Portugal Country Summary

FATF Status

Portugal 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 Portugal was undertaken by the Financial Action Task Force (FATF) in 2017. According to that Evaluation, Portugal was deemed Compliant for 12 and Largely Compliant for 22 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 6 of the Effectiveness & Technical Compliance ratings.

Portugal has made legislative progress in combating corruption, with a January 2024 report indicating that only three out of fifteen anti-corruption recommendations from GRECO were fully implemented by the end of 2023. Despite this, U.S. firms do not view corruption as a barrier to investment, and the government has established independent bodies to prevent corruption and promote transparency. However, Portugal faces challenges with organized crime, human trafficking, and financial crimes, while its justice system remains stable amidst ongoing concerns about corruption and the effectiveness of law enforcement.

Portugal's economy experienced a robust growth rate of 2.3% in 2023, following a remarkable 6.7% growth in 2022, largely driven by the tourism and real estate sectors. The unemployment rate stood at 6.5% in 2023, reflecting a resilient labor market, while inflation was recorded at 4.3%. The government has made significant strides in reducing fiscal debt, bringing sovereign debt down to 99% of GDP in 2023, although political instability poses risks to future economic performance.

Portugal maintains an open-door policy towards foreign direct investment (FDI), treating foreign and domestic investors equally under non-discrimination principles. The government has established the Portuguese Agency for Foreign Investment and Commerce (AICEP) to facilitate trade and investment, while also implementing measures to reduce bureaucracy and streamline business registration processes. Recent developments include a significant increase in U.S. FDI inflows, which quadrupled to €2.1 billion in 2023, highlighting the country's attractiveness for foreign investors.