Venezuela Country Summary
Sanctions
EU & US sanctions in place
FATF AML Deficient List
No
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.
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Anti Money Laundering
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.
Sanctions
Venezuela, as a UN member, must comply with sanctions imposed by the UN Security Council to maintain international peace and security. Since 1966, the Security Council has established 31 sanctions regimes, which include various measures like economic sanctions and arms embargoes, with a focus on protecting the rights of those targeted.
Recently, the U.S. Treasury issued General Licenses to suspend certain sanctions in response to a political agreement in Venezuela, while the EU extended its restrictive measures for six months to encourage democratic solutions. Both sanctions regimes aim to support the restoration of democracy and human rights in Venezuela, with flexibility to adjust based on the country's progress.
Bribery & Corruption
| Rating | 0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 13 |
| World Bank: Control of Corruption Percentile Rank | 1 |
Venezuela has established anti-corruption laws, but their enforcement is weak, leading to a high level of corruption across various sectors, including government procurement and the foreign exchange regime. Despite signing the UN Convention against Corruption, the country has not adopted the OECD Convention on Combating Bribery, and the legal framework lacks provisions for bribery of foreign officials. Corruption remains a significant barrier for businesses, with widespread bribery and a judiciary that fails to effectively address these issues.
Economy
Venezuela's economy is heavily reliant on its petroleum industry, which accounts for approximately 94 percent of export earnings and 40 percent of government revenues. The country has faced severe economic challenges, including a significant contraction of 16.5 percent in 2016 and an estimated inflation rate exceeding 13,000 percent in 2018, exacerbated by low global oil prices, corruption, and mismanagement in the oil sector. The investment climate remains restrictive due to political tensions, state interventions, and a lack of transparency, leading to a decline in foreign investment.
Venezuela presents a restrictive investment climate for foreign investors due to political tensions, state interventions, macroeconomic distortions, and a volatile regulatory framework. The government's increasing control over the economy, coupled with high inflation and economic contraction, has led to a significant decline in foreign investment, with many multinational firms reducing or ceasing operations. Recent laws have further complicated the investment landscape, imposing additional government control and creating uncertainty for potential investors.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings
