Ethiopia Country Summary
Medium-High Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Medium Concern
US State ML Assessment
Lower Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Ethiopia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Ethiopia was undertaken in 2022. According to that Evaluation, Ethiopia remained Compliant for 11 and Largely Compliant for 25 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
Sanctions
The United States has imposed targeted Ethiopia-related sanctions since September 2021 under Executive Order 14046, including asset freezes, trade restrictions, and visa bans on individuals and entities linked to human rights abuses and obstruction of humanitarian aid in northern Ethiopia, and it designates the AL-HARAMAIN: ETHIOPIA BRANCH as an SDGT entity and maintains an arms embargo under ITAR. The United Kingdom maintains an arms embargo and transit controls, and the European Union has not imposed a comprehensive trade or arms embargo but has introduced visa restrictions since April 2024.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 38 |
| World Bank: Control of Corruption Percentile Rank | 37 |
Ethiopia faces significant challenges related to crime and corruption, exacerbated by political instability and weak governance structures. Despite the establishment of various anti-corruption laws and initiatives, such as the Federal Ethics and Anticorruption Proclamation and the Asset Recovery Law, corruption remains pervasive, particularly in public service delivery, land administration, and government procurement, undermining efforts to combat organized crime and protect vulnerable populations.
Economy
Ethiopia, the second most populous country in Africa, boasts a youthful demographic and low-cost labor, which are advantageous for its economic growth. However, the investment climate remains challenging due to persistent internal conflicts, particularly in the Amhara and Oromia regions, and a command economy legacy that hampers foreign direct investment (FDI). Despite recent macroeconomic reforms, including a floating exchange rate and efforts to liberalize various sectors, issues such as weak property rights, excessive taxation, regulatory uncertainty, and corruption continue to deter foreign businesses from investing in the country.
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