Compliance with FATF Recommendations

It should be noted that the new style FATF Mutual Evaluation has not yet been undertaken.

The initial Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Sao Tome was undertaken in 2013. According to that Evaluation, Sao Tome was deemed Compliant for 0 and Largely Compliant for 2 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

Despite the government's efforts to combat corruption, including the implementation of an anti-corruption law and reforms in customs processes, São Tomé and Príncipe (STP) still faces significant challenges, as evidenced by its drop in the Transparency International Corruption Perception Index. A survey indicated that over 70% of respondents believe corruption is on the rise, highlighting ongoing concerns. Although the government has pledged to address these issues and plans to establish an Anti-Corruption Committee, the absence of a dedicated agency for combating corruption remains a notable gap.

São Tomé and Príncipe (STP) is working to enhance its investment climate, relying heavily on foreign donors for approximately 90% of its public investment budget due to limited domestic revenue sources. The government has initiated a four-year agenda aimed at fostering sustainable economic growth, improving infrastructure, and increasing citizens' purchasing power, while also implementing new laws to boost government revenue and attract foreign direct investment, particularly in renewable energy. Despite these efforts, challenges such as high inflation, inadequate infrastructure, and a fragile domestic market continue to hinder foreign investment opportunities.

São Tomé and Príncipe has made significant efforts to enhance its investment climate, focusing on combating corruption and fostering a transparent business environment to attract foreign direct investment (FDI). Recent legislative measures, including the introduction of a Value-Added Tax and a Temporary Law on Investment Incentives, aim to boost government revenue and encourage private investment, particularly in renewable energy. However, challenges such as a small domestic market, inadequate infrastructure, and high costs of credit continue to hinder foreign investors.