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 acceding to the UN Convention against Corruption in 2007, the Maldives has struggled with corruption, evidenced by its decline to 93rd on the Transparency International Corruption Perceptions Index in 2023, despite an increase in its score. Efforts to combat corruption have included the establishment of the Anti-Corruption Commission and regulations to limit business transactions with individuals linked to government officials, although enforcement remains weak and the commission has faced challenges, including a high backlog of cases. While domestic human rights groups operate with some freedom, government cooperation is often lacking, highlighting ongoing issues in governance and transparency.

The economy of the Maldives is heavily reliant on tourism, which contributes nearly 30% to the GDP and accounts for over 60% of foreign currency earnings. Following a significant decline due to the COVID-19 pandemic, the tourism sector has shown signs of recovery, with 1.88 million tourist arrivals in 2023 and an estimated economic growth of 6.5% for the year, the highest in South Asia. Despite these positive indicators, challenges such as income inequality and high debt levels persist, with the debt-to-GDP ratio improving from 138% in 2020 to 113% in 2023.

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 connected local businesses deter some foreign investors. In 2023, there were 30 new foreign direct investments, with a significant portion in tourism, indicating ongoing interest despite these challenges.