Faroe islands Country Summary

The Faroe Islands is an autonomous territory within the Kingdom of Denmark. Information for Denmark may be included below:

FATF Status

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

Compliance with FATF Recommendations

The latest follow up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Denmark was undertaken in February 2021. According to that Evaluation, Denmark was deemed Compliant for 6 and Largely Compliant for 32 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

Denmark is recognized as the least corrupt country globally, with a strong legal framework against corruption, including penalties for violations. However, a recent OECD report indicates that Denmark prioritizes domestic corruption over foreign bribery, leading to insufficient detection and prosecution of foreign bribery cases. The report recommends that Denmark enhance its strategies to combat foreign bribery, despite acknowledging some positive developments, such as the first foreign bribery conviction in 2019 and increased awareness among large companies.

The economy of the Faroe Islands is predominantly driven by the fishing industry, which constitutes approximately 90% of exports, while sectors such as tourism and information technology are on the rise. In 2023, the real GDP per capita was estimated at $70,400, indicating strong economic performance, although the economy's heavy reliance on fishing and fish farming makes it vulnerable to fluctuations in these industries.

The investment climate in the Faroe Islands is marked by a high degree of autonomy in trade and economic policy, enabling independent agreements with other nations. The government is actively promoting new business projects, especially in information technology, to diversify the economy and attract foreign investment. Despite the risks associated with reliance on key sectors, the islands' stability and low unemployment rates make them an appealing destination for investors.