Peddling Peril Index

Country: The PPI ranks 200 countries, entities, and territories.

PPI Rank: The country's overall rank in the Peddling Peril Index, based on its total score.

Cluster: A cluster analysis divides countries by score into four groups. The cluster analysis allows for quick determination of a country’s placement in a high or low-scoring group (or a group in-between), and for easy cross-country comparisons. Cluster 1 (Group 1) includes the ranks 1 to 41; Cluster 2 (Group 2) includes the ranks 42 to 91; Cluster 3 (Group 3) includes the ranks 92 to 162; and Cluster 4 (Group 4) includes the ranks 163 to 200.

Tier: Countries are grouped into three distinct tiers, each of which represents countries that are alike in their supply potential, economic development, and other measures. Tier One in the PPI includes those nations that can supply, at least partially but significantly, the wherewithal to make nuclear weapons, other WMD, or the means to deliver them. Tier Two includes countries of transshipment concern, and Tier Three includes the remainder of the countries.

Total Points (1300 Max): The project considered several weighting options for the super criteria. Based on discussions among experts, a favored weighting option emerged. The project decided to scale each super criterion score to 100 points and then apply a weighting factor. The weight, in part, is used to represent how important a super criterion is to an overall strategic trade control system. Under this methodology, the Ability to Prevent Proliferation Financing and Adequacy of Enforcement super criteria each received double the scaled points of the Legislation and Ability to Monitor and Control Strategic Trade super criteria, which in turn received double the scaled points of the International Commitment super criterion. For International Commitment, Legislation, Ability to Monitor and Detect Strategic Trade, Ability to Prevent Proliferation Financing, and Adequacy of Enforcement, the weighting factors are, after scaling each to 100 points, 1, 2, 2, 4, and 4, respectively. This way, the total possible weighted score adds up to 1300 points. "

International Commitment (100 Max): Super Criterion International Commitment measures memberships and adherence to a range of nonproliferation conventions, treaties, regimes, and groups. Commitment is not a measure of effectiveness or implementation of the principles or provisions of these instruments on a national level, but it is an important first step. It demonstrates a state’s willingness to follow international standards, potentially improve their own performance, dedicate resources to doing so, share information with other countries and regimes, and shows responsiveness to international best practices.Super Criterion International Commitment includes 21 sub-criteria as indicators of performance. Each of the sub-criteria is weighted as low-, medium-, or high-impact by PPI staff. This super criterion only consists of “positive indicators,” where of the 21 sub-criteria, three are considered low-impact, eleven are medium-impact, and seven are high-impact. They are worth five, 10, and 15 points, respectively. A country could receive a raw total of 230 points. This raw score is used to arrive at a total, weighted score of 100 possible points used for the final rank.

Legislation (200 Max): Super Criterion Legislation assesses whether a country has legislation, authorities, and regulations in place to control trade in strategic commodities, with a focus on nuclear and nuclear-related goods. The ability of a country to act to prevent strategic commodity trafficking lies at the heart of the PPI. Without the legal basis and tools to act against illicit procurement, such efforts cannot be detected, investigated, and shut down, and key actors cannot be prosecuted. Legislation does not need to be the same for each country, but legislation that is adequate to achieve its mission should include provisions addressing import and export controls including national control lists of dual-use items, licensing regulations for controlled goods, controls on the transit and transshipment of goods, and catch-all controls. It should also provide for the national use of proper documentation for imports and exports that help with regulation. Of the 14 sub-criteria, four are considered low-impact, five are medium-impact, and four are high-impact, worth five, 10, and 15 points respectively, and one is an extra credit opportunity. A country could receive a raw total of 130 points under this super criterion. This raw score is used later to arrive at a total, weighted score out of 200 possible points and a rank for each country.

Ability to Monitor and Detect Strategic Trade (200 Max): Super Criterion Ability to Monitor and Detect Strategic Trade assesses the mechanisms that allow a state to monitor and control strategic or sensitive trade, and the hospitableness of the state environment to achieving the mission. It focuses mostly on tangible outcomes rather than simply on the theoretical abilities of a country, by factoring in various performance metrics or views about performance such as statistics, surveys, and rankings conducted by other non-governmental organizations or international organizations. For example, quantitative assessments about countries’ internal stability, use of electronic trade documentation, customs diligence, and customs inspection rates are included. These factors can significantly add to or take away from a country’s ability to monitor and detect strategic trade. This super criterion is one of the most challenging for countries to score highly on as it measures tangible outcomes rather than pledges or intentions made in treaties or laws. In the 19 sub-criteria, it measures actions, efficiencies, transparencies, and stability. Most countries can only improve their performance under this super criterion through systematic and long-term improvements. Of the 19 sub-criteria, three are considered low-impact, eleven are medium-impact, and four are high-impact, worth five, 10, and 15 points, respectively, and one is an extra-credit opportunity. A country could receive a total of 185 points under this super criterion. This raw score is used later to arrive at a total, weighted score out of 200 points and rank for each country.

Ability to Prevent Proliferation Financing (400 Max): Super Criterion Ability to Prevent Proliferation Financing evaluates a country’s ability to prevent the raising and using of funds for WMD proliferation, encompassing a relatively new approach to detecting and preventing strategic commodity trafficking. Overall, international effort devoted to assessing and countering proliferation financing is slowly increasing. Moreover, states are increasingly accepting proliferation financing as a key part of strategic trade controls. This is visible by the inclusion of proliferation financing in export control fora, and by proliferation financing becoming a new priority in bilateral export control related trainings and capacity-building. This super criterion draws heavily on evaluations conducted by the Financial Action Task Force (FATF), the major international organization seeking to establish standards and assess efforts at preventing money laundering and other financial crime. This super criterion first assigns points to countries based on sub-criteria derived mostly from the FATF determinations. These sub-criteria assess countries’ theoretical capabilities to prevent proliferation financing and financial crime more generally based on their financial regulatory systems and counter-illicit financing programs. These thirteen sub-criteria are characterized as “positive indicators.” The PPI then takes away points according to five “negative indicator” sub-criteria, or concrete information and examples of poor controls, such as when countries are known to have been hubs for money laundering or are listed as high-risk jurisdictions by FATF or the EU. The positive and negative indicators are assigned a low, medium, or high impact for scoring purposes. The project next assigns or takes away available “extra credit” points according to three other FATF-related sub-criteria. Finally, the judgment of experts in proliferation financing who were consulted for the PPI is used to take away or assign points based on their knowledge of proliferation financing in certain countries. This super criterion contains a total of 22 sub-criteria, of which 13 are positive, five are negative, three are extra-credit opportunities, and one is an expert judgment. Of the 13 positive sub-criteria, one is considered low-impact, ten are medium-impact, and two are high-impact. They are worth 5, 10, and 15 points, respectively. Absent extra credit and expert knowledge points, a country could receive a total of 135 points under this super criterion. This raw score is used later to arrive at a total, weighted PPI score out of 400 possible points and a rank for each country

Adequacy of Enforcement (400 Max): Super Criterion Adequacy of Enforcement assesses the adequacy of a state’s enforcement activities or efforts against strategic commodity trafficking. It assesses a range of 28 sub-criteria, including the national legal basis to act to penalize strategic commodity trafficking. The Enforcement super criterion also assesses participation or lack thereof in applicable treaties, cooperation with countries that are strong on enforcement, and participation in foreign trainings and outreach. It factors in issues that could inhibit enforcement. Of the 23 positive sub-criteria, eight are considered low-impact, ten are medium-impact, and five are high-impact. They are worth five, 10, and 15 points, respectively. In five negative sub-criteria, points are subtracted from countries. For example, point deductions were made if a country was involved in violations of international sanctions on North Korea, as documented by the UN Panel of Experts on North Korea, and analyzed by the Institute. Further, if there is prevalence of government-sanctioned undermining of strategic trade controls and regime guidelines, points were subtracted, as well as for countries where enforcement is assessed to be affected by loss of government control due to militia groups and widespread organized crime. A country could receive up to 215 points under this super criterion. This raw score is used later to arrive at a total, weighted score of 400 possible points and a rank for each country.