Bhutan

Sanctions

No

FATF AML Deficient List

No

Higher Risk

Not on EU White list equivalent jurisdictions

Failed States Index (Political Issues)(Average Score)

Medium Risk

Compliance with FATF 40 + 9 Recommendations 
Weakness in Government Legislation to combat Money Laundering (info not available)
Corruption Index (Transparency International & W.G.I.))
World Governance Indicators (Average Score)

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ANTI-MONEY LAUNDERING

 

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 2018. According to that Evaluation, Bhutan was deemed Compliant for 8 and Largely Compliant for 16 of the FATF 40 Recommendations. 

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           68

World Governance Indicator – Control of Corruption             92

Corruption is not an obstacle for businesses investing in Bhutan. The government is faring well in keeping the levels of corruption at a low level in comparison to neighboring South Asian countries. The idea of serving the state and the king is an integral part of civil service and has contributed to constraining public corruption. However, the public procurement sector carries risks as favoritism exists. The Anti-Corruption Act criminalizes several forms of corruption, such as abuse of office and passive and active bribery in both the public and the private sectors. As a general rule, the government effectively enforces anti-corruption regulation. For further information - GAN Integrity Business Anti-Corruption Portal

 

 

ECONOMY

Bhutan's economy, small and less developed, is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half of the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Bhutan inked a pact in December 2014 to expand duty-free trade with Bangladesh, the only trade partner with which Bhutan enjoys a surplus.

Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan currently taps only 5% of its 30,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. However, Bhutan and India in April 2014 agreed to begin four additional hydropower projects, which would generate 2,120 megawatts in total. Bhutan also is exploring energy exports to Bangladesh.

Agriculture - products:

rice, corn, root crops, citrus; dairy products, eggs

Industries:

cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism

Exports - commodities:

electricity (to India), ferrosilicon, cement, calcium carbide, copper wire, manganese, vegetable oil

Exports - partners:

India 83.8%, Hong Kong 10.8% (2013 est.)

Imports - commodities:

fuel and lubricants, passenger cars, machinery and parts, fabrics, rice

Imports - partners:

India 72.3%, South Korea 6% (2013 est.)

Country Links
Royal Monetary Authority of Bhutan
Bhutan Business Licence e-Portal
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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