FATF status

Venezuela is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Venezuela was undertaken in 2023. According to that Evaluation, Venezuela was deemed Compliant for 0 and Largely Compliant for 9 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Venezuela has established anti-corruption laws, yet their enforcement is notably weak, contributing to the country's low ranking in Transparency International's corruption perceptions index. Corruption is pervasive across various sectors, including government procurement and the regulatory system, with the government often selectively investigating corruption for political motives. Despite signing the UN Convention against Corruption, Venezuela has not adopted the OECD Convention on Combating Bribery, and the ineffective judiciary further exacerbates the issue, allowing corrupt practices to flourish with little accountability.

Venezuela's economy is heavily reliant on the petroleum industry, which accounts for approximately 94 percent of export earnings and 40 percent of government revenues. The country has faced a severe economic crisis characterized by significant contractions in GDP, soaring inflation rates exceeding 13,000 percent in 2018, and widespread shortages of consumer goods, exacerbated by low global oil prices and chronic mismanagement. The regulatory environment is restrictive for foreign investors, with increasing state control and interventions further complicating the investment landscape.

Venezuela presents a highly restrictive investment climate for foreign investors, characterized by political tensions, state interventions, and a volatile regulatory framework. The government's increasing control over the economy, coupled with severe economic contraction and hyperinflation, has led to a significant decline in foreign investment, with many multinational firms reducing or ceasing operations due to challenges such as limited access to hard currency and price controls. Recent laws have further complicated the investment landscape, imposing additional government control and creating uncertainty for potential investors.