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 significant strides in combating corruption, evidenced by a drop in public concern from 23.5% in 2020 to just 1.4% in 2022, alongside improvements in Transparency International's 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 initiatives, such as the draft Law on the Register of Beneficial Owners, aim to enhance transparency and accountability in public procurement, yet challenges remain in the judicial system and the overall investment climate.

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 IMF and World Bank project a GDP growth of around 4.0 percent for 2024, although the economy faces constraints from a large informal sector, high unemployment rates, and limited foreign direct investment. While remittances from the diaspora significantly contribute to the GDP, the government is working to improve the investment climate by simplifying business registration and addressing bureaucratic hurdles.

Kosovo's investment climate is characterized by efforts to improve 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, particularly with Serbia, and inconsistent government policies continue to hinder the attraction of more substantial foreign investments.