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

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 Republic of the Marshall Islands was undertaken by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, The Republic of the Marshall Islands was deemed Compliant for 5 and Largely Compliant for 16 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

Corruption remains a significant issue in the Marshall Islands, with credible allegations of government fund misuse and abuse of public office for personal gain. Government procurement processes are particularly susceptible to corruption, and officials can invest in private businesses without conflict-of-interest oversight. This environment has deterred both domestic and international firms from pursuing business opportunities, despite the country's commitment to combating corruption through its accession to the UN Convention against Corruption.

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, reflecting a real growth rate of 1.1 percent. 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 sectors 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 such as fisheries, aquaculture, tourism, and renewable energy. However, foreign investors face challenges due to laws that restrict land ownership to citizens, requiring them to lease land from local landowners, and the high costs associated with the country's remoteness and limited infrastructure. Despite these hurdles, the government offers certain incentives for foreign investment, although significant foreign direct investment has been limited in recent years.