FATF status

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

Compliance with FATF Recommendations

It should be noted that the new style FATF Mutual Evaluation has not yet been undertaken.

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Maldives was undertaken by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, The Maldives was deemed Compliant for 1 and Largely Compliant for 0 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

Since joining the UN Convention against Corruption in 2007, the Maldives has struggled to improve its corruption perception, recently ranking 93rd on the Transparency International Corruption Perceptions Index. Despite some progress, such as a rise in its score from 29 to 43, corruption remains pervasive across society, hindering economic growth. The Anti-Corruption Commission, established in 2008, faces challenges due to weak enforcement of laws and a narrow definition of corruption, while recent government efforts to enhance transparency have seen mixed results.

The economy of the Maldives is heavily reliant on tourism, which contributes nearly 30% to the GDP and generates over 60% of foreign currency earnings. Despite a significant decline in 2020 due to the COVID-19 pandemic, the tourism sector has shown recovery, with 1.88 million tourist arrivals in 2023, and the economy is projected to grow by 6.5% in 2023, the highest in South Asia. However, challenges such as income inequality and limited employment opportunities persist, particularly for those in remote atolls.

The investment climate in the Maldives is characterized by an open policy towards foreign investment, particularly in the tourism and hospitality sectors, which dominate the economy. However, challenges such as ambiguous laws and competition from politically influential local businesses deter some foreign investors. In 2023, the country saw 30 new foreign direct investments, primarily in tourism, but the regulatory environment remains complex, with restrictions on foreign ownership in certain sectors and a lack of transparency in the investment approval process.