Micronesia Country Summary
Sanctions
No
FATF AML Deficient List
No but Mutual Evaluation not yet undertaken
Terrorism
Corruption
US State ML Assessment
Criminal Markets (GI Index)
EU Tax Blacklist
Offshore Finance Center
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF status
Micronesia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
Micronesia has not yet undertaken a Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards.
Sanctions
There are no international sanctions currently in force against this country
Bribery & Corruption
| Rating | 0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | NA |
| World Bank: Control of Corruption Percentile Rank | 78 |
The Federated States of Micronesia (FSM) has laws against corruption, with the National Office of the Public Auditor and the Department of Justice actively involved in anti-corruption efforts. Several senior officials have been convicted of corruption, including a government transportation official who pled guilty to money laundering related to bribes. Despite these measures, the prevalence of bribery among government officials is believed to be common, and there is a lack of dedicated agencies to combat corruption, with state prosecutors handling most cases.
Economy
The Federated States of Micronesia (FSM) is a lower middle-income nation with a GDP of approximately USD 336.4 million in 2017, primarily driven by commercial fishing and government employment, with Compact funding from the U.S. accounting for a significant portion of the economy. Despite a trade deficit and low foreign direct investment due to restrictive ownership laws and a weak financial sector, the FSM has established its own trust fund to support future development after Compact funding changes in 2023.
The investment climate in the Federated States of Micronesia (FSM) is characterized by significant structural impediments, including prohibitions on foreign ownership of land and businesses, a complicated company registration process, and weak enforcement of contracts. Foreign direct investment (FDI) is limited, with most sectors requiring local ownership and residency, and the lack of a dedicated government agency to promote investment further hampers economic progress. Additionally, the high cost of doing business, driven by remoteness and reliance on imports, along with low domestic capital formation, contributes to a challenging environment for potential investors.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings
