FATF Status

Madagascar 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 Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Madagascar was undertaken in 2024. According to the follow-up Evaluation, Madagascar was deemed Compliant for 9 and Largely Compliant for 14 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective 0 of the Effectiveness ratings.

In 2023, Madagascar ranked 145 out of 180 countries on the Transparency International Corruption Perceptions Index, highlighting a rise in corruption, particularly within the judiciary, police, and mining sectors. Despite the establishment of various anti-corruption agencies, such as BIANCO and the Anti-Corruption Court, investigations often focus on lower-level corruption, leaving high-level officials largely unaccountable. U.S. companies operating in Madagascar face significant challenges due to pervasive corruption, which hinders foreign direct investment and complicates compliance with anti-bribery laws.

Madagascar's economy is characterized by a young and growing workforce, abundant natural resources, and promising sectors such as textiles, mining, energy, and telecommunications. Despite the government's public welcome of foreign direct investment (FDI), the investment climate is perceived as challenging due to issues like corruption, regulatory hurdles, and bureaucratic delays, leading to a significant decrease in FDI from 22 percent of GDP in 2010 to 10 percent in 2020.

Madagascar's investment climate is characterized by a welcoming stance towards foreign direct investment (FDI), yet it faces significant challenges, including widespread corruption and bureaucratic inefficiencies. Although laws permit 100% foreign ownership and there are no general restrictions on foreign control, investors often encounter discriminatory practices and delays in government approvals, particularly for larger projects that require presidential consent. The recent decline in FDI as a percentage of GDP, alongside the government's introduction of new taxes and fees, further complicates the investment landscape.