Ethiopia Country Summary
Sanctions
Higher Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Medium Concern
US State ML Assessment
Lower Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
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Anti Money Laundering
FATF Status
Ethiopia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement - 18 October 2019
The FATF welcomes Ethiopia's significant progress in improving its AML/CFT regime and notes that Ethiopia has strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2017. Ethiopia is therefore no longer subject to the FATF's monitoring process under its ongoing global AML/CFT compliance process. Ethiopia will continue to work with ESAAMLG to improve further its AML/CFT regime.
Compliance with FATF Recommendations
The last follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Ethiopia was undertaken in 2022. According to that Evaluation, Ethiopia remained Compliant for 11 and Largely Compliant for 25 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
Sanctions
Ethiopia, as a UN member, must comply with sanctions imposed by the United Nations to maintain international peace and security. The UN Security Council has established various sanctions regimes since 1966, which include economic sanctions and targeted measures like arms embargoes and travel bans. These sanctions are increasingly mindful of the rights of those affected and are intended to support peaceful transitions rather than merely serve as punitive measures.
The US has implemented sanctions related to the humanitarian crisis in Ethiopia through Executive Orders and General Licenses, which facilitate certain international activities and transactions. Additionally, the US policy restricts the export of defense articles to Ethiopian security forces, reflecting a broader strategy to address human rights concerns in the region.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 37 |
| World Bank: Control of Corruption Percentile Rank | 37 |
Ethiopia's Federal Ethics and Anticorruption Proclamation aims to combat corruption among government officials and organizations, with the Federal Ethics and Anti-Corruption Commission overseeing ethics training and asset registration. Despite these efforts, corruption remains a significant issue, as reflected in Transparency International's 2023 Corruption Perceptions Index, where Ethiopia ranked 98 out of 180 countries. The government has established a national anti-corruption committee and a hotline for reporting corruption, yet challenges persist due to weak governance, political instability, and the prevalence of organized crime.
Economy
Ethiopia, with a population exceeding 120 million, is experiencing economic challenges exacerbated by drought, political unrest, and inflation rates around 30 percent. Despite these issues, the IMF projected a GDP growth of 6.1 percent in 2023, a recovery from previous years, while the government is attempting to attract foreign investment through new policies and the establishment of a stock exchange.
Ethiopia's investment climate is challenged by an acute foreign exchange shortage, unclear property rights, and bureaucratic delays, which hinder foreign companies' ability to operate effectively. Despite these challenges, the government has made efforts to attract foreign direct investment (FDI) through new investment laws and the establishment of a stock exchange, although investor interest remains low due to ongoing political instability and conflict. The largest sources of FDI come from China, Saudi Arabia, and Turkey, but insecurity and political tensions continue to deter potential investors.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings