British Indian Ocean Territory Country Summary

The British Indian Ocean Territory is a British Overseas Territory of the United Kingdom. As such, we are including the information for the United Kingdom below:

FATF Status

The United Kingdom 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 the United Kingdom was undertaken in 2022. According to that Evaluation, the United Kingdom was deemed Compliant for 24 and Largely Compliant for 15 of the FATF 40 Recommendations. It remains rated Highly Effective for 4 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.

The British Indian Ocean Territory, as a British Overseas Territory, reflects the broader context of crime and corruption in the United Kingdom. While there are isolated instances of bribery and corruption, the UK has established a robust legal framework, including the Bribery Act 2010, to combat these issues and ensure accountability among public officials and businesses.

In terms of resilience to crime, the UK government demonstrates a commitment to tackling organized crime, supported by a well-resourced law enforcement system led by the National Crime Agency. However, challenges such as public trust issues, the complexities introduced by Brexit, and the ongoing threat of various criminal activities, including drug trafficking and cybercrime, highlight the need for continued vigilance and improvement in governance and community support systems.

The economy of the British Indian Ocean Territory is predominantly driven by the military presence on Diego Garcia, which significantly shapes its economic landscape. With limited industrial and agricultural activities, the territory's economic output is largely dependent on US and UK military installations, and recent developments such as increased oil exports and the establishment of a marine reserve have further influenced its economic dynamics. The investment climate is constrained by the lack of a permanent population and local governance, making it challenging for private investment and economic diversification beyond military contracts and services.