Risk Indicators
- FATF/EU Blacklist/Greylist (Lower Concern)
- Terrorism Financing (Lower Concern)
- US Dept of State INCSR
- Proliferation Financing
- Corruption
- Criminality
- Resilience & Governance
- Financial Transparency
- Offshore Finance Centres
- Sanctions
Background
Seychelles emerged from an uninhabited island group into a French and later British colony, with a plantation economy shaped by imported labor before independence in 1976. Its post-independence trajectory included the 1977 coup led by France-Albert RENE, a period of socialist one-party rule, and constitutional reforms followed by multiparty elections in 1993. Leadership later passed through James Alix MICHEL and Danny FAURE before Wavel RAMKALAWAN’s 2020 victory marked the first presidential win by an opposition candidate.
Although geographically distinct, Seychelles exists within an Indian Ocean environment shaped by political instability, governance weaknesses, migration pressures, and sanctions-related risks. Nearby concerns range from Comoros’ constitutional tensions and passport-sale scandal to Madagascar’s banditry, Mauritius-linked maritime sanctions issues, Mayotte’s statelessness challenges, and Maldives’ sovereignty disputes. Together, these developments point to a regional setting in which institutional resilience, organized crime, and cross-border security concerns may carry significance for Seychelles.
AML & Terrorist Financing
Seychelles is not on the FATF list of jurisdictions with strategic AML deficiencies, but its 2026 follow-up assessment leaves it in enhanced follow-up, with technical progress not yet matched by highly or substantially effective outcomes. Risks linked to its international financial centre, offshore entities, non-resident clients, drug trafficking, corruption, virtual assets, and beneficial ownership remain significant, while supervisory resources, reporting levels, enforcement capacity, and inter-agency coordination present continuing challenges for bodies including the FIU, FSA, ACCS, and Seychelles Police. Terrorist-financing controls and proliferation-financing sanctions have been identified as particularly weak areas, with unresolved concerns involving delayed targeted financial sanctions, limited NPO risk oversight, and gaps in the implementation of newer technology-related measures.
Sanctions
Seychelles is obligated to implement UN Security Council sanctions, including measures involving asset restrictions, travel bans, and arms or commodity controls, but no international sanctions are currently in force against the country itself. Its offshore structures and maritime sector have nevertheless been associated with sanctions-evasion activity involving Russian, Iranian, Venezuelan, and other networks, including Seychelles-registered tankers, concealed ownership arrangements, and ship-to-ship transfers. Specific concerns extend to entities such as Alpha Consulting, Ascent General Insurance, VSK Insurance, and vessels including CORONA FUN, illustrating why Seychelles’ nominal compliance has attracted scrutiny from international authorities.
Criminality
Seychelles faces a varied crime landscape involving pervasive heroin use, human trafficking affecting foreign workers and children, emerging cyber fraud, and financial crimes such as embezzlement, tax evasion, and money laundering. Although the Anti-Corruption Commission of Seychelles has broad investigative powers and works with agencies including the Seychelles Revenue Authority and Central Bank, concerns remain over dormant complaints, limited convictions, and allegations involving senior officials and substantial foreign aid.
Reports
Seychelles remains a Tier 1 country, with increased trafficking investigations, convictions, victim referrals, and an expanded shelter, alongside inspections of migrant-worker conditions in the Seychelles International Trade Zone. Persistent concerns include delayed victim-status determinations, the unapproved fourth national action plan and unfunded Trafficking in Persons Fund, as well as exploitation involving children, online recruitment, migrant workers, fishing crews, and Cuban medical personnel.
Industry/Product Sector Risk
Seychelles’ financial and professional landscape is shaped by its international financial centre, with banking, correspondent relationships, currency exchange, money remittance, real estate, wealth management and trust and company services presenting varying degrees of exposure. The Financial Services Authority, Central Bank of Seychelles and Financial Intelligence Unit oversee key areas, while limited inspection coverage, non-resident customers, cash-intensive activity and complex ownership structures remain recurring themes. Further detail reveals how sectors ranging from casinos and luxury property to fisheries, hospitality, transportation and public works may intersect with corruption, fraud, tax offences, smuggling and other cross-border financial crime risks.
Economy & Investment Climate
Seychelles has a high-income, services-led economy centered on tourism and fishing, with recovery supported by rising visitor arrivals, resilient banking activity, and renewed growth in construction, technology, and finance after the pandemic shock. The Central Bank of Seychelles, Ministry of Finance, Seychelles Investment Board, and IMF are advancing reforms to reduce fiscal vulnerabilities and attract investment, while opportunities in blue-economy activities, renewable energy, offshore finance, and climate resilience remain balanced by inequality, limited economic scale, environmental constraints, and ongoing financial-transparency considerations.
Cryptocurrency Regulations
Seychelles has moved from a largely open digital-asset environment toward formal oversight under the Virtual Asset Service Providers Act, 2024, with the Financial Services Authority licensing exchanges and scrutinizing activities such as token offerings, while cryptocurrency remains outside the country’s legal-tender system. Compliance reaches across KYC, the FATF-aligned Travel Rule, daily reporting of transfers equivalent to SCR 50,000 or more, and restrictions on high-risk services—an approach shaped by a national assessment that identified virtual assets as presenting very high money-laundering and terrorist-financing risks.
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