El Salvador Country Summary

FATF Status

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

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in El Salvador was undertaken in 2024. According to the follow-up Evaluation, El Salvador was deemed Compliant for 6 and Largely Compliant for 25 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective 1 of the Effectiveness ratings.

El Salvador faces significant challenges with corruption and crime, characterized by a complex interplay of organized criminal activities, high-level corruption, and ineffective governance. While the current administration has reportedly improved public confidence in government institutions and reduced overt corruption practices, civil society organizations argue that corruption remains pervasive, particularly at higher levels, and the government's lack of transparency exacerbates the issue, undermining accountability and civic engagement.

El Salvador's economy is characterized by its strategic location, the use of the U.S. dollar, and recent improvements in security and the business environment, making it an attractive destination for investment. The government, under President Bukele, has focused on job creation and economic growth through regulatory reforms, tax incentives, and efforts to streamline trade processes, leading to a notable increase in foreign direct investment (FDI) and a projected GDP growth of 3.5% in 2024. However, challenges remain, including liquidity constraints due to low sovereign credit ratings, ongoing negotiations with the International Monetary Fund (IMF), and concerns over the implications of Bitcoin's legal tender status, which has seen limited adoption among the population.