FATF Status

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

Compliance with FATF Recommendations

A Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards has not yet been undertaken for Kosovo.

Kosovo has made strides in combating corruption, evidenced by a significant drop in public concern over the issue and improvements in its Corruption Perception Index. Despite strong anti-corruption legislation and the establishment of agencies like the Anti-Corruption Agency, the government struggles with effective enforcement and prosecution of corrupt practices. Recent measures, such as the draft Law on the Register of Beneficial Owners, aim to enhance transparency and accountability in public procurement, yet challenges remain due to inefficiencies in the judicial system and ongoing issues with bribery and lack of transparency.

Kosovo has an emerging market economy with a population of approximately 1.8 million, demonstrating resilience despite global challenges such as the pandemic and geopolitical tensions. The economy is projected to grow by around 4.0 percent in 2024, but it faces constraints from a large informal sector, high unemployment rates, and limited foreign direct investment, despite recent increases in FDI inflows. Key sectors include real estate, financial services, and energy, with significant reliance on diaspora remittances contributing to the GDP.

Kosovo's investment climate is characterized by efforts to simplify business registration and reduce bureaucratic hurdles, although challenges remain due to a large informal economy and high unemployment rates. Foreign Direct Investment (FDI) has seen modest growth, with net inflows reaching €816 million in 2023, primarily benefiting the real estate and leasing sectors. However, ongoing political tensions and inconsistent government policies continue to hinder investor confidence and the overall attractiveness of Kosovo as a destination for foreign investment.