FATF Status

Bhutan is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bhutan was undertaken in 2023. According to that Evaluation, Bhutan was deemed Compliant for 7 and Largely Compliant for 26 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Corruption is relatively low in Bhutan compared to other South Asian countries, aided by a civil service ethos that emphasizes service to the state and the king. Despite this, the public procurement sector faces risks due to favoritism. The Anti-Corruption Act addresses various forms of corruption, and the government generally enforces these regulations effectively.

Bhutan's economy is predominantly driven by agriculture, forestry, tourism, and hydroelectric power, with agriculture being the primary source of livelihood for over half of its population. The country has experienced rapid economic growth, largely due to investments in hydropower, making it a key electricity exporter to India, while also diversifying into sectors like technology and manufacturing.

Bhutan's investment climate is improving, driven by strong economic growth and strategic relations with India, its largest trading partner. The government actively encourages foreign investment in sectors such as hydropower and technology while focusing on sustainable development. Initiatives like the establishment of Thimphu TechPark are fostering innovation and entrepreneurship, further enhancing the investment landscape.