Bhutan Country Summary

FATF Status

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

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bhutan was undertaken in 2023. According to that Evaluation, Bhutan was deemed Compliant for 7 and Largely Compliant for 26 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Bhutan faces several challenges related to crime and corruption, including human trafficking, gold and timber smuggling, and drug trafficking, with organized crime networks operating both locally and across its borders with India. While the effectiveness of Bhutan's governance and criminal justice systems in combating these issues is not clearly outlined, the presence of foreign organized crime groups, particularly in illegal logging, indicates a growing complexity in the country's crime landscape.

Bhutan's economy is predominantly driven by agriculture, forestry, tourism, and hydroelectric power, with agriculture serving as the primary source of livelihood for over half of its population. The country has witnessed rapid economic growth, largely fueled by investments in hydropower, making it one of the fastest-growing economies in the world, with significant reliance on hydropower exports to India. The investment climate is improving due to government initiatives aimed at attracting foreign direct investment, particularly in hydropower and technology sectors, while also focusing on sustainable development to preserve its cultural and environmental heritage.