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 has laws against corruption, but the government's limited transparency raises questions about their enforcement, with evidence of minimal corruption among high officials and significant petty corruption locally. The country lacks independent organizations to report corruption, and there are severe issues with human trafficking and smuggling, exacerbated by government exploitation of citizens. Organized crime is primarily state-embedded, with the PFDJ and military involved, while the judiciary is weak and lacks independence, contributing to a climate of impunity and widespread human rights violations.

Eritrea's economy is heavily controlled by the government, with most businesses being small, family-owned enterprises, while larger operations are state-controlled or run by the ruling political party, the Peoples Front for Democracy and Justice (PFDJ). The national service program employs a significant portion of the workforce under conditions resembling forced labor, and the economy suffers from a lack of transparency, limited foreign investment opportunities, and strict regulations on currency and profit repatriation.

Eritrea's investment climate is highly restrictive, characterized by stringent government control over the economy and limited opportunities for foreign investment. The lack of a commercial code, U.S. economic sanctions, and the requirement for foreign businesses to negotiate directly with the ruling party, the Peoples Front for Democracy and Justice (PFDJ), create a challenging environment for potential investors. Additionally, most sectors are dominated by state-controlled enterprises, and the judiciary lacks independence, further deterring foreign investment.