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 satisfactorily implemented by the end of 2023. While U.S. firms do not view corruption as a significant barrier to investment, issues persist, particularly at the municipal level, where corruption is most prevalent in urban planning and public procurement. The government has established various laws and independent bodies to enhance transparency and accountability, yet recurring scandals suggest that existing safeguards may not be fully effective.

Portugal's economy experienced a robust growth rate of 2.3% in 2023, following a remarkable 6.7% growth in 2022, primarily driven by the tourism and real estate sectors. The labor market remains resilient with an unemployment rate of 6.5%, while inflation is projected to decrease to 2.9% in 2024. Despite these positive indicators, the country faces challenges such as rising housing costs and a significant emigration rate of highly qualified workers.

Portugal maintains an open-door policy towards foreign direct investment (FDI), with no legal restrictions on foreign investment except in sensitive sectors. The government actively promotes FDI through the Portuguese Agency for Foreign Investment and Commerce (AICEP), which provides support and incentives tailored to investors' needs. In 2023, U.S. FDI inflows to Portugal quadrupled to €2.1 billion, highlighting the country's attractiveness for foreign investors.