Somalia Country Summary
Sanctions
UN, EU and US sanctions in place
FATF AML Deficient List
No, but not yet undertaken a Mutual Evaluation
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.
If you would like a demo of our Subscription area, please reserve a day/time that suits you best using this link, or you may Contact Us for further information.
Anti Money Laundering
FATF status
Somalia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
Somalia has not yet undertaken a Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards.
Sanctions
Somalia, as a UN member, must adhere to sanctions aimed at maintaining international peace and security, which include various measures like arms embargoes and travel bans. The UN Security Council has established multiple sanctions regimes since 1966, with 15 currently active, focusing on political settlements, nuclear non-proliferation, and counter-terrorism efforts.
Recent developments include the lifting of the arms embargo on the Somali government and the renewal of sanctions against Al-Shabaab, which includes bans on arms imports and charcoal exports. Additionally, the U.S. has imposed targeted sanctions under Executive Orders to address threats to Somalia's stability, while the EU enforces strict regulations on arms exports and asset freezes related to designated individuals.
Bribery & Corruption
| Rating | 0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 11 |
| World Bank: Control of Corruption Percentile Rank | 0 |
Somalia faces severe corruption challenges, with the provisional constitution criminalizing various corrupt practices, yet implementation remains ineffective. The Federal Government of Somalia (FGS) established an anti-corruption commission in 2019, but it was disbanded in 2022 due to legal procedural issues, and efforts to reconstitute it are ongoing. Despite laws requiring open tender processes for government contracts, enforcement is lax, leading to rampant corruption, particularly in procurement, and Somalia ranks last in Transparency International's 2022 Corruption Perceptions Index.
Economy
Somalia's economy is gradually rebuilding after decades of conflict, with real GDP growth projected at 3.1% in 2023, driven by opportunities in agriculture, fisheries, and livestock. However, the business environment remains challenging due to a lack of legal frameworks, corruption, and threats from the al-Shabaab terrorist group, which complicate foreign direct investment efforts. Despite these obstacles, the government is focused on economic reforms and enhancing domestic revenue mobilization to support growth.
The investment climate in Somalia is characterized by a welcoming stance towards foreign direct investment, particularly in sectors like agriculture, fisheries, and livestock. However, potential investors face significant challenges, including a lack of a comprehensive legal framework, a weak judicial system, endemic corruption, and threats from the al-Shabaab terrorist group. Despite these obstacles, the government has made strides in regulatory reforms and has established the Somalia Investment Promotion Office to facilitate foreign investment.
Buy Full Somalia Report
$125 one time payment
- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings
