Ecuador Country Summary

FATF Status

Ecuador is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 23 October 2015

The FATF welcomes Ecuador’s significant progress in improving its AML/CFT regime and notes that Ecuador has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2010. Ecuador is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Ecuador will work with GAFILAT as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Ecuador was undertaken in 2022. According to that Evaluation, Ecuador was deemed Compliant for 10 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Mutual Evaluation Report Recommendation Ratings

Corruption remains a significant issue in Ecuador, with high-profile convictions of officials, including former presidents, and ongoing arrests of judicial and political figures. Despite legal frameworks aimed at combating corruption, such as the establishment of specialized courts and anti-corruption legislation, challenges persist due to a lack of transparency and inefficiencies in the judicial system. The presence of organized crime, including drug trafficking and human smuggling, further complicates the situation, as corrupt officials often facilitate these activities, undermining governance and public trust.

Ecuador's economy is characterized by significant investment opportunities in sectors such as agriculture, aquaculture, mining, and energy, yet it faces challenges including economic stagnation, fiscal deficits, and political instability. Foreign direct investment (FDI) has declined sharply, with 2023 FDI flows at $372.3 million, a 58% decrease from the previous year, reflecting ongoing uncertainties in the political landscape. Despite efforts by recent administrations to reform protectionist policies and attract investment, the country continues to grapple with fiscal and security crises that hinder economic stability.

Ecuador's investment climate presents numerous opportunities, particularly in sectors like agriculture, aquaculture, mining, and energy. However, challenges such as economic and political uncertainty, interventionist policies, and fiscal constraints have hindered foreign direct investment (FDI), which saw a significant drop to $372.3 million in 2023. Recent reforms by the Noboa administration aim to attract investment and stabilize the economy, but ongoing fiscal and security crises continue to pose significant challenges.