Financial Crime World

Zimbabwe Lands in Top 12 of High-Risk Money Laundering Countries

A recent report by the Basel Institute has ranked Zimbabwe as one of the top 12 countries in the world with high risks of money laundering, scoring 6.78 out of 10 on the 10th Basel anti-money laundering index.

Risk Factors Contributing to Higher Score

  • Higher risks of human trafficking
  • Increased corruption

Zimbabwe’s risk score has increased compared to last year’s score of 6.54, making it a concerning development as the country works to be removed from the Financial Action Task Force (FATF) grey list.

The Basel AML Index

The Basel AML index measures the world’s annual progress against money laundering and terrorist financing using a composite methodology based on 16 indicators relevant to evaluating ML/TF country risk. The report highlights that money laundering risks are constantly evolving, making it necessary to review and update the index annually.

Consequences of Not Addressing Money Laundering Risks

  • Severe consequences for the country if Zimbabwe falls into the blacklist
  • Not considered a safe jurisdiction for preventing terror funding and money laundering

The report also notes that money laundering is a significant contributor to illicit financial flows (IFFs) in Zimbabwe, resulting in a cumulative loss of $12 billion over the past three decades.

Areas of Focus for Zimbabwe

  • Strengthening its anti-money laundering framework
  • Improving financial transparency and accountability
  • Addressing vulnerabilities beyond the financial sector
  • Prioritizing beneficial ownership transparency measures
  • Responding effectively to threats from virtual assets

Experts are urging Zimbabwe to focus on addressing these areas to demonstrate its commitment to combating money laundering and terrorist financing.

Next Steps for Zimbabwe

As Zimbabwe works towards removing itself from the FATF grey list, it is crucial that it takes concrete steps to address these concerns. The country must prioritize addressing the identified risk factors and demonstrate its commitment to combating money laundering and terrorist financing.