Djibouti Country Summary

FATF Status

Djibouti is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Djibouti was undertaken in 2024. According to that Evaluation, Djibouti was deemed Compliant for 8 and Largely Compliant for 10 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Djibouti grapples with significant challenges related to corruption and crime, as evidenced by the lack of effective enforcement of anti-corruption laws and the prevalence of human trafficking and smuggling networks. Despite having established institutions aimed at combating corruption, their limited authority and the pervasive influence of high-level officials hinder meaningful reform, while the judiciary's lack of independence further exacerbates the situation.

Djibouti's economy, characterized by a lack of natural resources and a small population, heavily relies on foreign direct investment (FDI) to foster growth, particularly in the face of external challenges such as global shipping disruptions and regional conflicts. The government has identified key sectors for investment, including transport and logistics, energy, and tourism, while implementing reforms to enhance competitiveness and streamline business operations, such as the establishment of a one-stop shop for business registration. Despite these efforts, the investment climate is impeded by high costs of utilities, a high unemployment rate, and a lack of skilled labor, alongside concerns regarding transparency and bureaucratic hurdles that foreign investors must navigate.