The Basel AML Index Explained: What the Country Risk Score Measures

The Basel AML Index is a country risk ranking published each year by the Basel Institute on Governance. Compliance teams often use it when they assess whether a client's home country, or the country in which their money is held, raises the risk of money laundering. Used well, it is a helpful input. Used as a pass or fail test, it can mislead. This guide explains what the index measures, how it is organised, what the latest edition found, and how accountants might use it. It is based on the Institute's pages for the 2025 edition and its key findings page. We do not reproduce individual country scores or rankings, since they change each year and you should read the current edition at source.

What the index is

The Basel Institute describes the index as an independent, data-based ranking and risk assessment tool for money laundering and related financial crime risks. It is developed and maintained through the Institute's International Centre for Asset Recovery. The 2025 edition, published on 8 December 2025, is the 14th annual public edition. It covers 177 jurisdictions, 13 of which were added that year because more data became available.

How risk is defined

The Institute defines risk as a country's vulnerability to money laundering and related financial crimes and its capacities to counter these threats. It states that the index does not estimate the actual volume of money laundering. Scores run from 0 to 10, where 10 is maximum risk.

The five risk domains

The 2025 edition draws on 17 publicly accessible sources, which include the Financial Action Task Force (FATF), Transparency International and the Global Initiative against Transnational Organized Crime. The scores are grouped into five domains:

• quality of the AML, counter-terrorist financing and counter-proliferation financing framework;
• corruption and fraud risks;
• financial transparency and standards;
• public transparency and accountability;
• political and legal risks.

Because some of the sources are the same ones used elsewhere in your risk process, you should be careful not to count the same evidence twice. For example, FATF is one of the named sources, and our guide to reading a mutual evaluation report explains the underlying reports. Transparency International's work is explained in our guide to the Corruption Perceptions Index.

What the 2025 edition found

According to the Institute:

• the global average score moved from 5.30 to 5.28, which it calls statistically insignificant;
• of the jurisdictions assessed the previous year, 54% (88) improved, 43% (71) worsened and 3% (5) were unchanged;
• by domain, the average for AML/CFT/CPF frameworks moved from 5.58 to 5.54, corruption and fraud from 5.12 to 5.09, public accountability from 4.23 to 4.35 and political and legal risks from 4.45 to 4.46;
• financial transparency and standards was described as one of the most notable deteriorations, linked to beneficial ownership transparency and weaknesses in tax and financial regulation, though the source gives no figures;
• Sub-Saharan Africa had a regional average of 6.14, still elevated, but 70% of its jurisdictions improved significantly and six left the FATF grey list.

The Institute also notes that the Expert Edition now uses a three-tier risk system instead of a broad middle band, which had grouped most jurisdictions together and made comparison harder.

What the index cannot tell you

A country score describes a jurisdiction, not your client. A low-risk country can host a high-risk client, and the reverse. The index is also a composite of other sources, so it is only as current as its inputs. The Institute says the 2025 edition faces emerging challenges, including how to identify lower-risk jurisdictions and how to assess structural vulnerabilities related to virtual assets.

How accountants can use it: our suggestions

These are our suggestions, not regulatory requirements.

1. Treat it as one input. Combine it with FATF lists, mutual evaluation reports, sanctions lists and your supervisor's national risk assessment.
2. Record the edition and date. Note "Basel AML Index 2025, checked on [date]" in the risk assessment so a reviewer can see what you relied on.
3. Use the domains. If a country scores worse on financial transparency, ask more questions about ownership structures, as set out in our guide to ultimate beneficial ownership.
4. Avoid hard cut-offs. If your policy sets a score above which enhanced due diligence applies, explain why that level was chosen and let staff escalate below it where facts justify.
5. Review annually. The index is updated each year, so build a check into your annual risk assessment review.

What we could not confirm

• The full list of the 17 sources and their weights, which the pages we read did not set out.
• The number of individual indicators behind the five domains.
• The detailed methodology and limitations in the Institute's full PDF report, which we did not read.
• Any later edition published after the 2025 report.

Frequently asked questions

Does a high Basel score mean a country launders more money?

No. The Institute says the index does not estimate the actual volume of money laundering. It assesses vulnerability and the capacity to counter these threats.

What is the scale?

0 to 10, where 10 is maximum risk, according to the Basel Institute.

How many countries does it cover?

177 jurisdictions in the 2025 edition.

This guide is general information, not legal advice.