Basel Institute on Governance ¦ Basel AML Index 2025 - 14th Public Edition

Basel AML Index 2025: a cautious readjustment in global money‑laundering risk

Shifting patterns, not a collapse: the new Basel AML Index shows modest improvement in the global average score, but the story beneath the headline is mixed. The 14th Public Edition (December 2025) widens coverage to 177 jurisdictions, tightens risk categories and highlights where vulnerabilities are deepening – especially around financial transparency and the new challenges posed by virtual assets.

A global average that barely moves – why that matters

The global average Basel AML Index score changed only marginally in 2025, from 5.30 to 5.28 on a 0–10 scale where 10 represents maximum risk. Statistically the movement is negligible, but the lack of deterioration is itself notable given the speed at which new threats – particularly those linked to virtual assets and advanced technologies – are developing. That said, a flat global average masks divergent regional and country-level dynamics: more than half of the jurisdictions reassessed improved their scores while 43 percent deteriorated. The overall pattern is one of gradual clustering toward the middle of the risk distribution rather than dramatic improvement or collapse.

Methodology and what the Index measures

The Basel AML Index is a composite, research-based ranking that combines 17 publicly available indicators grouped into five domains:

1. the quality of a jurisdiction’s AML/CFT/CPF framework;
2. corruption and fraud risks;
3. financial transparency and standards;
4. public transparency and accountability; and
5. political and legal risks.

Most heavily weighted is the AML/CFT/CPF framework domain (50%), driven in large part by FATF fourth‑round mutual evaluation findings. Perception-based measures (for example, Transparency International’s Corruption Perceptions Index) are also used; the Index therefore captures vulnerability and capacity rather than attempting to quantify the absolute scale of illicit finance in each country.

Important methodological refinements in 2025 include a new, statistically driven three‑tier risk classification (lower, medium, higher) based on Jenks natural breaks and continued annual expert review of indicators and weights. The Public Edition covers only jurisdictions with sufficient data and a fourth‑round FATF evaluation; the Expert Editions (regularly updated and more granular) extend to 203 jurisdictions and are recommended for operational risk assessments.

Where the risks are rising – and why financial transparency is the big worry

Across the five domains, the most notable deterioration occurred in the financial transparency and standards domain. That signals growing concerns about beneficial‑ownership opacity, tax-related vulnerabilities and weaknesses in financial regulation and supervision. This trend is particularly troubling because weaknesses in financial transparency are classic enablers of cross‑border hiding of illicit proceeds; at the same time, they interact dangerously with new mechanisms for evading oversight – especially virtual assets, which can be used to obscure ownership, move value quickly and cross borders with minimal friction.

Corruption and fraud scores edged down slightly overall, suggesting modest global improvements, and the quality of AML/CFT/CPF frameworks improved very slightly. Public‑sector transparency risks ticked up, and political and legal risk averages stayed broadly unchanged – but with wide regional variation. Taken together, the results point to incremental regulatory and technical gains that are being offset in part by rising vulnerabilities in transparency and financial disclosure.

Bastian Schwind-Wagner _Follow

"The Basel AML Index shows a largely stable global average but conceals important shifts at regional and country levels; improvements in some higher‑risk jurisdictions are offset by weakening financial transparency in others. Policymakers and practitioners should treat the headline score as a starting point and inspect the disaggregated indicators to understand the underlying drivers of risk.

Financial institutions and supervisors must adopt a proportionate, evidence‑based approach: use the Expert Edition data to target controls where vulnerability is highest and avoid blanket de‑risking. Strengthening beneficial‑ownership transparency, supervisory capacity and cross‑border cooperation remains essential to reduce both traditional and emerging channels for illicit finance."

Regional dynamics: some improvements, some slippage

The Index reveals distinct regional patterns:

• Sub‑Saharan Africa: notable progress. Despite still‑elevated average risk, the region accounted for many of the largest year‑on‑year improvers. Seventy percent of jurisdictions improved in 2025 and several countries exited the FATF grey list after implementing reforms. This demonstrates that concentrated efforts – often supported by technical partners – can deliver measurable improvements in AML/CFT systems.
• EU and Western Europe: widening concerns. The region’s average risk rose slightly. Around 40 percent of jurisdictions worsened year‑on‑year. The rise in financial‑transparency risk among historically strong performers is a red flag for international financial centres and for organizations relying on presumptions of low risk across parts of Europe.
• North America, Eastern Europe & Central Asia, Middle East & North Africa: small increases in average risk were recorded, driven by particular weaknesses in financial transparency and by political/legal stressors in some jurisdictions.
• South Asia, East Asia & Pacific, Latin America & the Caribbean: modest improvements overall, though outliers remain and vulnerabilities persist in financial disclosure and enforcement in parts of these regions.

The Index’s country ranking shows familiar high‑risk outliers – Myanmar, Haiti and the Democratic Republic of the Congo – while Finland, Iceland and San Marino rank as the lowest risk among covered jurisdictions. Thirteen jurisdictions were added to the Public Edition this year as data availability improved.

Virtual assets: measurement gaps, practical implications

The 2025 Index does not include a dedicated virtual‑asset indicator, reflecting the current limitations of national‑level data and the borderless nature of many crypto activities. Nevertheless, the Index remains relevant for assessing virtual‑asset-related risk because the same structural vulnerabilities that enable misuse of traditional financial channels – weak beneficial‑ownership transparency, poor supervision, corruption, weak rule of law – also facilitate criminal use of virtual assets.

Practical takeaways for risk assessment in the age of crypto:

• Treat virtual assets as a multiplier of existing vulnerabilities rather than as an isolated risk. A jurisdiction with weak financial transparency and lax supervision is more likely to be permissive of illicit activity involving virtual assets.
• Use the Expert Edition (or its Plus version) to drill into FATF Recommendation performance, especially Recommendations relevant to virtual assets and new technologies (for example, R.15 on new technologies, R.26 and R.27 on regulation and supervision, and measures on international cooperation).
• Combine Index insights with specialized blockchain analytics and local supervisory intelligence. Blockchain analytics give adoption and flow proxies but must be interpreted against the jurisdictional picture of governance, supervision and enforcement provided by the Index.

A clearer middle band: improving proportionality for compliance and supervision

The Index’s move to a more balanced three‑tier classification responds to an important practical problem: many financial institutions and supervisors have focused overwhelmingly on high‑risk lists (black/grey lists) but have lacked clear, data‑driven guidance on what counts as lower risk. That uncertainty discourages the appropriate use of simplified measures and contributes to over‑application of heavy controls or to indiscriminate de‑risking. By better distinguishing lower, medium and higher risk in its Expert Edition, the Basel AML Index aims to support proportionate, risk‑based decision‑making and to encourage use of simplified measures where justified by reliable, integrated data.

Implications for financial institutions, supervisors and policymakers

• Financial institutions should not rely solely on headline rankings. The Index’s value lies in its disaggregated indicators: the composition of a jurisdiction’s score matters for due diligence, product monitoring and decisions about where to operate. Use the Expert Edition to examine FATF Immediate Outcomes most relevant to your exposure.
• Supervisors and policymakers should prioritize improvements in financial transparency and beneficial‑ownership frameworks. The Index underscores that legal and technical AML measures alone are insufficient if ownership channels and financial disclosure regimes remain porous.
• Donors and technical partners: the Index shows that targeted support works – progress in parts of Sub‑Saharan Africa is tangible proof. Continued investment in capacity building (FATF action plans, supervisory strengthening, FIU capacity and cross‑border cooperation) yields measurable results.
• For jurisdictions designing national risk assessments on virtual assets: rely on a blended approach that combines structural governance indicators (as in the Index) with supply‑side data (exchange activity, VASP registrations) and public‑private information sharing.

Limitations and prudent use of the Index

The Basel AML Index measures vulnerability and capacity; it is not a direct estimate of the absolute amount of money being laundered. The Index relies on a mix of effectiveness assessments, statistical data and perception measures, and therefore must be used carefully in operational decisions. Data gaps (for example in virtual‑asset usage by jurisdiction) make complementary sources essential. For transactional compliance or client‑level decisions, the Basel Institute recommends the Expert Edition or Expert Edition Plus rather than the Public Edition.

Conclusion: incremental progress, clear fault lines

The 2025 Basel AML Index sends a nuanced message. Global averages are steady and many jurisdictions show concrete improvements, particularly where sustained reform and technical assistance have been deployed. At the same time, growing weaknesses in financial transparency and the expanding role of virtual assets expose new and intensifying channels for abuse. The Index underlines a pragmatic priority: strengthen disclosure, close beneficial‑ownership loopholes, and align supervision and enforcement to the realities of fast‑moving financial innovations. Where those foundations are weak, the risks associated with both traditional and emerging methods of moving illicit value will continue to rise.

Dive deeper

• Research ¦ Basel Institute on Governance. 2025. ‘Basel AML Index 2025: 14th Public Edition – Global money laundering and financial crime risk ranking.’ Available at: index.baselgovernance.org. https://index.baselgovernance.org ¦ Link ¦ licensed under the following terms, with no changes made: CC BY-NC-ND 4.0