Djibouti Country Summary

FATF Status

Djibouti is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Djibouti was undertaken in 2024. According to that Evaluation, Djibouti was deemed Compliant for 8 and Largely Compliant for 10 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Djibouti faces significant challenges related to crime and corruption, with laws in place to combat these issues often lacking effective enforcement and transparency. Corruption is pervasive, affecting public procurement and governance, while the country also grapples with human trafficking, arms trafficking, and other illicit activities, compounded by a judiciary that lacks independence and capacity to address these crimes effectively.

Djibouti's economy is characterized by its strategic geographic location and reliance on foreign direct investment (FDI) to drive growth, particularly in sectors such as transport and logistics, real estate, energy, tourism, and agriculture. Despite facing challenges like high unemployment, a large informal sector, and regional instability, the government has implemented reforms to enhance the investment climate, including the establishment of a one-stop shop for business registration and revisions to the investment code aimed at improving transparency and competitiveness. While Djibouti actively encourages FDI and provides various incentives, investors must navigate a complex bureaucracy and contend with high electricity costs and a weak financial sector, which can hinder economic development.