FATF Status

Costa Rica 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 follow-up relating to the implementation of anti-money laundering and counter-terrorist financing standards in Costa Rica was undertaken in 2024. According to that Evaluation, Costa Rica was deemed Compliant for 17 and Largely Compliant for 20 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness ratings.

US Department of State Money Laundering assessment (INCSR)

Costa Rica is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview  

Organized crime and narcotics trafficking remain primary drivers of money laundering and financial crimes in Costa Rica.  While Costa Rica perseveres in its anti-money laundering programing, in 2021 it faced scrutiny and challenges from the European Union (EU).  Through its action plan to work in concert with the EU, Costa Rica is addressing concerns and demonstrating its commitment to meet the ever-growing challenge money laundering represents.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           55

World Governance Indicator – Control of Corruption             67

Costa Rica is the oldest continuous democracy in Latin America and the newest member of the Organization for Economic Cooperation and Development (OECD), with an established government institutional framework, and a diversified upper-middle-income economy. The country’s well-educated labor force, relatively low levels of corruption, geographic location, living conditions, dynamic investment promotion board, and attractive free trade zone incentives all appeal to investors. Foreign direct investment inflow in 2022 as estimated by the Costa Rican Central Bank was USD 3.045 billion, or 4.45 percent of GDP, with the United States accounting for USD 2.23 billion (73 percent of total FDI). Costa Rica recorded 4.3 percent GDP growth in 2022 as it recovered from the effects of the Covid-19 pandemic.

Costa Rica has had remarkable success in the last two decades in establishing and promoting an ecosystem of export-oriented technology companies, suppliers of input goods and services, associated public institutions and universities, and a trained and experienced workforce. A similar transformation took place in the tourism sector, with a plethora of smaller enterprises handling an increasing flow of tourists eager to visit despite Costa Rica’s relatively high prices. Costa Rica is doubly fortunate in that these two sectors positively reinforce each other as they both require and encourage English language fluency, openness to the global community, and Costa Rican government efficiency and effectiveness. The FTZ economy continued to expand during the pandemic, while the tourism sector did contract but is rebounding. Total 2022 tourist arrivals of 2,349,537 represent more than double the 2020 pandemic low of 1,011,912 but are still only 75% of the 2019 pre-pandemic high.

The Costa Rican investment climate is threatened by a persistent, although currently shrinking government fiscal deficit, high unemployment (Q422, 11.7%) and underemployment (9.7%), high energy costs, deterioration of basic infrastructure, and underperformance in some key areas of government service provision, notably security, health care, and education. Costa Rica is operating under a stabilizing agreement with the International Monetary Fund (IMF) and generally managed the Covid-19 crisis well. Moreover, Costa Rica’s accession in 2021 to the Organization for Co-operation and Development (OECD) has exerted a positive influence by pushing the country to address its economic weaknesses through executive decrees and legislative reforms in a process that began in 2015. The Ministry of Foreign Trade (COMEX) has protected the Free Trade Zones (FTZs) from new taxes by highlighting the benefits of the regime, promoting local supply chains, and using the FTZs as examples for other sectors of the economy. President Rodrigo Chaves, an economist and former Minister of Finance, took office in May 2022. His administration has continued to prioritize the attraction of foreign direct investment and pursued a free trade posture, signing a new trade agreement with Ecuador and launching other negotiations.

Nevertheless, Costa Rica’s political and economic leadership faces a difficult balancing act over the coming years as the country must simultaneously exercise budget discipline and respond to demands for improved government-provided infrastructure and services.

Country Links

Central Bank of Costa Rica

Superintendencia General de Entidades Financieras (SUGEF)

Registro Nacional - República de Costa Rica

Financial Analysis Unit (Costa Rican Institute on Drugs) (UAF-Costa Rica)