Somalia Country Summary
Higher Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Medium Concern
Terrorism
Higher Concern
Corruption
Higher Concern
US State ML Assessment
Medium Concern
Criminal Markets (GI Index)
Higher 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
Somalia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
Somalia has not yet undertaken a Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards.
Sanctions
A UN sanctions regime continues to target Al-Shabaab in Somalia, while the general arms embargo on the Somali government was lifted in December 2023; remaining measures include an arms embargo against Al-Shabaab, a charcoal ban, an IED components ban, asset freezes and travel bans on designated individuals, and maritime interdiction. Beyond the UN framework, the United States, European Union, United Kingdom, Canada, Australia, New Zealand, Japan, and Switzerland implement UN sanctions on Somalia and add their own components such as national arms embargoes, asset freezes, travel bans, and charcoal and IED component restrictions, with humanitarian exemptions where applicable.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 9 |
| World Bank: Control of Corruption Percentile Rank | 1 |
Somalia faces significant challenges related to crime and corruption, with rampant corruption permeating all levels of government, particularly in procurement processes. The lack of a functioning anti-corruption commission and weak enforcement of existing laws exacerbate the situation, while criminal activities, including human trafficking and arms smuggling, are prevalent, often linked to groups like Al-Shabaab that exploit the country's instability for profit.
Economy
The economy of Somalia is gradually recovering from decades of conflict, with the Federal Government of Somalia (FGS) actively promoting foreign direct investment (FDI) in key sectors such as agriculture, fisheries, and livestock. Despite these efforts, the investment climate remains challenging due to a lack of comprehensive legal frameworks, ongoing security threats from the al-Shabaab terrorist group, and issues related to corruption and infrastructure. Nevertheless, recent economic reforms, including the successful completion of the Heavily Indebted Poor Countries (HIPC) process, have improved macroeconomic stability and opened avenues for new financing, which could bolster growth in various sectors, particularly as Somalia integrates into regional trade agreements like the East African Community (EAC).
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