Stopping Dirty Money: the Global Effective-O-Meter

Stopping Dirty Money: the Global Effective-O-Meter

This feature was updated on 16 February, 2019 in order to reflect the latest FATF reports.

About the Global Effective-O-Meter

Large-scale corruption schemes are only feasible if there’s a way to hide and spend the proceeds.

Cases from Azerbaijan and Brazil to FIFA and Malaysia have shown how corrupt networks are able to open bank accounts, transfer funds across borders and acquire prime real estate and luxury goods in global capitals.

Since 2014, a global anti-money laundering body called the Financial Action Task Force (FATF) has been assessing whether countries’ measures to stop dirty money are actually working in practice – whether they are effective – in addition to the extent to which laws are in place on paper.

To date, FATF and its regional offices have assessed 70 countries across the world.  As the Effective-O-Meter shows, average global anti-money laundering effectiveness stands at just 32 per cent. There has been no change since the last edition of the Effective-O-Meter in February 2018, which covered 46 countries.

In simple terms, on average all countries assessed so far are failing to effectively prevent corrupt individuals and their professional enablers from stealing money and getting away with it, at enormous cost to citizens.

Overall, just nine countries score above 50 per cent: Australia, Israel, Italy, Portugal, Spain, Sweden, Switzerland, the United Kingdom and the United States.

However, even these relative high-scorers are at the 70 per cent mark or below. In addition, anti-corruption NGOs in the top-rated jurisdiction, the UK, have expressed their dismay at the high ratings, pointing to multiple shortcomings in FATF’s review.

Since 2014, Transparency International has been calling on FATF to listen to the views of civil society experts during its country visits, precisely to reduce the risk of critical information being ignored.

As of February 2019, global effectiveness at stopping money laundering stands at 32%.

 

Methodology note

The Effective-O-Meter and effectiveness map draw on country effectiveness ratings across 11 “immediate outcomes” available from FATF here.

The 4-point qualitative scale used by FATF to measure effectiveness has been converted to a numerical scale following the system suggested by the OECD here:
Low effectiveness (LE): 0;
Moderate effectiveness (ME): 1;
Substantial Effectiveness (SE): 2;
High Effectiveness (HE): 3.

The unweighted average effectiveness score for each country across all 11 FATF immediate outcomes has been expressed as a percentage of the highest possible score (3: high effectiveness). The global effectiveness score is an unweighted average of the scores for all available countries.

Images: Transparency International

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