Venezuela Country Summary

FATF Status

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

Latest FATF Statement - 21 February 2025

In June 2024, Venezuela made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime. Venezuela should continue working on implementing its FATF action plan to address its strategic deficiencies by: (1) strengthening its understanding of ML/TF risks, including in relation to TF and legal persons and arrangements; (2) ensuring the full range of financial institutions and DNFBPs are subject to AML/CFT measures and risk-based supervision; (3) ensuring adequate, accurate and up-to-date beneficial ownership information is accessible in a timely manner; (4) enhancing the resources of the FIU and improving competent authorities’ use of financial intelligence; (5) enhancing the investigation and prosecution of ML and TF; (6) ensuring measures to prevent the abuse of NPOs for TF are targeted, proportionate, and risk-based and do not disrupt or discourage legitimate activities within the NPO sector; and (7) implementing TF-and PF-related targeted financial sanctions without delay

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 faces significant challenges with corruption, despite having anti-corruption laws that are poorly enforced, as evidenced by its low ranking on Transparency International's corruption perceptions index. Corruption permeates various sectors, including government procurement and the foreign exchange regime, while NGOs investigating corruption face harassment and lack protection. Additionally, the country is a hub for human trafficking, arms trafficking, and drug production, with high-ranking officials reportedly collaborating with criminal organizations, contributing to a fragile state characterized by economic and political crises.

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 severe economic challenges, including a significant contraction of 16.5 percent in 2016 and an inflation rate that soared to over 2,000 percent in 2017, exacerbated by low global oil prices and government mismanagement. The investment climate is further hindered by political tensions, corruption, and a lack of transparency, leading to a restrictive environment for foreign investors.

Venezuela presents a challenging investment climate for foreign investors due to political tensions, state interventions, and a volatile regulatory framework. The government's increasing control over the economy, coupled with high inflation rates and economic contraction, has led to a decline in foreign investment, with many multinational firms reducing or ceasing operations. Recent laws, such as the 2017 Foreign Investment Law, have further complicated the landscape by imposing additional government controls and requirements on foreign investors.