Ecuador Country Summary

FATF Status

Ecuador is 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 Ecuador was undertaken in 2022. According to that Evaluation, Ecuador was deemed Compliant for 10 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Mutual Evaluation Report Recommendation Ratings

Ecuador faces significant challenges related to crime and corruption, with high-profile cases involving former government officials highlighting the pervasive nature of these issues. The judicial system struggles with independence and efficiency, while organized crime, particularly drug trafficking and human smuggling, is exacerbated by the involvement of both local and foreign criminal networks, creating an environment of fear and intimidation for those seeking justice.

Ecuador's economy presents a mix of potential and challenges, with significant investment opportunities in sectors such as agriculture, aquaculture, mining, and energy. However, the country faces ongoing economic stagnation, fiscal deficits, and political instability, which have hindered foreign direct investment (FDI) flows, dropping to $372.3 million in 2023—a stark decline from previous years. Recent administrations, particularly under President Daniel Noboa, are attempting to reform protectionist policies and attract investment, yet they grapple with dual crises in fiscal management and security, which complicate efforts to stabilize the economy and improve the investment climate.