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.

São Tomé and Príncipe (STP) has made significant strides in combating corruption, as evidenced by its improved ranking in Transparency International’s Corruption Perception Index and the implementation of an anti-corruption law in 2012. The government has modernized customs procedures, leading to increased revenues and reduced corruption incidents, while also adopting an AML/CFT law that aligns with international standards. Despite these efforts, STP lacks a designated agency to combat corruption, although it has ratified the UN Anticorruption Convention.

São Tomé and Príncipe (STP) has a developing economy with a GDP of approximately $418.6 million and a population of 215,056. The country relies heavily on foreign aid, with over 90% of its budget financed by international donors, including China and the World Bank. Despite efforts to improve the investment climate and attract foreign direct investment, challenges such as a weak domestic market and inadequate infrastructure persist.

São Tomé and Príncipe has made significant strides in enhancing its investment climate over the past decade, focusing on creating a transparent and corruption-free business environment to attract foreign direct investment (FDI). The government has enacted various laws, including a modern Labor Code and a Value Added Tax Law, and has established a one-stop shop for business registration to streamline processes for investors. Despite these improvements, challenges such as a small domestic market, inadequate infrastructure, and high costs of credit persist, making it difficult for foreign investors to identify viable opportunities.