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 corruption issues in the Marshall Islands, including allegations of government fund misuse and conflicts of interest due to officials' ability to own private businesses. Corruption is seen as a major barrier for both domestic and international firms considering investment in the region, with reports of financial irregularities in foreign aid. Despite the country's commitment to the UN Convention against Corruption, the lack of oversight organizations exacerbates the problem.

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. Key industries include wholesale/retail trade, commercial fisheries, and tourism, but the economy faces challenges due to its remoteness, limited agricultural capacity, and vulnerability to external shocks.

The investment climate in the Marshall Islands is characterized by a government keen on attracting foreign investment, particularly in sectors like fisheries, tourism, and renewable energy. However, foreign investors face challenges due to laws restricting land ownership, high operational costs stemming from the country's remoteness, and limited infrastructure. Despite these hurdles, the government offers certain incentives for foreign investments, although significant foreign direct investment has been limited in recent years.