to coca shocks originating both at the local regional level and the national level are negative. One standard deviation positive shock to illegal regional coca production decreases formal GDP in the same region typically by ¼ percent in a two-year horizon.
For Colombia and Bolivia, given the lack of regional data, staff uses a simple structural bi-variate VAR model with national GDP (excluding the direct effect of coca and cocaine production) vis-à-vis an estimate of the coca and cocaine GDP for these countries (based on estimates from national statistics). While for Colombia, a negative impact on non-coca real GDP growth is found, for Bolivia the opposite occurs. The latter could be a result of measurement errors in national statistics since cocaine production is not measured.
1 Sources: For Peru, Pedroni and Verdugo,“The relationship between illicit coca production and legal economic activity in Peru,” Working Paper (forthcoming). For Bolivia, Staff calculations based on Unidad deAnalisis de Politicas Sociales y Economicas (UDAPE 2010). For Colombia, Staff calculations based on Departamento Administrativo Nacional de Estatistica (DANE 2010).Modular Financial Stability Assessments
54. Under the revised FSAP policy, a modular financial stability assessment is designed to assess near-term vulnerabilities for the stability of the domestic financial system. Modular financial stability assessments must include the following three components:
An evaluation of the source, probability, and potential impact of the main risks to macro-financial stability in the near term;
An assessment of the country’s financial stability policy framework; and
An assessment of the authorities’ capacity to manage and resolve a financial crisis, should the risks materialize.
All three elements are expected to be covered in all FSSAs. Of course, stability assessments in individual cases may cover additional areas, if needed, and may also be accompanied by detailed assessments of compliance with standards and codes.45
55. Under present Fund policy, modular stability assessments may take two different forms: (i) a voluntary assessment that is conducted as a form of technical assistance at the request of the relevant member; and (ii) a mandatory assessment that is conducted in the context of bilateral surveillance under Article IV. There is no requirement that a modular financial stability assessment in either case include an examination of AML/CFT issues.46 However, in either case, it is possible for the Fund and the relevant member to agree to discuss, on an additional and voluntary basis, AML/CFT issues as part of the assessment. The modalities for addressing these issues may range from a comprehensive re-assessment (in extreme cases), to a partial ROSC update, a technical note, or simply the incorporation of a few key issues into the FSSA.
56. There is no compelling reason for the Fund to depart from the current approach under which AML/CFT issues may be included in modular stability assessments on a case-by-case basis. In principle, it should continue to be the case that such issues should only be included in a modular stability assessment if the relevant member agrees, and Fund staff believes them to be of such importance to the domestic financial stability of the member that they should be discussed. However, Fund staff and member country authorities would be better placed to assess whether AML/CFT issues should be included in a modular stability assessment if they had a clearer understanding of the circumstances in which such problems may threaten domestic financial stability. Moving forward, in determining whether to propose to a member that its modular stability assessment include a discussion of AML/CFT issues, staff would be guided by the following considerations:
A country’s access to global financial markets is vulnerable to AML/CFT-related sanctions and blacklisting;
The actual or potential level of abuse of financial institutions as instrumentalities for money laundering or terrorist financing is large relative to the country’s financial sector or GDP;
The estimated level of proceeds of crime generated in the country is large relative to the country’s formal sector (official) GDP;
Transactions in specific illegal markets (e.g., drug production and trafficking) are large relative to the country’s formal sector (official) GDP;
Criminal elements own, control, or hold a significant proportion of financial sector assets, or a significant equity interest in key financial institutions;
Regulatory capture by criminal elements or weaknesses in the regulatory and criminal justice systems hamper effective supervision of the financial sector;
There is a significant risk of financial sector fraud of a magnitude that could undermine the stability of the domestic financial system;
Corruption by government or elected officials is significant relative to the size of the economy or the government budget; and
A recent terrorist attack or the threat of one makes key sectors vulnerable (e.g., banking, tourism, foreign investment), or the level and nature of terrorist incidents otherwise threatens domestic financial stability.
The decision to examine these issues in a stability assessment would be based on an overall assessment of the member’s circumstances, including the relative importance of AML/CFT issues to other financial stability issues that may need to be covered.
Article IV Surveillance
57. There are also circumstances where AML/CFT issues may fall within the scope of bilateral surveillance under Article IV. As the purpose of bilateral surveillance is for the Fund to assess the compliance of members with their obligations under Article IV, Section 1, the scope of bilateral surveillance is delineated by these obligations. Article IV, Section 1 requires members to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. Moreover, as examples of this general obligation, it sets out specific obligations governing the conduct of a member’s domestic and external policies.
58. A member’s AML/CFT framework encompasses both domestic and external policies that fall within the scope of members’ obligations under Article IV, Section 1. Some features of the framework are domestic in nature—for example, controls on domestic operations within the country’s banking system (e.g., the transfer of balances between two domestic banks). Other features of the framework involve external policies—for example, rules governing the making of payments and transfers to financial institutions abroad.
59. Any analysis of the relevance of a member’s AML/CFT framework for bilateral surveillance under Article IV needs to be conducted with reference to the 2007 Surveillance Decision.47 It was adopted by the Executive Board to provide clear guidance on the scope of bilateral surveillance. As noted above, it establishes, as the central organizing principle of bilateral surveillance, the concept of“external stability.” The 2007 Decision recognizes that members comply with their obligations under Article IV, Section 1 by implementing policies that promote their own external stability. It also recognizes that, in the conduct of their domestic economic and financial policies, members promote external stability by promoting their own domestic stability.
60. The 2007 Surveillance Decision requires the Fund, in its bilateral surveillance, to assess the extent to which a member is promoting its own external stability. It provides that the Fund will focus on those policies of members that can significantly influence present or prospective external stability. Moreover, it provides that“financial sector policies (both their macroeconomic aspects and macroeconomically relevant structural aspects)” will always be the subject of the Fund’s bilateral surveillance with respect to each member.
61. Against this background, the question arises: in what circumstances would it be appropriate for a member’s policies respecting money laundering, terrorist financing, or their related predicate crimes to be the focus of attention in the context of bilateral surveillance, that is—on a mandatory basis under Article IV? As is always the case under the 2007 Surveillance Decision, the decision whether to examine any issue is based upon an assessment of its importance for external stability, and bilateral surveillance with respect to any member needs to focus on the issues that are the most relevant for this purpose. In principle, there would appear to be three broad cases where it may be appropriate to discuss AML/CFT issues in the context of bilateral surveillance:
Where problems with money laundering, terrorist financing, or predicate crimes may undermine the stability of the member’s domestic financial system: The considerations that the Fund could take into account in determining when an analysis of these issues (and the related policies of the member) are relevant for the purposes of a modular stability assessment would appear to be equally valid for the purposes of bilateral surveillance.
Where problems in a member country with money laundering, terrorist financing, or predicate crime may have important spillover effects on other members: While a modular stability assessment deals exclusively with the stability of a member’s domestic financial system, surveillance also addresses the spillover effects that a member’s policies can have on other members. The discussion set out above has demonstrated how the negative effects of money laundering, terrorist financing, and their related predicate crimes can spread beyond the country in which they occur and impact other countries as well. Under the 2007 Surveillance Decision, such spillover effects are required to be examined in two circumstances: (i) where they arise from the member’s external policies; and (ii) where they arise from a member’s domestic policies and the member is in a state of domestic instability.48 Spillovers related to AML/CFT will almost invariably be related to problems with a member’s external policies governing the making of international payments and transfers, or to problems with domestic financial supervision that undermine the stability of the domestic financial system. In either case, such spillovers may be an appropriate subject of bilateral surveillance.
Where problems related to money laundering, terrorist financing, or predicate crime do not affect the financial system but may still undermine the member’s external stability: While a modular stability assessment is limited to the member’s financial system, surveillance deals with the stability of the broader economy. As discussed above, there are circumstances where money laundering, terrorist financing or their related predicate crimes may not affect the stability of the financial system but may have an adverse effect on the broader economy. In particular, this may be the case where illegal transactions are not recorded in official statistics and are so large as to undermine the ability of economic policymakers to gain a true picture of the state of the economy and to formulate economic policy accordingly. Such cases could fall within the scope of surveillance.
62. Any determination of the issues to be addressed in the context of bilateral surveillance needs to be based upon the provisions of the 2007 Surveillance Decision and the circumstances of the relevant member. However, staff would be better placed to identify cases in which AML/CFT issues should be addressed in the context of bilateral surveillance if it had clearer guidance on the factors that might be relevant for this purpose. Moving forward, it is proposed that staffs determination whether to discuss AML/CFT issues as part of bilateral surveillance would continue to be based on an overall assessment of the issues that are most relevant for external stability. It would take into account the factors respecting AML/CFT that are relevant for modular stability assessments and, in addition, the following:
The actual or potential level of abuse of financial institutions as instrumentalities for money laundering or terrorist financing may pose important risks of spillovers onto other countries;
There is a significant risk of financial sector fraud of a magnitude that could have spillover effects on the financial systems of other countries;
There is a significant risk of tax fraud of a magnitude that undermines a country’s fiscal balance, or that may have important spillover effects on other countries;
Corruption by governmental or elected officials is significant relative to the size of the economy or the government budget; and
Macroeconomic policy execution is impaired by the existence of unaccounted for economic transactions generated in the informal or illegal sectors.
63. While the 2007 Surveillance Decision specifies the circumstances in which issues are required to be discussed (i.e., on a mandatory basis as part of Article IV surveillance) in an Article IV consultation, the Fund’s legal framework also permits the Fund and members to voluntarily agree to discuss other issues in an Article IV consultation even where they fall outside of the scope of Article IV. The discussion of such issues constitutes a form of“policy advice” under Article V, Section 2(b) of the Fund’s Articles and has formed the basis for the discussion of AML/CFT issues in some Article IV consultations with members. It is proposed that, moving forward, the inclusion of AML/CFT issues in Article IV consultations on a voluntary basis should continue to be possible.
IV. Resource Implications
64. Since FY2006, the Fund has substantially reduced its IMF01 expenditure on AML/CFT.49 Approximately 36 person years were expended in FY2006 for AML/CFT work. By FY2011, the expenditure in AML/CFT had been reduced to approximately 20 person years. Thus, in real terms, the Fund now devotes about half the level of resources it did six years ago. As a percentage of the Fund’s overall budget, the AML/CFT program has gone from 1 percent to 0.4 percent. The Fund’s internal AML/CFT resources are now devoted largely to complying with the May 2006 Executive Board decision that staff should conduct 6–7 AML/CFT assessments per year across the Fund’s membership, and to some related policy and surveillance support.
AML/CFT Staff and Expert Time, FY 2006–FY 2011 (person years)
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Time Reporting SystemDoes not include overtime. Policy time also includes some standard-setting activities.
AML/CFT Staff and Expert Time, FY 2006–FY 2011 (person years)
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Time Reporting SystemDoes not include overtime. Policy time also includes some standard-setting activities.AML/CFT Staff and Expert Time, FY 2006–FY 2011 (person years)
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Time Reporting SystemDoes not include overtime. Policy time also includes some standard-setting activities.65. Fund expenditures on AML/CFT have, nevertheless, exceeded the combined expenditures on all other ROSCs.50 This may be explained by the complexities of AML/CFT assessments relative to those of other standards (see Box 2). At the same time, the annual number of assessments and associated ROSCs for the other standards and codes has declined significantly over the past six years, reflecting: (i) a decrease in the overall budget allocated to ROSCs; (ii) a reduction in the number of countries undergoing initial assessments; (iii) a shift from formal ROSCs towards technical notes; and (iv) a sharp decline in FSAP-related ROSCs (the average number of standards assessments conducted during FSAP missions dropped from about four in the initial years of the Program (2000–2004) to about one in 2008 and 2009).51
66. Although the cost of preparing an AML/CFT assessment is higher than for other standards and codes, factoring in the assessments prepared by the other AML/CFT assessor bodies under the existing burden-sharing arrangements, the cost of an AML/CFT ROSC to the Fund is closer to the average cost for all ROSCs. Between 2004 to 2010, Fund staff produced 30 AML/CFT ROSCs at an estimated average cost $310,000 per assessment; factoring in the 53 ROSCs produced by other assessor bodies reduces the average cost of AML/CFT ROSCs to some $112,000 or close to the average cost for all ROSCs.52
67. External funding has enabled the Fund to continue to deliver a robust program of AML/CFT technical assistance to members as well as pursue some research. Pledges to the AML/CFT TTF of $25.2 million has permitted the Fund to finance five years of AML/CFT technical assistance and has resulted in an increase in the relative proportion and the absolute level of resources devoted to technical assistance.
Cost of AML/CFT Technical Assistance
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: PeopleSoft Financials
Cost of AML/CFT Technical Assistance
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: PeopleSoft FinancialsCost of AML/CFT Technical Assistance
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: PeopleSoft Financials68. While staff is seeking to continue the AML/CFT program on a resource-neutral basis, the resource implications of the proposals set out above are not yet clear. In particular, it is not possible to fully assess the resource implications of a move to risk-based AML/CFT ROSCs without first reaching agreement on the precise features of such a framework with the broader AML/CFT community and determining the number of assessments that can be carried out within a given resource envelope.53 As noted above, if agreement were reached with FATF and other stakeholders on a system of targeted, risk-focused AML/CFT ROSCs, staff would return to the Board with a specific proposal that would include an assessment of the resource implications.
69. Efforts to better integrate AML/CFT in modular financial stability assessments and Article IV surveillance would also have resource implications. In particular, additional preparatory work would be needed to determine whether AML/CFT issues should be addressed in either context. Enhanced involvement may also require responding to demand to create and maintain a statistical database that would support more robust assessments of risk and effectiveness.54
70. The additional costs associated with enhanced involvement in modular financial stability assessments and surveillance cannot be predicted with any degree of certainty. In any event, staff does not expect the approach outlined above to lead to a significant increase in coverage of AML/CFT issues in modular stability assessments or Article IV surveillance. Staff would also exploit synergies between its assessment, technical assistance and research work for these purposes.
71. Operationally, staff would systematically monitor country conditions in light of the factors outlined above and provide briefings and data to the relevant country teams as needed or requested, usually in the context of the pre-mission briefing exercise. For this purpose, staff would continue to rely on existing AML/CFT experts in the Legal Department’s Financial Integrity Group. If it were to appear that staff will be unable to provide sufficient support for the Fund’s AML/CFT program, staff would revisit the resource implications of the revised program either through the budget process or through an update to the Executive Board.
V. Issues for Discussion
Directors may wish to focus on the following issues:
Do Directors agree that the Fund and Bank should explore further the modalities for conducting targeted, risk-focused AML/CFT assessments with the FATF and other assessor bodies and return to the Board within two years for a report on the status of these discussions?
As regards the relationship between AML/CFT assessments and FSAPs and FSAP updates, which option would Directors favor going forward?
Do Directors agree with the framework outlined above for assessing the systemic risks of AML/CFT issues? Does it provide a useful basis for deciding on how these issues should be integrated into modular financial stability assessments and bilateral surveillance under Article IV?
Annex 1. Jurisdictions ‘ Compliance with the AML/CFT Standard1
1. The International Standard for anti-money laundering and combating the financing of terrorism (AML/CFT) is particularly rigorous and detailed. Established by the Financial Action Task Force (FATF) in 1990, the standard has been updated several times and now consists of 40 Recommendations respecting money laundering and 9 Special Recommendations for combating terrorist financing (the FATF 40+9). To assess a country’s compliance with the FATF 40+9, a team of 4–5 assessors will typically take two weeks on-site to evaluate over 285 essential criteria and judge not only if the legal and regulatory system conforms to the standard, but also if it is being effectively implemented. Each recommendation is rated on a four point scale from noncompliant to partially compliant to largely compliant to (fully) compliant. The methodology stipulates that a rating of compliant shall only be given if all essential criteria are fully met.
2. Assessed countries’ compliance with the FATF Forty Recommendations—the FATF 40+9—is low. Applying a scale under which a score of 49 represents full compliance with each of the FATF 40+9,2 the average compliance score for the 161 countries assessed using the current methodology from 2004 to 2011 was 20.8 or 42.5 percent. Full compliance on any FATF Recommendation was rare, occurring in only 12.3 percent of the almost 7,889 observations in this dataset.3 Countries achieved the second highest score, largely compliant, 25.5 percent of the time, partially compliant, 35.6 percent of the time, and noncompliant 24.9 percent of the time.4 The scores reflect the levels of compliance at the time these countries were assessed and do not take into account any progress made in addressing deficiencies since then.
3. Different elements of the standard pertain to different components of a country’s AML/CFT regimes. For example, some are concerned with the provisions of the criminal code, others with the strength of customer due diligence (CDD) in financial institutions, others with the powers of the supervisory authorities, and yet others with the work of law enforcement and associated institutions. See Table 1 on jurisdictions’ compliance with the various groups of recommendations. Analyzing patterns of compliance by recommendation and by groups of recommendations can yield some preliminary insights into the strengths and weaknesses of AML/CFT regimes. Econometric analysis of the relationships between compliance and other independent variables permits some observations about the determinants of compliance.
Jurisdictions’ Compliance with Groupings of AML/CFT Recommendations Advanced Economies
Jurisdictions’ Compliance with Groupings of AML/CFT Recommendations Advanced Economies
| Country | Year of Assessment | Legal | Institutional | Preventing Financial Institutions | Preventing DNFBPs | Preventing Informal Sector | Entity Transparency | International Cooperation | AML | CFT | Total AML/CFT |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Andorra | 2007 | 2.33 | 4 | 7.33 | 1 | 0.33 | 1.33 | 4 | 18.33 | 2 | 20.33 |
| Austria | 2008 | 2.64 | 4.64 | 12.58 | 0.99 | 0.99 | 0.99 | 3.63 | 22.16 | 4.3 | 26.46 |
| Australia | 2005 | 4.33 | 5 | 7 | 0.33 | 1.33 | 1.33 | 6.33 | 21.33 | 4.33 | 25.67 |
| Belgium | 2005 | 4.67 | 5.33 | 17.67 | 1.33 | 1 | 2.33 | 5 | 31 | 6.33 | 37.33 |
| Bermuda | 2007 | 3 | 3.67 | 5.67 | 0 | 1 | 2.33 | 5.33 | 17.67 | 3.33 | 2 |
| British Virgin | 2008 | 4.67 | 5.67 | 11.67 | 1 | 2 | 1.33 | 6.67 | 26.67 | 6.33 | 33 |
| Canada | 2007 | 4 | 4.33 | 8.67 | 0 | 2 | 1 | 5 | 20 | 5 | 25 |
| Cayman Island | 2007 | 4.33 | 5.33 | 12.67 | 1.33 | 1.33 | 2.33 | 6 | 28.33 | 5 | 33.33 |
| Cyprus | 2005 | 4.33 | 5.67 | 14.67 | 1 | 1.67 | 1.67 | 6 | 29 | 6 | 35 |
| Czech Republ | 2005 | 1.98 | 5.31 | 9.92 | 0.33 | 132 | 1.33 | 4.63 | 20.53 | 4.29 | 24.82 |
| Denmark | 2006 | 3 | 4.67 | 8.67 | 0.33 | 1.33 | 1.33 | 5 | 20 | 4.33 | 24.33 |
| Estonia | 2008 | 3.33 | 5.67 | 12.67 | 1 | 1.33 | 2 | 5 | 26.67 | 4.33 | 3 |
| Finland | 2007 | 3 | 4 | 9.33 | 0.33 | 1.33 | 1.67 | 4.67 | 20.33 | 4 | 24.33 |
| France | 2010 | 3.67 | 4.33 | 14.33 | 0.67 | 1.67 | 2 | 5 | 25.33 | 6.33 | 31.67 |
| Germany | 2009 | 3 | 4.33 | 12 | 0 | 1.67 | 0.67 | 4.33 | 20.67 | 5.33 | 26 |
| Gibraltar | 2006 | 4 | 5 | 13.33 | 1 | 1 | 2 | 4.33 | 25.67 | 5 | 30.67 |
| Greece | 2006 | 2 | 2.33 | 7.33 | 0 | 0.67 | 1 | 4 | 14.67 | 2.67 | 17.33 |
| Guernsey | 2010 | 4.33 | 6 | 19 | 1.67 | 1.67 | 2 | 5.67 | 33.67 | 6.67 | 40.33 |
| Hong Kong Ch | 2007 | 3 | 5.33 | 12.67 | 0 | 0.67 | 1.33 | 5.33 | 24.67 | 3.67 | 28.33 |
| Iceland | 2006 | 2.67 | 4 | 10.33 | 0.67 | 1.33 | 1.33 | 4 | 21.67 | 2.67 | 24.33 |
| Ireland | 2005 | 3.67 | 5 | 11 | 0.67 | 1.33 | 1 | 6.67 | 25 | 4.33 | 29.33 |
| Isle of Man | 2008 | 2.64 | 5.3 | 15.25 | 0.99 | 132 | 1.98 | 4.65 | 27.51 | 4.62 | 32.13 |
| Israel | 2007 | 4 | 5.67 | 11.67 | 0 | 1 | 1.33 | 5.67 | 24 | 5.33 | 29.33 |
| Italy | 2005 | 4 | 5.33 | 10.67 | 0 | 2 | 2.33 | 6.33 | 24.67 | 6 | 30.67 |
| Japan | 2008 | 3 | 5 | 9.67 | 0.67 | 1 | 0.33 | 3 | 19.33 | 3.33 | 22.67 |
| Jersey | 2008 | 4.3 | 5.64 | 15.25 | 132 | 1.66 | 2.66 | 5.3 | 29.85 | 6.28 | 36.13 |
| Korea | 2008 | 1.67 | 3.67 | 8 | 0 | 1.67 | 0.33 | 4.67 | 17.33 | 2.67 | 20 |
| Liechtenstein | 2007 | 2.67 | 5.33 | 10.33 | 1.33 | 1 | 1 | 3.33 | 22.33 | 2.67 | 25 |
| Luxembourg | 2009 | 2 | 3.33 | 6.33 | 0 | 0.33 | 0.67 | 4.33 | 14.67 | 2.33 | 17 |
| Macau, SAR | 2006 | 3.33 | 4 | 13.33 | 1.33 | 1 | 1.33 | 2.67 | 23 | 4 | 27 |
| Malta | 2005 | 4 | 5.67 | 12.67 | 1.33 | 1.33 | 2 | 6.67 | 28.67 | 5 | 33.67 |
| Monaco | 2006 | 2.67 | 4.33 | 10 | 0.33 | 1.33 | 1.33 | 3 | 18.67 | 4.33 | 23 |
| Netherlands | 2010 | 3.33 | 4.67 | 12.33 | 1 | 1.67 | 1.33 | 3 | 22 | 5.33 | 27.33 |
| New Zealand | 2009 | 4.33 | 4.67 | 5.67 | 0 | 1.33 | 0.33 | 5 | 17 | 4.33 | 21.33 |
| Norway | 2005 | 4 | 4.33 | 13.33 | 1.67 | 1.33 | 1.67 | 4.67 | 27.67 | 3.33 | 31 |
| Portugal | 2006 | 3.33 | 4.67 | 14 | 1 | 1.67 | 1.33 | 6.67 | 28 | 4.67 | 32.67 |
| San Marino | 2007 | 2.33 | 2.67 | 4 | 0 | 0.67 | 0.33 | 3 | 11.67 | 1.33 | 13 |
| Singapore | 2007 | 3.67 | 5.67 | 15.67 | 0.33 | 1.33 | 1.33 | 5.67 | 27.33 | 6.33 | 33.67 |
| Slovakia | 2005 | 2 | 3.33 | 6.33 | 0.33 | 0.67 | 1.33 | 3.67 | 15.33 | 2.33 | 17.67 |
| Slovenia | 2005 | 4.67 | 5.33 | 13.67 | 1.33 | 1.67 | 2.33 | 6.33 | 29 | 6.33 | 35.33 |
| Spain | 2005 | 3.67 | 3.67 | 13.33 | 0.67 | 1.33 | 2 | 6 | 25 | 5.67 | 30.67 |
| Sweden | 2005 | 3.67 | 4.33 | 10 | 0.67 | 1 | 1.67 | 5.67 | 23.33 | 3.67 | 27 |
| Switzerland | 2005 | 4 | 5 | 12.33 | 1.33 | 0.67 | 1.67 | 5.33 | 26 | 4.33 | 30.33 |
| Taiwan, POC | 2007 | 1.33 | 5.33 | 11.33 | 0 | 0.33 | 1.33 | 3.67 | 21 | 2.33 | 23.33 |
| UK | 2006 | 6 | 5.67 | 12.67 | 1.33 | 1.67 | 1.33 | 6.67 | 28 | 7.33 | 35.33 |
| USA | 2005 | 4.67 | 5.67 | 15.33 | 0.33 | 2 | 1 | 5.33 | 27.33 | 7 | 34.33 |
| No. of Recommendations | 6.0 | 7.0 | 21.0 | 3.0 | 2.0 | 3.0 | 7.0 | 40.0 | 9.0 | 49.0 | |
| Total countries | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | |
| Theoretical Compliance | 276.0 | 322.0 | 966.0 | 138.0 | 92.0 | 138.0 | 322.0 | 1840.0 | 414.0 | 2254.0 | |
| Real Compliance | 157.2 | 217.9 | 521.7 | 30.9 | 58.0 | 66.6 | 226.9 | 1072.1 | 207.1 | 1279.2 | |
| Degree of Compliance | 57.0 | 67.7 | 54.0 | 22.4 | 63.0 | 48.2 | 70.5 | 58.3 | 50.0 | 56.8 | |
| Average Compliance | 3.4 | 4.7 | 11.3 | 0.7 | 1.3 | 1.4 | 4.9 | 23.3 | 4.5 | 27.8 | |
Jurisdictions’ Compliance with Groupings of AML/CFT Recommendations Advanced Economies
| Country | Year of Assessment | Legal | Institutional | Preventing Financial Institutions | Preventing DNFBPs | Preventing Informal Sector | Entity Transparency | International Cooperation | AML | CFT | Total AML/CFT |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Andorra | 2007 | 2.33 | 4 | 7.33 | 1 | 0.33 | 1.33 | 4 | 18.33 | 2 | 20.33 |
| Austria | 2008 | 2.64 | 4.64 | 12.58 | 0.99 | 0.99 | 0.99 | 3.63 | 22.16 | 4.3 | 26.46 |
| Australia | 2005 | 4.33 | 5 | 7 | 0.33 | 1.33 | 1.33 | 6.33 | 21.33 | 4.33 | 25.67 |
| Belgium | 2005 | 4.67 | 5.33 | 17.67 | 1.33 | 1 | 2.33 | 5 | 31 | 6.33 | 37.33 |
| Bermuda | 2007 | 3 | 3.67 | 5.67 | 0 | 1 | 2.33 | 5.33 | 17.67 | 3.33 | 2 |
| British Virgin | 2008 | 4.67 | 5.67 | 11.67 | 1 | 2 | 1.33 | 6.67 | 26.67 | 6.33 | 33 |
| Canada | 2007 | 4 | 4.33 | 8.67 | 0 | 2 | 1 | 5 | 20 | 5 | 25 |
| Cayman Island | 2007 | 4.33 | 5.33 | 12.67 | 1.33 | 1.33 | 2.33 | 6 | 28.33 | 5 | 33.33 |
| Cyprus | 2005 | 4.33 | 5.67 | 14.67 | 1 | 1.67 | 1.67 | 6 | 29 | 6 | 35 |
| Czech Republ | 2005 | 1.98 | 5.31 | 9.92 | 0.33 | 132 | 1.33 | 4.63 | 20.53 | 4.29 | 24.82 |
| Denmark | 2006 | 3 | 4.67 | 8.67 | 0.33 | 1.33 | 1.33 | 5 | 20 | 4.33 | 24.33 |
| Estonia | 2008 | 3.33 | 5.67 | 12.67 | 1 | 1.33 | 2 | 5 | 26.67 | 4.33 | 3 |
| Finland | 2007 | 3 | 4 | 9.33 | 0.33 | 1.33 | 1.67 | 4.67 | 20.33 | 4 | 24.33 |
| France | 2010 | 3.67 | 4.33 | 14.33 | 0.67 | 1.67 | 2 | 5 | 25.33 | 6.33 | 31.67 |
| Germany | 2009 | 3 | 4.33 | 12 | 0 | 1.67 | 0.67 | 4.33 | 20.67 | 5.33 | 26 |
| Gibraltar | 2006 | 4 | 5 | 13.33 | 1 | 1 | 2 | 4.33 | 25.67 | 5 | 30.67 |
| Greece | 2006 | 2 | 2.33 | 7.33 | 0 | 0.67 | 1 | 4 | 14.67 | 2.67 | 17.33 |
| Guernsey | 2010 | 4.33 | 6 | 19 | 1.67 | 1.67 | 2 | 5.67 | 33.67 | 6.67 | 40.33 |
| Hong Kong Ch | 2007 | 3 | 5.33 | 12.67 | 0 | 0.67 | 1.33 | 5.33 | 24.67 | 3.67 | 28.33 |
| Iceland | 2006 | 2.67 | 4 | 10.33 | 0.67 | 1.33 | 1.33 | 4 | 21.67 | 2.67 | 24.33 |
| Ireland | 2005 | 3.67 | 5 | 11 | 0.67 | 1.33 | 1 | 6.67 | 25 | 4.33 | 29.33 |
| Isle of Man | 2008 | 2.64 | 5.3 | 15.25 | 0.99 | 132 | 1.98 | 4.65 | 27.51 | 4.62 | 32.13 |
| Israel | 2007 | 4 | 5.67 | 11.67 | 0 | 1 | 1.33 | 5.67 | 24 | 5.33 | 29.33 |
| Italy | 2005 | 4 | 5.33 | 10.67 | 0 | 2 | 2.33 | 6.33 | 24.67 | 6 | 30.67 |
| Japan | 2008 | 3 | 5 | 9.67 | 0.67 | 1 | 0.33 | 3 | 19.33 | 3.33 | 22.67 |
| Jersey | 2008 | 4.3 | 5.64 | 15.25 | 132 | 1.66 | 2.66 | 5.3 | 29.85 | 6.28 | 36.13 |
| Korea | 2008 | 1.67 | 3.67 | 8 | 0 | 1.67 | 0.33 | 4.67 | 17.33 | 2.67 | 20 |
| Liechtenstein | 2007 | 2.67 | 5.33 | 10.33 | 1.33 | 1 | 1 | 3.33 | 22.33 | 2.67 | 25 |
| Luxembourg | 2009 | 2 | 3.33 | 6.33 | 0 | 0.33 | 0.67 | 4.33 | 14.67 | 2.33 | 17 |
| Macau, SAR | 2006 | 3.33 | 4 | 13.33 | 1.33 | 1 | 1.33 | 2.67 | 23 | 4 | 27 |
| Malta | 2005 | 4 | 5.67 | 12.67 | 1.33 | 1.33 | 2 | 6.67 | 28.67 | 5 | 33.67 |
| Monaco | 2006 | 2.67 | 4.33 | 10 | 0.33 | 1.33 | 1.33 | 3 | 18.67 | 4.33 | 23 |
| Netherlands | 2010 | 3.33 | 4.67 | 12.33 | 1 | 1.67 | 1.33 | 3 | 22 | 5.33 | 27.33 |
| New Zealand | 2009 | 4.33 | 4.67 | 5.67 | 0 | 1.33 | 0.33 | 5 | 17 | 4.33 | 21.33 |
| Norway | 2005 | 4 | 4.33 | 13.33 | 1.67 | 1.33 | 1.67 | 4.67 | 27.67 | 3.33 | 31 |
| Portugal | 2006 | 3.33 | 4.67 | 14 | 1 | 1.67 | 1.33 | 6.67 | 28 | 4.67 | 32.67 |
| San Marino | 2007 | 2.33 | 2.67 | 4 | 0 | 0.67 | 0.33 | 3 | 11.67 | 1.33 | 13 |
| Singapore | 2007 | 3.67 | 5.67 | 15.67 | 0.33 | 1.33 | 1.33 | 5.67 | 27.33 | 6.33 | 33.67 |
| Slovakia | 2005 | 2 | 3.33 | 6.33 | 0.33 | 0.67 | 1.33 | 3.67 | 15.33 | 2.33 | 17.67 |
| Slovenia | 2005 | 4.67 | 5.33 | 13.67 | 1.33 | 1.67 | 2.33 | 6.33 | 29 | 6.33 | 35.33 |
| Spain | 2005 | 3.67 | 3.67 | 13.33 | 0.67 | 1.33 | 2 | 6 | 25 | 5.67 | 30.67 |
| Sweden | 2005 | 3.67 | 4.33 | 10 | 0.67 | 1 | 1.67 | 5.67 | 23.33 | 3.67 | 27 |
| Switzerland | 2005 | 4 | 5 | 12.33 | 1.33 | 0.67 | 1.67 | 5.33 | 26 | 4.33 | 30.33 |
| Taiwan, POC | 2007 | 1.33 | 5.33 | 11.33 | 0 | 0.33 | 1.33 | 3.67 | 21 | 2.33 | 23.33 |
| UK | 2006 | 6 | 5.67 | 12.67 | 1.33 | 1.67 | 1.33 | 6.67 | 28 | 7.33 | 35.33 |
| USA | 2005 | 4.67 | 5.67 | 15.33 | 0.33 | 2 | 1 | 5.33 | 27.33 | 7 | 34.33 |
| No. of Recommendations | 6.0 | 7.0 | 21.0 | 3.0 | 2.0 | 3.0 | 7.0 | 40.0 | 9.0 | 49.0 | |
| Total countries | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | 46.0 | |
| Theoretical Compliance | 276.0 | 322.0 | 966.0 | 138.0 | 92.0 | 138.0 | 322.0 | 1840.0 | 414.0 | 2254.0 | |
| Real Compliance | 157.2 | 217.9 | 521.7 | 30.9 | 58.0 | 66.6 | 226.9 | 1072.1 | 207.1 | 1279.2 | |
| Degree of Compliance | 57.0 | 67.7 | 54.0 | 22.4 | 63.0 | 48.2 | 70.5 | 58.3 | 50.0 | 56.8 | |
| Average Compliance | 3.4 | 4.7 | 11.3 | 0.7 | 1.3 | 1.4 | 4.9 | 23.3 | 4.5 | 27.8 | |
4. One clear conclusion is that elements of the standard that have been in place longer have higher compliance ratings, for example:
i. The AML Recommendations, which have been in place since 1990, were more highly rated than the CFT Special Recommendations which were introduced in October 2001.5 The degree of compliance6 for the 40 AML Recommendations was 45 percent and 31.5 percent for the 9 Special Recommendations on CFT.
ii. Recommendations concerning designated nonfinancial businesses and professions, which were made subject to the standard only in 2003, have had some of the lowest compliance scores, averaging only 12.1 percent of the theoretical maximum.
5. It also appears to be easier to enact legislation and set up government institutions than to ensure that the system functions well on an ongoing basis.
i. The degree of compliance for those Recommendations evaluating the criminalization of ML and TF were relatively high at 45.1 percent, and a somewhat broader measure of the strength of the legal system was 41.4 percent.
ii. The Recommendations that assess the strength of AML/CFT institutions (financial intelligence units (FIU), the specialized supervisory bodies, the police, and the judiciary) show a degree of compliance at 50.6 percent.
iii. Compliance with the Recommendations that assess the strength of preventive measures in the financial institutions was lower at 40.1 percent, and, as noted above, compliance was much lower for designated nonfinancial businesses and professions.
iv. One particular weakness in system functionality was indicated by the significantly low compliance (22.1 percent of the theoretical maximum) that all countries received on Recommendation 5 which concerns customer due diligence measures in financial institutions.
6. Countries were also relatively strong in the area of international cooperation, showing a degree of compliance at 56.3 percent on applicable Recommendations.
7. Compliance with the Recommendations that call on countries to have adequate transparency of legal persons and arrangements is relatively high at 40.1 percent.
8. The analysis of compliance7 as a function of macroeconomic, institutional, and financial variables reflects the following findings:
i. A higher degree of compliance appears to be associated with a higher level of economic development. In the 46 advanced economies in our sample, the degree of compliance with the AML/CFT is 56.8 percent, whereas, in the 115 emerging economies in our sample, the degree of compliance was lower (37 percent), indicating that wealthy countries have more resources to devote to constructing and implementing complex AML/CFT systems. GDP per capita expressed in PPP, used as a proxy for overall financial and economic development, is a significant explanatory variable of compliance, and the parameter estimates have the expected positive sign. However, a somewhat more direct measure of financial sector development, M2/GDP, was not statistically significant to explain compliance.
ii. Stronger domestic governance8 is associated with higher compliance with the AML/CFT standard. A better regulatory quality framework is estimated to have a positive and statistically significant impact on the country’s compliance with the AML/CFT standard. Also, countries with a low level of control over corruption tend to have lower compliance scores, and the parameter estimates have the expected negative sign.
iii. Jurisdictions with high net interest margins9 show lesser overall compliance with the AML/CFT regime. An increase in net interest margin is estimated to have a negative and statistically significant impact on a country’s compliance with the AML/CFT standard, indicating that more competitive banking systems tend to have higher levels of AML/CFT compliance.
iv. However, compliance levels do not correlate with a country’s involvement in the global drug economy, which can be seen as a rough proxy for ML/TF risk.10 In other words, there are countries with high levels of AML/CFT compliance and low levels of involvement in the drug trade and countries with high AML/CFT compliance and that contribute a great deal to the global drug problem. Similarly, low compliance countries are randomly distributed over the UNODC index. While these results could be explained by any number of hypotheses,11 they do at least raise the question of whether focusing on AML/CFT compliance ensures progress toward mitigating real ML/TF risk.
9. As set forth in Annex 3, Fund staff has been working with the FATF to better understand ML and TF risks on the basis of analyzing threat, vulnerability, and consequence. In this connection, future research should include the development of different, broader metrics for analyzing the level of ML/TF risks and the level of criminal activity in a given jurisdiction as well as better methods of capturing and presenting cross-border flows.
10. In this regard, Fund staff have analyzed the relationship between Fund staff’s ranking of jurisdictions’ compliance with the AML/CFT standard (2004–2011)—as a measure of financial sector vulnerability—and staff’s ranking on systemically-important financial sectors (2008). Figures 1 and 2 present that relationship. The negative relationship indicates that, in general, smaller, less-connected financial systems are also less compliant with the standard, which is consistent with the rest of the analysis. Looking more closely at the scatter plot, however, helps identify those relatively large and interconnected financial systems that are also relatively vulnerable to money laundering based on their low compliance with the standard. This, in turn, can provide a basis for prioritizing the TA and surveillance agenda of the Fund in the area of AML/CFT.
Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT International Standard
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis”. Forthcoming Working Paper and Table 1 of this annex.2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.
Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT International Standard
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis”. Forthcoming Working Paper and Table 1 of this annex.2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT International Standard
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis”. Forthcoming Working Paper and Table 1 of this annex.2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.
Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT Recommendations on Preventing Financial Institutions from ML/TF
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis.” Forthcoming Working Paper and Table 1 of this annex2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.
Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT Recommendations on Preventing Financial Institutions from ML/TF
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis.” Forthcoming Working Paper and Table 1 of this annex2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.Relationship between Jurisdictions with Systemically Important Financial Sectors and Compliance with the AML/CFT Recommendations on Preventing Financial Institutions from ML/TF
Citation: Policy Papers 2011, 092; 10.5089/9781498338875.007.A001
Source: Staff calculations based on:1. Verdugo, Concepcion, “Compliance with the AML/CFT International Standard: Lessons from a Cross-Country Analysis.” Forthcoming Working Paper and Table 1 of this annex2. Stability Assessments under the Financial Sector Assessment Program into Article IV Surveillance; IMF Policy Paper; August 27, 2010.Note that the ranking might change over time (Staff used 2008 data for the paper) when data on size and interconnectedness are updated and/or methodology gets revisited.Note: The following countries, among the 33 jurisdictions identified by the ICRG as having AML/CFT deficiencies, are not included in this chart due to the fact that there was no assessment conducted during the period of 2004–2011: Angola, The Democratic Popular Republic of Korea, Ethiopia, Iran, Kenya, Sao Tome and Principe, and Turkmenistan.11. These pictures, therefore, contribute to the Fund’s analysis of risk, although, of course, they are only a point of departure. A more complete analysis would require both a better proxy for systemic vulnerability than can be provided by compliance scores and other variables which add to the threat dimension. In general, work remains to be done in testing the relationship of compliance to ML/TF risks and on measuring the effectiveness of AML/CFT regimes. Continued work in these directions could open the door to a more nuanced understanding of where the ML/TF-related threats to the international financial system lie than can be derived from simple comparisons of countries’ ratings on their AML/CFT assessments.
Emerging and Developing Economies
Emerging and Developing Economies
| Country | Year of Assessment | Legal | Institutional | Preventing Financial Institutions | Preventing DNFBPs | Preventing Informal Sector | Entity Transparency | International Cooperation | AML | CFT | Total AML/CFT |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Albania | 2011 | 2.67 | 3 | 9 | 1 | 0.67 | 1.33 | 3.67 | 18.67 | 2.67 | 21.33 |
| Anguilla | 2009 | 4 | 4.33 | 11.33 | 1 | 0.33 | 1.67 | 6 | 24.67 | 4 | 28.67 |
| Antigua & Bar | 2007 | 2.33 | 3.67 | 3 | 0.33 | 1.33 | 0.33 | 5.67 | 15 | 1.67 | 16.67 |
| Argentina | 2009 | 1.67 | 1.67 | 4.67 | 0 | 0.67 | 0 | 2.67 | 9.67 | 1.67 | 11.33 |
| Armenia | 2009 | 2.67 | 3.33 | 13.67 | 0.33 | 0.67 | 1.67 | 3.67 | 22.67 | 3.33 | 26 |
| Aruba | 2008 | 1.65 | 1.65 | 4.97 | 0 | 0.66 | 1 | 2.98 | 12.58 | 0.33 | 12.91 |
| Azerbaijan | 2008 | 1.33 | 2 | 5 | 0 | 0.67 | 1.33 | 3.33 | 11.67 | 2 | 13.67 |
| Bahamas | 2006 | 3.67 | 5 | 9 | 1 | 1.33 | 1.67 | 5.33 | 22.67 | 4.33 | 27 |
| Bahrain | 2005 | 2 | 4 | 12 | 0.67 | 0.33 | 2 | 5 | 22 | 4 | 26 |
| Bangladesh | 2008 | 1.65 | 2.31 | 6.28 | 0 | 0.99 | 0.33 | 2.31 | 11.89 | 1.98 | 13.87 |
| Barbados | 2006 | 3.33 | 5.33 | 8.67 | 0 | 1.67 | 1.33 | 4.33 | 20.33 | 4.33 | 24.67 |
| Belarus | 2008 | 3.33 | 3.67 | 9 | 0.33 | 1 | 2.33 | 4.33 | 20.67 | 3.33 | 24 |
| Benin | 2009 | 1.67 | 2.33 | 4.33 | 0 | 0 | 1 | 3 | 12.33 | 0 | 12.33 |
| Bolivia | 2006 | 2 | 2 | 5.33 | 0 | 0 | 0.33 | 3 | 12.33 | 0.33 | 12.67 |
| Bosnia and Herzego | 2009 | 2 | 2.33 | 8.67 | 0 | 0.67 | 1.33 | 4.33 | 16.67 | 2.67 | 19.33 |
| Botswana | 2007 | 1 | 2.33 | 5.67 | 0 | 0.33 | 0 | 3 | 12.33 | 0 | 12.33 |
| Brazil | 2009 | 1 | 3.67 | 13 | 0 | 1 | 1.33 | 4.33 | 21.67 | 2.67 | 24.33 |
| Brunei | 2010 | 2 | 2.33 | 5.33 | 0 | 0.33 | 1 | 3.67 | 12.33 | 2.33 | 14.67 |
| Bulgaria | 2007 | 3.67 | 5.33 | 12.67 | 1 | 1.33 | 2 | 6.33 | 26.67 | 5.67 | 32.33 |
| Burkina Faso | 2009 | 1.32 | 1.32 | 1.98 | 0 | 0 | 1 | 2.97 | 8.59 | 0 | 8.59 |
| Cambodia | 2007 | 0 | 1 | 3.33 | 0.33 | 0 | 1.67 | 1 | 7 | 0.33 | 7.33 |
| Cape Verde | 2007 | 1.67 | 1.67 | 1.67 | 0 | 0.33 | 1.67 | 1.67 | 8.33 | 0.33 | 8.67 |
| Chile | 2010 | 2.97 | 4.96 | 11.25 | 0.66 | 0.99 | 0.33 | 4.31 | 23.16 | 2.31 | 25.47 |
| China | 2006 | 2 | 5 | 9.33 | 0 | 1.33 | 1 | 5.33 | 20.33 | 3.67 | 24 |
| Colombia | 2008 | 4.33 | 6 | 15.33 | 1 | 1.67 | 1.33 | 6 | 30.33 | 5.33 | 35.67 |
| Comoros | 2009 | 1.67 | 1.67 | 2 | 0 | 0.33 | 0 | 2.33 | 7 | 1 | 8 |
| Cook Islands | 2009 | 1.33 | 1.33 | 2 | 0 | 0 | 1 | 3 | 8.67 | 0 | 8.67 |
| Costa Rica | 2006 | 1.33 | 3.67 | 6.33 | 0 | 0 | 0.33 | 3 | 13.67 | 1 | 14.67 |
| Croatia | 2006 | 2 | 5 | 6 | 0 | 0.67 | 1.33 | 4 | 17.33 | 1.67 | 19 |
| Djibouti | 2007 | ||||||||||
| Dominica | 2008 | 2.31 | 1.65 | 3.31 | 0 | 0.66 | 0.33 | 3.97 | 10.58 | 1.65 | 12.23 |
| Dominican Republic | 2005 | 1.33 | 2.67 | 7.33 | 0 | 1 | 0.33 | 2.67 | 13.33 | 2 | 15.33 |
| Ecuador | 2005 | 1 | 2.33 | 2.33 | 0 | 0 | 0.67 | 1.67 | 8 | 0 | 8 |
| Egypt | 2008 | 3 | 4.33 | 10.33 | 0.67 | 1 | 2.33 | 5 | 22.33 | 4.33 | 26.67 |
| El Salvador | 2009 | 4.67 | 3 | 9.67 | 0 | 1.33 | 1.33 | 4.67 | 20.33 | 4.33 | 24.67 |
| Fiji | 2006 | 2 | 3.67 | 10 | 1 | 1.33 | 1 | 3.67 | 20.33 | 2.33 | 22.67 |
| Gambia | 2008 | 3 | 1.67 | 7 | 0 | 0 | 1 | 3 | 13.33 | 2.33 | 15.67 |
| Georgia | 2006 | 2 | 4 | 6.67 | 0.67 | 0.67 | 1.67 | 4.33 | 18 | 2 | 20 |
| Ghana | 2008 | 1.65 | 2.31 | 4.63 | 0 | 0.33 | 0.33 | 2.31 | 9.58 | 1.98 | 11.56 |
| Grenada | 2008 | 1.98 | 3.63 | 2.98 | 0 | 0.33 | 0 | 4.98 | 13.24 | 0.66 | 13.9 |
| Guatemala | 2009 | 3 | 3.67 | 13.33 | 0 | 1.33 | 1 | 5 | 22.67 | 4.67 | 27.33 |
| Guinea Bissau | 2008 | 1.32 | 1 | 2.31 | 0 | 0.33 | 1 | 2.31 | 7.94 | 0.33 | 8.27 |
| Haiti | 2007 | 0.67 | 1.67 | 4 | 0 | 0.33 | 1 | 2.33 | 9.67 | 0.33 | 10 |
| Honduras | 2007 | 2.64 | 2.65 | 6.65 | 0 | 0.33 | 0 | 2.64 | 12.59 | 2.32 | 14.91 |
| Hungary | 2010 | 3 | 5.33 | 17.33 | 1.67 | 1.33 | 2 | 5.33 | 31.67 | 4.33 | 36 |
| India | 2009 | 2.67 | 5 | 13 | 0 | 1 | 0.67 | 4.33 | 22.67 | 4 | 26.67 |
| Indonesia | 2007 | 1.33 | 3.33 | 7.67 | 0 | 1.33 | 1 | 3 | 16.33 | 1.33 | 17.67 |
| Jamaica | 2005 | 4 | 4.67 | 11 | 0 | 1 | 1.67 | 4 | 21.33 | 5 | 26.33 |
| Jordan | 2008 | 1.67 | 3.33 | 9.33 | 0.33 | 0 | 1.67 | 2.67 | 17.67 | 1.33 | 19 |
| Kyrgyz Repub | 2007 | 0.67 | 3 | 9.33 | 0 | 1.33 | 1.33 | 3.33 | 17.67 | 1.33 | 19 |
| Latvia | 2006 | 3.67 | 5.33 | 10.67 | 0.67 | 1 | 2 | 5 | 25 | 3.33 | 28.33 |
| Lebanon | 2009 | 3.67 | 3.67 | 13 | 1 | 1 | 1 | 4.67 | 23 | 5 | 28 |
| Lithuania | 2006 | 2.67 | 4.67 | 13 | 1 | 1.33 | 1.67 | 5.67 | 26 | 4 | 30 |
| Macedonia | 2007 | 2.33 | 3.67 | 6.33 | 0 | 1 | 1.33 | 3.67 | 16.33 | 2 | 18.33 |
| Malawi | 2008 | 2.67 | 2.67 | 9.67 | 0 | 1 | 0.67 | 4 | 18 | 2.67 | 20.67 |
| Malaysia | 2007 | 3.67 | 5 | 14 | 1 | 1 | 1 | 4.33 | 25.67 | 4.33 | 30 |
| Mali | 2008 | 1.33 | 0.67 | 1.67 | 0 | 0 | 1 | 1.67 | 6 | 0.33 | 6.33 |
| Mauritania | 2005 | 1.67 | 2 | 5.67 | 0 | 0.67 | 1.67 | 4 | 12.67 | 3 | 15.67 |
| Mauritius | 2007 | 2.33 | 3.67 | 10.33 | 0.33 | 1.33 | 1.33 | 4.33 | 21 | 2.67 | 23.67 |
| Mexico | 2008 | 2.33 | 4.33 | 12.33 | 0 | 0.33 | 1 | 4.33 | 22 | 2.67 | 24.67 |
| Moldova | 2005 | 2 | 3 | 6.33 | 0 | 1 | 1.67 | 4.33 | 15.67 | 2.67 | 18.33 |
| Mongolia | 2006 | 1 | 2.33 | 6 | 0 | 1.33 | 1 | 3.67 | 14.33 | 1 | 15.33 |
| Montenegro | 2008 | 2.67 | 5 | 12 | 0.67 | 1 | 1.33 | 5 | 25 | 2.67 | 27.67 |
| Morocco | 2007 | 2 | 1.33 | 4.67 | 0 | 0 | 1.67 | 4.33 | 12.33 | 1.67 | 14 |
| Myanmar | 2008 | 1.33 | 3 | 6 | 0.33 | 0.67 | 1.67 | 1.67 | 13.67 | 1 | 14.67 |
| Namibia | 2005 | 1 | 2 | 3.33 | 0 | 1 | 0.33 | 3 | 9.67 | 1 | 10.67 |
| Nepal | 2005 | ||||||||||
| Nicaragua | 2008 | 2.64 | 1.98 | 8.27 | 0 | 0.99 | 1.33 | 4.31 | 16.88 | 2.64 | 19.52 |
| Niger | 2008 | 1.32 | 1.33 | 2.64 | 0 | 0.33 | 1.33 | 3.97 | 10.26 | 0.66 | 10.92 |
| Nigeria | 2007 | 1.33 | 3.33 | 4.67 | 0.33 | 0.67 | 1 | 2.67 | 13.33 | 0.67 | 14 |
| Pakistan | 2009 | 0 | 1.67 | 2.33 | 0 | 1 | 0 | 1.67 | 6.67 | 0 | 6.67 |
| Palau | 2008 | 2.67 | 3 | 4.67 | 0 | 1.33 | 1 | 3.67 | 13.67 | 2.67 | 16.33 |
| Panama | 2005 | 4 | 5 | 15.33 | 1 | 1 | 1 | 5.67 | 27.67 | 5.33 | 33 |
| Paraguay | 2008 | 1 | 1.33 | 4 | 0 | 0 | 0 | 2 | 8.33 | 0 | 8.33 |
| Peru | 2008 | 3.67 | 5 | 9.67 | 1 | 1 | 2 | 5 | 23.67 | 3.67 | 27.33 |
| Philippines | 2008 | 1.65 | 2.97 | 9.6 | 0 | 0.99 | 1.32 | 3.97 | 18.52 | 1.98 | 20.5 |
| Poland | 2006 | 2.33 | 4.33 | 7.67 | 0.33 | 1.67 | 1.33 | 4 | 19.67 | 2 | 21.67 |
| Qatar | 2007 | 2 | 3.33 | 5.67 | 0.33 | 0.33 | 1.67 | 2.67 | 14.67 | 1.33 | 16 |
| Romania | 2007 | 3 | 5 | 9.33 | 0.33 | 1 | 2 | 5.67 | 23 | 3.33 | 26.33 |
| Russian Feder | 2007 | 4 | 4.67 | 9.67 | 1 | 1 | 1.67 | 5.67 | 24.33 | 3.33 | 27.67 |
| Rwanda | 2005 | ||||||||||
| Samoa | 2006 | 1.33 | 2.33 | 6 | 1 | 1 | 0.33 | 1.67 | 12.33 | 1.33 | 13.67 |
| Saudi Arabia | 2009 | 2.33 | 4.33 | 13 | 0 | 1.33 | 2 | 3.33 | 22.67 | 3.67 | 26.33 |
| Senegal | 2007 | 2.97 | 4.63 | 6.63 | 0.33 | 0.99 | 1.33 | 4.98 | 19.88 | 1.98 | 21.86 |
| Serbia | 2009 | 2.33 | 3.67 | 11 | 0.33 | 1 | 1.33 | 3.67 | 20.33 | 3 | 23.33 |
| Seychelles | 2006 | 1.98 | 1.32 | 5.63 | 0 | 0.33 | 0 | 2.64 | 10.25 | 1.65 | 11.9 |
| Sierra Leone | 2006 | 1 | 1 | 3.33 | 0 | 0.33 | 0.33 | 0.67 | 6.67 | 0 | 6.67 |
| Solomon Islan | 2009 | 3.33 | 4 | 9 | 0 | 0.33 | 0.33 | 4.33 | 18 | 3.33 | 21.33 |
| South Africa | 2008 | 4 | 4.67 | 8 | 0.67 | 1.33 | 0.67 | 5.33 | 20.33 | 4.33 | 24.67 |
| Sri Lanka | 2006 | 2 | 2.33 | 4.67 | 0 | 0.33 | 1 | 3.33 | 12 | 1.67 | 13.67 |
| St. Kitts & Nev | 2008 | 2.31 | 2.31 | 9.28 | 0.33 | 1 | 1.65 | 4.65 | 19.22 | 2.31 | 21.53 |
| St. Lucia | 2008 | 1.33 | 1.33 | 2 | 0 | 0.33 | 0.33 | 1.33 | 6.33 | 0.33 | 6.67 |
| St. Vincent & t | 2009 | 2.67 | 4.33 | 8.67 | 0 | 1 | 1 | 4.33 | 19.67 | 2.33 | 22 |
| Sudan | 2004 | 2 | 0.33 | 3.33 | 0 | 1 | 1.33 | 2.33 | 8.67 | 1.67 | 10.33 |
| Suriname | 2009 | 1.33 | 2.67 | 1.67 | 0 | 0.33 | 1 | 3 | 10 | 0 | 10 |
| Syria | 2006 | 2.33 | 3.33 | 9.33 | 0.67 | 0.67 | 1.67 | 3 | 19 | 2 | 21 |
| Tajiskitan | 2007 | 0.67 | 1.33 | 3 | 0 | 0 | 1 | 0 | 6 | 0 | 6 |
| Tanzania | 2009 | 0 | 1.67 | 2.33 | 0 | 1 | 0 | 1.67 | 6.67 | 0 | 6.67 |
| Thailand | 2007 | 2.67 | 2.67 | 5.67 | 0 | 0.33 | 1.33 | 2.67 | 13.33 | 2 | 15.33 |
| Tonga | 2009 | 1 | 3.33 | 5.33 | 0 | 0 | 0.33 | 2.33 | 11 | 1.33 | 12.33 |
| Trinidad and T | 2005 | 0.67 | 2.67 | 2 | 0 | 1.67 | 0.33 | 3 | 9.33 | 1 | 10.33 |
| Tunisia | 2006 | 3.33 | 4 | 8 | 0.67 | 1.33 | 2.67 | 4.33 | 20 | 4.33 | 24.33 |
| Turkey | 2006 | 2.67 | 3.33 | 6.33 | 0 | 1.67 | 1.67 | 3.67 | 16.33 | 3 | 19.33 |
| Turks & Caico | 2007 | 3 | 3.33 | 5.33 | 0 | 0.33 | 0.67 | 4 | 14 | 2.67 | 16.67 |
| UAE | 2007 | 3 | 4 | 7.33 | 0 | 0.33 | 2 | 4.33 | 18.33 | 2.67 | 21 |
| Uganda | 2005 | 0.67 | 0.67 | 3.67 | 0 | 0 | 0.33 | 1 | 5 | 1.33 | 6.33 |
| Ukraine | 2008 | 1.67 | 3.67 | 9.33 | 0 | 1 | 1.67 | 3.67 | 18.33 | 2.67 | 21 |
| Uruguay | 2009 | 4 | 6 | 12.33 | 0.67 | 1.33 | 1.67 | 5.67 | 26.67 | 5 | 31.67 |
| Uzbekistan | 2009 | 3.33 | 4.33 | 11.33 | 1 | 1.33 | 1.67 | 5 | 23.67 | 4.33 | 28 |
| Vanuatu | 2006 | 2.33 | 1.33 | 8.33 | 0 | 0.33 | 0.33 | 3.67 | 14 | 2.33 | 16.33 |
| Venezuela | 2008 | 2.31 | 2.98 | 8.94 | 0 | 0 | 0.33 | 4.97 | 17.55 | 1.98 | 19.53 |
| Vietnam | 2008 | 0.99 | 2.64 | 5.97 | 0 | 0.99 | 0.66 | 1.98 | 12.57 | 0.66 | 13.23 |
| Yemen | 2007 | 1 | 1.67 | 3.33 | 0.33 | 0.67 | 1.67 | 2 | 10.33 | 0.33 | 10.67 |
| Zambia | 2007 | 0.66 | 1.98 | 2.97 | 0 | 0 | 0.33 | 1.65 | 7.26 | 0.33 | 7.59 |
| Zimbawe | 2006 | 1 | 2.67 | 9 | 0.67 | 0.67 | 0.67 | 1.67 | 15.33 | 1 | 16.33 |
| No. of Recommendations | 6 | 7 | 21 | 3 | 2 | 3 | 7 | 40 | 9 | 49 | |
| Total countries | 115 | 115 | 115 | 115 | 115 | 115 | 115 | 115 | 115 | 115 | |
| Theoretical Compliance | 690 | 805 | 2415 | 345 | 230 | 345 | 805 | 4600 | 1035 | 5635 | |
| Real Compliance | 243.3 | 352.6 | 839.9 | 28.0 | 85.2 | 126.9 | 407.6 | 18332 | 250.3 | 2083.5 | |
| Degree of Compliance | 35.3 | 43.8 | 34.8 | 8.1 | 37.0 | 36.8 | 50.6 | 39.9 | 24.2 | 37.0 | |
| Average Compliance | 2.1 | 3.1 | 7.3 | 0.2 | 0.7 | 1.1 | 3.5 | 15.9 | 2.2 | 18.1 | |
Emerging and Developing Economies
| Country | Year of Assessment | Legal | Institutional | Preventing Financial Institutions | Preventing DNFBPs | Preventing Informal Sector | Entity Transparency | International Cooperation | AML | CFT | Total AML/CFT |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Albania | 2011 | 2.67 | 3 | 9 | 1 | 0.67 | 1.33 | 3.67 | 18.67 | 2.67 | 21.33 |
| Anguilla | 2009 | 4 | 4.33 | 11.33 | 1 | 0.33 | 1.67 | 6 | 24.67 | 4 | 28.67 |
| Antigua & Bar | 2007 | 2.33 | 3.67 | 3 | 0.33 | 1.33 | 0.33 | 5.67 | 15 | 1.67 | 16.67 |
| Argentina | 2009 | 1.67 | 1.67 | 4.67 | 0 | 0.67 | 0 | 2.67 | 9.67 | 1.67 | 11.33 |
| Armenia | 2009 | 2.67 | 3.33 | 13.67 | 0.33 | 0.67 | 1.67 | 3.67 | 22.67 | 3.33 | 26 |
| Aruba | 2008 | 1.65 | 1.65 | 4.97 | 0 | 0.66 | 1 | 2.98 | 12.58 | 0.33 | 12.91 |
| Azerbaijan | 2008 | 1.33 | 2 | 5 | 0 | 0.67 | 1.33 | 3.33 | 11.67 | 2 | 13.67 |
| Bahamas | 2006 | 3.67 | 5 | 9 | 1 | 1.33 | 1.67 | 5.33 | 22.67 | 4.33 | 27 |
| Bahrain | 2005 | 2 | 4 | 12 | 0.67 | 0.33 | 2 | 5 | 22 | 4 | 26 |
| Bangladesh | 2008 | 1.65 | 2.31 | 6.28 | 0 | 0.99 | 0.33 | 2.31 | 11.89 | 1.98 | 13.87 |
| Barbados | 2006 | 3.33 | 5.33 | 8.67 | 0 | 1.67 | 1.33 | 4.33 | 20.33 | 4.33 | 24.67 |
| Belarus | 2008 | 3.33 | 3.67 | 9 | 0.33 | 1 | 2.33 | 4.33 | 20.67 | 3.33 | 24 |
| Benin | 2009 | 1.67 | 2.33 | 4.33 | 0 | 0 | 1 | 3 | 12.33 | 0 | 12.33 |
| Bolivia | 2006 | 2 | 2 | 5.33 | 0 | 0 | 0.33 | 3 | 12.33 | 0.33 | 12.67 |
| Bosnia and Herzego | 2009 | 2 | 2.33 | 8.67 | 0 | 0.67 | 1.33 | 4.33 | 16.67 | 2.67 | 19.33 |
| Botswana | 2007 | 1 | 2.33 | 5.67 | 0 | 0.33 | 0 | 3 | 12.33 | 0 | 12.33 |
| Brazil | 2009 | 1 | 3.67 | 13 | 0 | 1 | 1.33 | 4.33 | 21.67 | 2.67 | 24.33 |
| Brunei | 2010 | 2 | 2.33 | 5.33 | 0 | 0.33 | 1 | 3.67 | 12.33 | 2.33 | 14.67 |
| Bulgaria | 2007 | 3.67 | 5.33 | 12.67 | 1 | 1.33 | 2 | 6.33 | 26.67 | 5.67 | 32.33 |
| Burkina Faso | 2009 | 1.32 | 1.32 | 1.98 | 0 | 0 | 1 | 2.97 | 8.59 | 0 | 8.59 |
| Cambodia | 2007 | 0 | 1 | 3.33 | 0.33 | 0 | 1.67 | 1 | 7 | 0.33 | 7.33 |
| Cape Verde | 2007 | 1.67 | 1.67 | 1.67 | 0 | 0.33 | 1.67 | 1.67 | 8.33 | 0.33 | 8.67 |
| Chile | 2010 | 2.97 | 4.96 | 11.25 | 0.66 | 0.99 | 0.33 | 4.31 | 23.16 | 2.31 | 25.47 |
| China | 2006 | 2 | 5 | 9.33 | 0 | 1.33 | 1 | 5.33 | 20.33 | 3.67 | 24 |
| Colombia | 2008 | 4.33 | 6 | 15.33 | 1 | 1.67 | 1.33 | 6 | 30.33 | 5.33 | 35.67 |
| Comoros | 2009 | 1.67 | 1.67 | 2 | 0 | 0.33 | 0 | 2.33 | 7 | 1 | 8 |
| Cook Islands | 2009 | 1.33 | 1.33 | 2 | 0 | 0 | 1 | 3 | 8.67 | 0 | 8.67 |
| Costa Rica | 2006 | 1.33 | 3.67 | 6.33 | 0 | 0 | 0.33 | 3 | 13.67 | 1 | 14.67 |
| Croatia | 2006 | 2 | 5 | 6 | 0 | 0.67 | 1.33 | 4 | 17.33 | 1.67 | 19 |
| Djibouti | 2007 | ||||||||||
| Dominica | 2008 | 2.31 | 1.65 | 3.31 | 0 | 0.66 | 0.33 | 3.97 | 10.58 | 1.65 | 12.23 |
| Dominican Republic | 2005 | 1.33 | 2.67 | 7.33 | 0 | 1 | 0.33 | 2.67 | 13.33 | 2 | 15.33 |
| Ecuador | 2005 | 1 | 2.33 | 2.33 | 0 | 0 | 0.67 | 1.67 | 8 | 0 | 8 |
| Egypt | 2008 | 3 | 4.33 | 10.33 | 0.67 | 1 | 2.33 | 5 | 22.33 | 4.33 | 26.67 |
| El Salvador | 2009 | 4.67 | 3 | 9.67 | 0 | 1.33 | 1.33 | 4.67 | 20.33 | 4.33 | 24.67 |
| Fiji | 2006 | 2 | 3.67 | 10 | 1 | 1.33 | 1 | 3.67 | 20.33 | 2.33 | 22.67 |
| Gambia | 2008 | 3 | 1.67 | 7 | 0 | 0 | 1 | 3 | 13.33 | 2.33 | 15.67 |
| Georgia | 2006 | 2 | 4 | 6.67 | 0.67 | 0.67 | 1.67 | 4.33 | 18 | 2 | 20 |
| Ghana | 2008 | 1.65 | 2.31 | 4.63 | 0 | 0.33 | 0.33 | 2.31 | 9.58 | 1.98 | 11.56 |
| Grenada | 2008 | 1.98 | 3.63 | 2.98 | 0 | 0.33 | 0 | 4.98 | 13.24 | 0.66 | 13.9 |
| Guatemala | 2009 | 3 | 3.67 | 13.33 | 0 | 1.33 | 1 | 5 | 22.67 | 4.67 | 27.33 |
| Guinea Bissau | 2008 | 1.32 | 1 | 2.31 | 0 | 0.33 | 1 | 2.31 | 7.94 | 0.33 | 8.27 |
| Haiti | 2007 | 0.67 | 1.67 | 4 | 0 | 0.33 | 1 | 2.33 | 9.67 | 0.33 | 10 |
| Honduras | 2007 | 2.64 | 2.65 | 6.65 | 0 | 0.33 | 0 | 2.64 | 12.59 | 2.32 | 14.91 |
| Hungary | 2010 | 3 | 5.33 | 17.33 | 1.67 | 1.33 | 2 | 5.33 | 31.67 | 4.33 | 36 |
| India | 2009 | 2.67 | 5 | 13 | 0 | 1 | 0.67 | 4.33 | 22.67 | 4 | 26.67 |
| Indonesia | 2007 | 1.33 | 3.33 | 7.67 | 0 | 1.33 | 1 | 3 | 16.33 | 1.33 | 17.67 |
| Jamaica | 2005 | 4 | 4.67 | 11 | 0 | 1 | 1.67 | 4 | 21.33 | 5 | 26.33 |
| Jordan | 2008 | 1.67 | 3.33 | 9.33 | 0.33 | 0 | 1.67 | 2.67 | 17.67 | 1.33 | 19 |
| Kyrgyz Repub | 2007 | 0.67 | 3 | 9.33 | 0 | 1.33 | 1.33 | 3.33 | 17.67 | 1.33 | 19 |
| Latvia | 2006 | 3.67 | 5.33 | 10.67 | 0.67 | 1 | 2 | 5 | 25 | 3.33 | 28.33 |
| Lebanon | 2009 | 3.67 | 3.67 | 13 | 1 | 1 | 1 | 4.67 | 23 | 5 | 28 |
| Lithuania | 2006 | 2.67 | 4.67 | 13 | 1 | 1.33 | 1.67 | 5.67 | 26 | 4 | 30 |
| Macedonia | 2007 | 2.33 | 3.67 | 6.33 | 0 | 1 | 1.33 | 3.67 | 16.33 | 2 | 18.33 |
| Malawi | 2008 | 2.67 | 2.67 | 9.67 | 0 | 1 | 0.67 | 4 | 18 | 2.67 | 20.67 |
| Malaysia | 2007 | 3.67 | 5 | 14 | 1 | 1 | 1 | 4.33 | 25.67 | 4.33 | 30 |
| Mali | 2008 | 1.33 | 0.67 | 1.67 | 0 | 0 | 1 | 1.67 | 6 | 0.33 | 6.33 |
| Mauritania | 2005 | 1.67 | 2 | 5.67 | 0 | 0.67 | 1.67 | 4 | 12.67 | 3 | 15.67 |
| Mauritius | 2007 | 2.33 | 3.67 | 10.33 | 0.33 | 1.33 | 1.33 | 4.33 | 21 | 2.67 | 23.67 |
| Mexico | 2008 | 2.33 | 4.33 | 12.33 | 0 | 0.33 | 1 | 4.33 | 22 | 2.67 | 24.67 |
| Moldova | 2005 | 2 | 3 | 6.33 | 0 | 1 | 1.67 | 4.33 | 15.67 | 2.67 | 18.33 |
| Mongolia | 2006 | 1 | 2.33 | 6 | 0 | 1.33 | 1 | 3.67 | 14.33 | 1 | 15.33 |
| Montenegro | 2008 | 2.67 | 5 | 12 | 0.67 | 1 | 1.33 | 5 | 25 | 2.67 | 27.67 |
| Morocco | 2007 | 2 | 1.33 | 4.67 | 0 | 0 | 1.67 | 4.33 | 12.33 | 1.67 | 14 |
| Myanmar | 2008 | 1.33 | 3 | 6 | 0.33 | 0.67 | 1.67 | 1.67 | 13.67 | 1 | 14.67 |
| Namibia | 2005 | 1 | 2 | 3.33 | 0 | 1 | 0.33 | 3 | 9.67 | 1 | 10.67 |
| Nepal | 2005 | ||||||||||
| Nicaragua | 2008 | 2.64 | 1.98 | 8.27 | 0 | 0.99 | 1.33 | 4.31 | 16.88 | 2.64 | 19.52 |
| Niger | 2008 | 1.32 | 1.33 | 2.64 | 0 | 0.33 | 1.33 | 3.97 | 10.26 | 0.66 | 10.92 |
| Nigeria | 2007 | 1.33 | 3.33 | 4.67 | 0.33 | 0.67 | 1 | 2.67 | 13.33 | 0.67 | 14 |
| Pakistan | 2009 | 0 | 1.67 | 2.33 | 0 | 1 | 0 | 1.67 | 6.67 | 0 | 6.67 |
| Palau | 2008 | 2.67 | 3 | 4.67 | 0 | 1.33 | 1 | 3.67 | 13.67 | 2.67 | 16.33 |
| Panama | 2005 | 4 | 5 | 15.33 | 1 | 1 | 1 | 5.67 | 27.67 | 5.33 | 33 |
| Paraguay | 2008 | 1 | 1.33 | 4 | 0 | 0 | 0 | 2 | 8.33 | 0 | 8.33 |
| Peru | 2008 | 3.67 | 5 | 9.67 | 1 | 1 | 2 | 5 | 23.67 | 3.67 | 27.33 |
| Philippines | 2008 | 1.65 | 2.97 | 9.6 | 0 | 0.99 | 1.32 | 3.97 | 18.52 | 1.98 | 20.5 |
| Poland | 2006 | 2.33 | 4.33 | 7.67 | 0.33 | 1.67 | 1.33 | 4 | 19.67 | 2 | 21.67 |
| Qatar | 2007 | 2 | 3.33 | 5.67 | 0.33 | 0.33 | 1.67 | 2.67 | 14.67 | 1.33 | 16 |
| Romania | 2007 | 3 | 5 | 9.33 | 0.33 | 1 | 2 | 5.67 | 23 | 3.33 | 26.33 |
| Russian Feder | 2007 | 4 | 4.67 | 9.67 | 1 | 1 | 1.67 | 5.67 | 24.33 | 3.33 | 27.67 |
| Rwanda | 2005 | ||||||||||
| Samoa | 2006 | 1.33 | 2.33 | 6 | 1 | 1 | 0.33 | 1.67 | 12.33 | 1.33 | 13.67 |
| Saudi Arabia | 2009 | 2.33 | 4.33 | 13 | 0 | 1.33 | 2 | 3.33 | 22.67 | 3.67 | 26.33 |
| Senegal | 2007 | 2.97 | 4.63 | 6.63 | 0.33 | 0.99 | 1.33 | 4.98 | 19.88 | 1.98 | 21.86 |
| Serbia | 2009 | 2.33 | 3.67 | 11 | 0.33 | 1 | 1.33 | 3.67 | 20.33 | 3 | 23.33 |
| Seychelles | 2006 | 1.98 | 1.32 | 5.63 | 0 | 0.33 | 0 | 2.64 | 10.25 | 1.65 | 11.9 |
| Sierra Leone | 2006 | 1 | 1 | 3.33 | 0 | 0.33 | 0.33 | 0.67 | 6.67 | 0 | 6.67 |
| Solomon Islan | 2009 | 3.33 | 4 | 9 | 0 | 0.33 | 0.33 | 4.33 | 18 | 3.33 | 21.33 |
| South Africa | 2008 | 4 | 4.67 | 8 | 0.67 | 1.33 | 0.67 | 5.33 | 20.33 | 4.33 | 24.67 |
| Sri Lanka | 2006 | 2 | 2.33 | 4.67 | 0 | 0.33 | 1 | 3.33 | 12 | 1.67 | 13.67 |
| St. Kitts & Nev | 2008 | 2.31 | 2.31 | 9.28 | 0.33 | 1 | 1.65 | 4.65 | 19.22 | 2.31 | 21.53 |
| St. Lucia | 2008 | 1.33 | 1.33 | 2 | 0 | 0.33 | 0.33 | 1.33 | 6.33 | 0.33 | 6.67 |
| St. Vincent & t | 2009 | 2.67 | 4.33 | 8.67 | 0 | 1 | 1 | 4.33 | 19.67 | 2.33 | 22 |
| Sudan | 2004 | 2 | 0.33 | 3.33 | 0 | 1 | 1.33 | 2.33 | 8.67 | 1.67 | 10.33 |
| Suriname | 2009 | 1.33 | 2.67 | 1.67 | 0 | 0.33 | 1 | 3 | 10 | 0 | 10 |
| Syria | 2006 | 2.33 | 3.33 | 9.33 | 0.67 | 0.67 | 1.67 | 3 | 19 | 2 | 21 |
| Tajiskitan | 2007 | 0.67 | 1.33 | 3 | 0 | 0 | 1 | 0 | 6 | 0 | 6 |
| Tanzania | 2009 | 0 | 1.67 | 2.33 | 0 | 1 | 0 | 1.67 | 6.67 | 0 | 6.67 |
| Thailand | 2007 | 2.67 | 2.67 | 5.67 | 0 | 0.33 | 1.33 | 2.67 | 13.33 | 2 | 15.33 |
| Tonga | 2009 | 1 | 3.33 | 5.33 | 0 | 0 | 0.33 | 2.33 | 11 | 1.33 | 12.33 |
| Trinidad and T | 2005 | 0.67 | 2.67 | 2 | 0 | 1.67 | 0.33 | 3 | 9.33 | 1 | 10.33 |
| Tunisia | 2006 | 3.33 | 4 | 8 | 0.67 | 1.33 | 2.67 | 4.33 | 20 | 4.33 | 24.33 |
| Turkey | 2006 | 2.67 | 3.33 | 6.33 | 0 | 1.67 | 1.67 | 3.67 | 16.33 | 3 | 19.33 |
| Turks & Caico | 2007 | 3 | 3.33 | 5.33 | 0 | 0.33 | 0.67 | 4 | 14 | 2.67 | 16.67 |
| UAE | 2007 | 3 | 4 | 7.33 | 0 | 0.33 | 2 | 4.33 | 18.33 | 2.67 | 21 |
| Uganda | 2005 | 0.67 | 0.67 | 3.67 | 0 | 0 | 0.33 | 1 | 5 | 1.33 | 6.33 |
| Ukraine | 2008 | 1.67 | 3.67 | 9.33 | 0 | 1 | 1.67 | 3.67 | 18.33 | 2.67 | 21 |
| Uruguay | 2009 | 4 | 6 | 12.33 | 0.67 | 1.33 | 1.67 | 5.67 | 26.67 | 5 | 31.67 |
| Uzbekistan | 2009 | 3.33 | 4.33 | 11.33 | 1 | 1.33 | 1.67 | 5 | 23.67 | 4.33 | 28 |
| Vanuatu | 2006 | 2.33 | 1.33 | 8.33 | 0 | 0.33 | 0.33 | 3.67 | 14 | 2.33 |