FATF status

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

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in the Marshall Islands was undertaken in 2024. According to that Evaluation, the Marshall Islands was deemed Compliant for 14 and Largely Compliant for 21 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

The US State Department's Investment Climate Statement for 2024 highlights significant concerns regarding corruption in the Marshall Islands, particularly in government procurement and the misuse of public office for personal gain. Allegations of financial irregularities and abuse of foreign aid have been reported, with domestic and international firms citing corruption as a major barrier to investment. Additionally, there are no active watchdog organizations to monitor these issues, further complicating the business environment.

The Republic of the Marshall Islands (RMI) has a small economy with an annual GDP of approximately USD 259 million and a per capita GDP of USD 6,172. The economy is heavily reliant on government employment and donor funding, particularly from the United States, which has provided over USD 1 billion in assistance since 2004. The primary sectors include subsistence agriculture, commercial fisheries, and a modest service-oriented urban economy, but the country faces challenges such as limited production capacity, trade deficits, and vulnerability to external economic shocks.

The investment climate in the Marshall Islands is characterized by a government keen on attracting foreign investment, particularly in sectors like fisheries, aquaculture, and tourism, despite facing significant challenges such as land ownership laws that restrict non-Marshallese from purchasing land. Foreign businesses must lease land from private owners, and high operational costs due to the country's remoteness and limited infrastructure further complicate investment efforts. Additionally, while the government offers certain incentives for foreign investors, the overall foreign direct investment landscape remains constrained, with most investments concentrated in the fisheries sector.