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.

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 prevalent, particularly in tax collection, customs, and land administration, with Ethiopia ranking 98 out of 180 countries on Transparency International's 2023 Corruption Perceptions Index. The government has established a national anti-corruption committee and a hotline for reporting corruption, but enforcement of anti-corruption laws is often lacking.

Ethiopia, with a population exceeding 120 million, is experiencing economic challenges exacerbated by drought, political unrest, and inflation hovering around 30 percent. Despite these issues, the IMF projected a GDP growth of 6.1 percent in 2023, a recovery from the previous year, 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) by liberalizing certain sectors and allowing offshore accounts for strategic investments. However, ongoing political instability and insecurity, particularly due to ethnic conflicts, continue to dissuade potential investors.