High-Risk Jurisdictions
Country Risk Assessment

Country risk categorisation is a crucial factor in global finance, influencing investment decisions, regulatory compliance, and economic stability. High-risk jurisdictions are countries
that pose significant financial, regulatory, and operational risks to businesses and financial institutions. The Financial Action Task Force (FATF) and global institutions such as the IMF and World Bank classify countries based on their adherence to international financial crime standards, economic stability, and governance efficiency.

Risk Factors
  1. Financial Crime & Money Laundering Risks – Weak anti-money laundering (AML) controls and terrorist financing concerns.
  2. Political Instability & Sanctions – Nations experiencing civil unrest, corruption, or subject to international sanctions.
  3. Economic Volatility – Countries with high inflation, sovereign debt distress, and unstable financial institutions.
  4. Tax Evasion & Banking Secrecy – Jurisdictions that facilitate illicit financial flows, offshore tax evasion, and non-cooperation in financial transparency.
Current High-Risk Jurisdictions (2024-2025)
1. FATF Grey and Black Listed Countries (As of January 2025)
The FATF maintains two lists:
ListDefinitionCountries
Black ListNon-cooperative jurisdictions with severe AML/CFT deficienciesNorth Korea, Iran, Myanmar
Grey ListMonitored jurisdictions with strategic deficiencies in AML/CFT regulationsPakistan, South Africa, UAE, Nigeria, Philippines, Syria, Turkey
2. Countries with High Economic & Sovereign Risk (IMF Report, 2024)

The IMF classifies high-risk countries based on sovereign debt risk, inflation, and economic distress

IMF Risk Report – 2024.

CountryRisk CategoryKey Economic Risks
ArgentinaSovereign Debt CrisisInflation exceeding 200%, IMF bailout dependency
LebanonBanking CollapseCurrency devaluation, unsustainable external debt
Sri LankaHigh Fiscal RiskOngoing IMF debt restructuring, economic recession
TurkeyMonetary VolatilityHigh inflation, geopolitical tensions
EgyptExternal Debt CrisisRising inflation, reduced investor confidence
3. Sanctioned & Geopolitically Unstable Nations
  • Russia & Belarus: Heavy
    Western sanctions post-Ukraine war.
  • Iran & North Korea: Global
    Trade and banking restrictions due to nuclear program concerns.
  • Afghanistan, Syria, Venezuela:
    Political instability, weak financial governance, sanctions compliance issues. 
    OFAC Sanctions List – 2024
4. Basel AML Index

The Basel AML Index is an independent ranking and risk assessment tool for money laundering and related financial crime risks. Produced by the Basel Institute on Governance since 2012, it provides a holistic picture of money laundering risks around the world.


Public Ranking – Basel AML Index | Basel AML Index

5. Corruption Perceptions Index (CPI)

The ‘Transparency International Corruption Perceptions Index (CPI) is an average of expert scores produced by a variety of agencies assessing corruption at the national level as perceived by experts and businesspeople. It is an aggregate of corruption risk perception and does not measure transparency.

2023 Corruption Perceptions Index: Explore the… – Transparency.org

6. Sovereign Credit Ratings

Sovereign credit ratings are important to international investors because they quantify an assessment of country risk.

Sovereign Credit Ratings Methodology: An Evaluation – WP/02/170

7. Financial Secrecy Index

Financial secrecy facilitates tax abuse, enables money laundering and undermines the human rights of all. The index identifies the world’s biggest suppliers of financial secrecy and spotlights the laws that governments can change to reduce their contribution to financial secrecy.

Financial Secrecy Index – Tax Justice Network

Important to understand the following:-
  1. Risk Assessment, Profiling & Categorisation for High Risk Jurisdictions
  2. Name & Transaction screening
  3. Best Practices, Case Studies & current geo-political tensions
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