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 has established a robust legal and institutional framework to combat corruption, highlighted by the presence of the Anti-Corruption Commission (ACC), which actively investigates and prosecutes corruption cases despite facing resource constraints. While there are provisions in place to promote transparency and accountability, concerns about selective enforcement and limited civil society engagement persist, indicating a need for further strengthening of anti-corruption efforts.

In terms of crime, Bhutan faces challenges such as human trafficking, gold and timber smuggling, and drug trafficking, often linked to cross-border activities with India and the involvement of foreign organized crime groups. The resilience of Bhutan's governance and criminal justice systems in addressing these issues remains unclear, with limited information available on their effectiveness and the role of civil society in combating organized crime.

Bhutan's economy has shown consistent growth, recently achieving the status of a developing nation after graduating from the UN's list of Least Developed Countries in 2023. The government is actively pursuing foreign direct investment (FDI) through liberalization of its investment policies and aims to attract $5.9 billion in FDI by 2029, with significant projects already approved in sectors like hydropower, tourism, and technology. Despite challenges such as a mountainous landscape and a shortage of skilled labor, Bhutan's commitment to sustainable development and its strategic initiatives, including the Gelephu Mindfulness City project, position it as an increasingly attractive destination for investors in South Asia.