Eritrea Country Summary

FATF Status

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

Compliance with FATF Recommendations

Eritrea has not yet undertaken a Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards.

Eritrea faces significant challenges related to crime and corruption, characterized by institutionalized corruption and a lack of transparency within the government. While laws exist to combat corruption among public officials, enforcement is unclear, and petty corruption is prevalent at local levels, compounded by the absence of independent oversight or civil society organizations to address these issues.

The country also grapples with severe human trafficking and smuggling problems, exacerbated by strict exit controls and forced labor practices. Organized crime is primarily state-embedded, with the military and ruling party involved in illicit activities, while the judiciary remains weak and susceptible to government influence, leading to a climate of impunity and limited resilience against crime.

Eritrea's economy presents significant challenges for foreign investment, particularly from the U.S., due to stringent government controls, a lack of transparency, and ongoing economic sanctions. The government maintains tight control over all sectors, with most businesses being small, family-owned, or state-run, while the national service program effectively subjects many citizens to forced labor under low wages. Despite professing a desire for foreign direct investment, the Eritrean government imposes numerous restrictions and lacks a robust legal framework, making it difficult for foreign entities to operate or invest in the country.