Phoenix Risk Index

Phoenix Risk Index

What is it ?

The PRI (Phoenix Risk Index) is a score based on our own methodology. It is therefore unofficial and reflects our internal analysis.

By analysing 16 different criteria, this score reflects the most exhaustive possible level of risk in a country from the point of view of Money Laundering, Terrorist Financing and Corruption.

The 16 separate criteria are as follows :

  • Monaco’s list of high-risk States or territories
  • The list of non-cooperative states
  • The EU list
  • The FATF list
  • Transparency International’s corruption index (the higher the index, the lower the impact of corruption)
  • The rating of the efficiency of the country’s system, given by the FATF reports (the higher the rating, the better the efficiency of the country’s system)
  • The technical compliance rating given by the FATF reports (the higher the rating, the better the country’s technical compliance)
  • The level of CRS transparency
  • The level of BEPS transparency
  • UN and EU sanctions lists
  • Whether or not a country belongs to the EU
  • AMSF National Risk Assessment
  • Tax Justice Network’s Corporate Tax Haven score
  • Criminal Index crime rate (the higher the number, the higher the crime rate)
  • Terrorism Index (the higher it is, the higher the rate of terrorism)
  • The EU list of non-cooperative countries and territories for tax purposes

 

The PRI ranges from 1, the lowest score, to 5, the highest score. The closer a country is to 5, the more it is considered to be at risk.

Our sources

This list is drawn up in accordance with international standards, in particular those of the Financial Action Task Force (FATF), and takes account of mutual evaluations and other relevant sources of information. The inclusion of a country or territory in this list entails the application of enhanced due diligence measures and other regulatory obligations for financial institutions and other entities subject to anti-money laundering measures in order to prevent and detect illegal activities linked to these jurisdictions.

 

https://amsf.mc/accompagnement/etats-ou-territoires-a-haut-risque-ethr

The lists of non-cooperative states or territories are compilations published by various international bodies, such as the OECD or the FATF, which identify countries or territories that do not meet international standards in terms of tax transparency, the fight against money laundering, or judicial cooperation. These lists are used to highlight jurisdictions that do not participate effectively in the global fight against tax evasion, money laundering and the financing of terrorism.

https://www.consilium.europa.eu/fr/policies/eu-list-of-non-cooperative-jurisdictions/timeline-eu-list-of-non-cooperative-jurisdictions/

The EU watch list is a regulatory instrument that identifies third countries with strategic deficiencies in their anti-money laundering and anti-terrorist financing regimes. The purpose of the list is to protect the EU’s financial system by preventing European entities from being used by high-risk jurisdictions to launder money or finance terrorist activities. The countries on this list are subject to reinforced controls and increased vigilance measures by financial institutions and other obliged entities in the EU, to minimise the risks associated with financial flows from these jurisdictions.

https://finance.ec.europa.eu/financial-crime/anti-money-laundering-and-countering-financing-terrorism-international-level_en?prefLang=fr&etrans=fr

This intergovernmental organisation, founded by the G7 countries, aims to promote effective preventive policies to protect the global financial system against these threats. Countries on the FATF list are often subject to increased scrutiny and must work with the FATF to address identified deficiencies in their regulatory regimes. The lists generally comprise two categories: countries with strategic deficiencies for which an action plan has been agreed (grey list), and those considered to pose a significant risk to the international financial system and which have not made sufficient commitments in response (black list).

https://www.fatf-gafi.org/fr/countries/liste-noire-et-liste-gris.html

The Corruption Perceptions Index, published annually by Transparency International, measures perceptions of public sector corruption in countries around the world. This index, known as the Corruption Perceptions Index (CPI), ranks countries on a scale from 0 to 100, where a higher score indicates a lower perceived level of corruption in the public sector. The CPI is a crucial tool for assessing the transparency and integrity of governments, and is widely used by analysts, investors, and international organisations to identify corruption-related risks and to encourage reforms in public administrations around the world.

https://www.transparency.org/en/cpi/2023

The FATF report’s rating of the efficiency of the country’s system assesses the effectiveness with which a country implements measures and systems to combat money laundering and terrorist financing. This assessment is based on the recommendations of the Financial Action Task Force (FATF), an international authority in the field. The report examines the capacity of the country’s legal and regulatory frameworks to prevent and combat these illegal activities, as well as the effectiveness of existing institutions and control mechanisms. The ratings in this report influence the international perception of a country’s compliance and can have a significant impact on its global economic and financial relations.

https://www.fatf-gafi.org/fr/home.html

The FATF Report’s technical compliance rating assesses the extent to which a country’s laws and regulations are aligned with the FATF 40 Recommendations on combating money laundering and terrorist financing. This assessment focuses on the adequacy of a country’s legal and regulatory frameworks to prevent and combat these illegal activities. The rating does not measure the effectiveness of the application of these laws, but only verifies whether the necessary legal structures are in place and comply with the international standards established by the FATF.

https://www.fatf-gafi.org/fr/home.html

The Common Reporting Standard (CRS) level of transparency assesses the extent to which a country complies with the requirements for automatic reporting of financial information based on international standards established by the Organisation for Economic Co-operation and Development (OECD). The CRS aims to combat tax evasion by requiring financial institutions to automatically disclose information on financial accounts held by non-residents to the tax authority of the country where the account is maintained, which then exchanges this information with the tax authority of the account holder’s country of residence. Increased transparency in the CRS improves tax fairness, reduces international tax evasion and strengthens tax cooperation between countries.

https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/

The level of transparency in terms of BEPS (Base Erosion and Profit Shifting) refers to a country’s commitment and compliance with the international standards developed to combat tax base erosion and profit shifting practices. These standards, developed by the OECD, aim to prevent the strategies that some companies use to reduce their taxes by exploiting the differences and inconsistencies between the tax systems of different countries. A high level of BEPS transparency indicates that a country proactively discloses its companies’ international tax arrangements and agreements, participates in the automatic exchange of information, and adopts legislative measures to prevent cross-border tax evasion.

https://www.consilium.europa.eu/fr/policies/eu-list-of-non-cooperative-jurisdictions/

UN and EU sanctions lists are compilations of restrictive measures imposed on individuals, entities or countries to respond to international crises, maintain or restore international peace and security, or promote respect for human rights and democracy. Sanctions can include trade embargoes, financial restrictions, travel bans and asset freezes. The UN list is drawn up by the UN Security Council and applies to all Member States, while the EU can impose additional sanctions that reflect its own foreign and security policy objectives.

https://www.un.org/securitycouncil/fr/content/un-sc-consolidated-list

The list of countries belonging to the European Union (EU) includes the Member States that have joined this unique political and economic union, which aims to promote deeper integration between its members. From 2021, the EU will consist of 27 countries, following the withdrawal of the United Kingdom. EU members enjoy many benefits, including the free movement of goods, services, people and capital across internal borders, a common trade policy, and a single currency used by 19 of these countries, the euro.

https://www.douane.gouv.fr/lexique/etats-membres-de-lunion-europeenne#:~:text=Aujourd’hui%2C%20l’Union,%2C%20Slovaquie%2C%20Slov%C3%A9nie%2C%20Su%C3%A8de.

The National Risk Assessment (NRA) carried out by the Monegasque Financial Market Supervisory Authority (AMSF) is an essential process for identifying, evaluating and understanding the money laundering and terrorist financing risks to which Monaco is exposed. This assessment helps to determine specific threats and sectoral vulnerabilities, enabling the authorities and regulated entities to prioritise and apply the most effective countermeasures. It also aims to strengthen the regulatory framework and supervisory practices, ensuring optimal allocation of resources to combat these risks.

https://amsf.mc/publications/evaluation-nationale-des-risques-n%C3%82%C2%B02

The Tax Justice Network’s ‘Tax Paradise Score’ is a key indicator used to assess the extent to which jurisdictions facilitate tax evasion and aggressive tax planning on a global scale. This index is part of the Financial Secrecy Index (FSI) published by the Tax Justice Network, which ranks countries according to their financial opacity and the scale of cross-border financial activity they attract. A high score on this index suggests that the jurisdiction offers a favourable out-of-sight environment where individuals and companies can divert or hide capital to avoid paying tax.

https://taxjustice.net/

The Criminal Index score is a statistical measure that assesses the level of crime in different countries or regions. It is often calculated on the basis of various crime indicators, such as rates of violent crime, theft and other offences. It is used to give a general estimate of the safety of a specific area, helping residents, decision-makers, businesses and tourists to understand the potential risks associated with a particular location. A high score on the crime index indicates a higher level of crime.

https://ocindex.net/rankings

The Terrorism Index score assesses the risk and impact of terrorism in various countries and regions around the world. This assessment is based on an analysis of the frequency, intensity and consequences of terrorist acts. The Terrorism Index is often used by governments, security organisations, businesses and individuals to understand the level of terrorist threat in a specific region. A high score on this index indicates a more significant presence of terrorist activity, which can influence security policy, contingency planning and risk management decisions.

https://www.economicsandpeace.org/global-terrorism-index/

The EU List of Uncooperative Countries and Territories for Tax Purposes is a crucial tool adopted by the European Union to combat tax evasion and promote good tax governance worldwide. First published in December 2017, the blacklist includes jurisdictions that have failed to meet international standards on tax transparency, exchange of information and base erosion and profit shifting (BEPS). Countries on this list are deemed to be uncooperative in their tax practices and may be subject to sanctions or restrictive measures by EU Member States to encourage them to bring their regulations into line with accepted international standards.

https://www.consilium.europa.eu/fr/policies/eu-list-of-non-cooperative-jurisdictions/

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Tel : +377 97 77 10 44

Email : contact@phoenix.mc

 

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MC 98000 Monaco

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