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 strong sense of duty among civil servants. While the government effectively enforces anti-corruption laws, risks remain in the public procurement sector due to favoritism. The Anti-Corruption Act addresses various corrupt practices, ensuring accountability in both public and private sectors.

Bhutan's economy is primarily driven by agriculture, forestry, tourism, and hydroelectric power, with agriculture serving as the main livelihood for over half of its population. The country has a GDP of approximately $5.855 billion and benefits from significant investments in hydropower, making it a key electricity exporter to India, which is crucial for its economic growth.

Bhutan's investment climate is improving due to government initiatives aimed at attracting foreign investment, particularly in hydropower and technology sectors. The establishment of a free trade agreement with India facilitates easier access for Bhutanese goods and services in the Indian market, which is vital for economic growth. Additionally, Bhutan's focus on sustainable development and infrastructure modernization enhances its attractiveness to investors interested in green technologies and renewable energy projects.