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 one of the smallest globally, yet it has seen rapid growth largely driven by hydropower investments. Key sectors include agriculture, forestry, and tourism, with agriculture being the primary livelihood for over half of the population. The country maintains a unique economic model focused on Gross National Happiness, emphasizing sustainable development and environmental conservation.

Bhutan's investment climate is positively influenced by its strategic location between India and China, with the government actively promoting foreign investment, especially in the hydropower and technology sectors. The establishment of the Thimphu TechPark demonstrates Bhutan's commitment to fostering innovation and modernizing its economy, although challenges such as limited infrastructure and the need for regulatory reforms persist.