FATF status

Vanuatu was removed from the FATF List of Countries that have been identified as having strategic AML deficiencies on 29 June 2018.

Latest FATF Statement - 29 June 2018

The FATF welcomes Vanuatu's significant progress in improving its AML/CFT regime and notes that Vanuatu has established the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2016. Vanuatu is therefore no longer subject to the FATF’s monitoring process under its ongoing global AML/CFT compliance process. Vanuatu will work with APG to improve further its AML/CFT regime.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Vanuatu was a follow-up Evaluation that took place in August 2018. According to that Evaluation, Vanuatu was deemed Compliant for 18 and Largely Compliant for 19 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Vanuatu's economy is largely driven by agriculture, tourism, and offshore financial services, with agriculture supporting around 65% of the population. The country exports products such as copra, kava, and beef, while heavily relying on imports for machinery and foodstuffs. Despite its economic potential, Vanuatu faces challenges including vulnerability to natural disasters and a narrow export base.

Vanuatu's investment climate is bolstered by its status as a tax haven, attracting international businesses due to the absence of income tax and favorable labor laws. However, concerns regarding governance and transparency in the offshore financial sector have prompted calls for stricter regulations. Despite these challenges, the country's strategic location and natural beauty continue to make it an attractive destination for foreign investment.