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 heavily reliant on subsistence agriculture and tourism, with agriculture supporting approximately 65% of the population. The country has experienced a real GDP growth rate of 2.21% in 2023, but remains vulnerable due to its dependence on a limited range of exports, such as copra and kava, alongside a public debt that stands at 87.07% of GDP.

Vanuatu's investment climate is marked by its status as a tax haven, featuring no income tax and a favorable regulatory environment for international businesses. However, concerns regarding governance and political instability have diminished its attractiveness to foreign investors, as evidenced by its low ranking of 173rd in the 2011 Euromoney Country Risk rankings. Despite efforts to enhance transparency and governance, frequent government changes continue to affect investor confidence.