FATF status

Vanuatu was removed from the FATF List of Countries that have been identified as having strategic AML deficiencies on 29 June 2018.

Latest FATF Statement - 29 June 2018

The FATF welcomes Vanuatu's significant progress in improving its AML/CFT regime and notes that Vanuatu has established the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2016. Vanuatu is therefore no longer subject to the FATF’s monitoring process under its ongoing global AML/CFT compliance process. Vanuatu will work with APG to improve further its AML/CFT regime.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Vanuatu was a follow-up Evaluation that took place in August 2018. According to that Evaluation, Vanuatu was deemed Compliant for 18 and Largely Compliant for 19 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Vanuatu's economy is classified as lower-middle income, heavily reliant on subsistence agriculture and tourism, which makes it vulnerable to environmental challenges. Agriculture employs about 65% of the population, with key exports including copra, kava, and beef, while tourism serves as a significant revenue source. The country faces economic hurdles such as high public debt at 87.07% of GDP and challenges related to inflation and recovery from the COVID-19 pandemic.

Vanuatu's investment climate is shaped by its strategic location and membership in various international organizations, which can enhance trade and investment opportunities. However, political instability and frequent government changes create an unpredictable environment that may deter potential investors. Despite being recognized as a tax haven attracting foreign investments, particularly in financial services and tourism, challenges related to transparency and governance persist.