FATF Status

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

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Djibouti was undertaken in 2024. According to that Evaluation, Djibouti was deemed Compliant for 8 and Largely Compliant for 10 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Djibouti has established laws to combat corruption among public officials, but there is a lack of enforcement and prosecution, with no recorded cases of corruption being addressed. Despite being a signatory to the UN Convention against Corruption, the country's institutions responsible for investigating and reporting corruption lack the authority to implement meaningful reforms. While U.S. firms do not cite corruption as a significant barrier to investment, there are allegations of coercive practices related to government contracts, and overall, the prosecution of corruption remains rare.

Djibouti's economy is characterized by its strategic location and reliance on foreign direct investment (FDI) to drive growth, particularly in sectors such as transport, logistics, and energy. Despite facing challenges like high unemployment and electricity costs, the government has implemented reforms to enhance competitiveness and attract investment, aiming for GDP growth of 5.1% in 2024 and 5.7% in 2025.

Djibouti's investment climate is characterized by a strong government push for foreign direct investment (FDI) to drive economic growth, supported by its strategic location and various reforms aimed at improving competitiveness. While the country encourages FDI and offers favorable tax terms, challenges such as high electricity costs, regional instability, and bureaucratic complexities remain significant hurdles for investors. The National Investment Promotion Agency (NIPA) plays a crucial role in facilitating investment operations and modernizing the regulatory framework.