FATF Status

The West Bank/Gaza Strip is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

A Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards has not yet been undertaken for the West Bank/Gaza Strip.

A September 2022 poll by the Coalition for Integrity and Accountability (AMAN) revealed that the Palestinian public perceives favoritism and nepotism as the most prevalent forms of corruption, particularly within government institutions. While the Anti-Graft Law of 2005 aims to combat corruption, the belief that access to power is essential for business success remains widespread. Despite low reported instances of bribery, civil society and organizations like AMAN actively promote anti-corruption efforts and raise public awareness.

The Palestinian economy in the West Bank is characterized by a nominal GDP of just over $19 billion as of 2022, with significant reliance on Israel for trade, as approximately 90% of exports are directed there. Following the events of October 7, 2023, the region experienced a severe economic downturn, marked by increased restrictions on movement and access, a sharp decline in GDP, and rising unemployment rates, which reached 29% in the West Bank and 74% in Gaza by the end of 2023.

The investment climate in the West Bank is significantly hindered by ongoing political and economic uncertainty, exacerbated by increased restrictions on movement and access following the events of October 7, 2023. Foreign direct investment (FDI) remains low, constituting only 1 percent of GDP, and is primarily directed towards non-trade activities with limited productivity. Despite recent legislative reforms aimed at improving the business environment, such as the updated Companies Law, the overall investment landscape is constrained by high transaction costs and reliance on the Israeli market.