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 former officials and ongoing arrests of judicial and political figures for corrupt practices. Despite the establishment of anti-corruption legislation and specialized courts, the judicial system suffers from inefficiency and a lack of transparency, complicating dispute resolution for businesses. U.S. companies have expressed concerns about corruption hindering investment, particularly regarding public tenders and the enforcement of arbitration awards.

Ecuador's economy presents significant investment opportunities, particularly in sectors such as agriculture, aquaculture, mining, and energy. However, the country faces challenges including economic stagnation, fiscal deficits, and political instability, which have hindered foreign direct investment (FDI), resulting in a notable decrease in FDI flows in 2023 compared to previous years. Despite recent reforms aimed at attracting investment, the government continues to grapple with dual fiscal and security crises that complicate efforts to stabilize the economy.

Ecuador's investment climate is characterized by significant opportunities in sectors such as agriculture, aquaculture, mining, and energy, yet it faces challenges from economic and political instability, interventionist policies, and fiscal constraints. Despite efforts by recent administrations to reform protectionist policies and attract foreign direct investment, FDI flows remain low, with a notable decline in 2023. The current government is focused on investment reforms, but ongoing fiscal and security crises continue to hinder progress.