El Salvador Country Summary

FATF Status

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

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in El Salvador was undertaken in 2024. According to the follow-up Evaluation, El Salvador was deemed Compliant for 6 and Largely Compliant for 25 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective 1 of the Effectiveness ratings.

El Salvador faces significant challenges related to crime and corruption, with criminal organizations deeply embedded in society and high levels of corruption affecting governance and public trust. While the current administration has made strides in prosecuting past officials for corruption, civil society organizations argue that corruption remains pervasive, particularly at higher levels of government, and there are concerns about the government's lack of transparency and the effectiveness of anti-corruption measures.

El Salvador's economy is bolstered by its strategic proximity to the United States, the adoption of the U.S. dollar, and favorable trade agreements like CAFTA-DR, which enhance its attractiveness for investment. The government, under President Bukele, has prioritized economic growth and job creation, leading to significant improvements in security and a notable rise in tourism, particularly from U.S. visitors. Despite these advancements, challenges remain, including a large informal sector, a labor force lacking essential skills, and regulatory inconsistencies that could deter foreign direct investment, which has seen a decline despite the government's efforts to streamline business processes and promote various sectors.