Faroe islands Country Summary

The Faroe Islands is an autonomous territory within the Kingdom of Denmark. As such, we are including the information for Denmark below:

FATF Status

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

Compliance with FATF Recommendations

The latest follow up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Denmark was undertaken in February 2021. According to that Evaluation, Denmark was deemed Compliant for 6 and Largely Compliant for 32 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

The Faroe Islands, as part of Denmark, benefit from a robust legal framework and strong governance that contribute to low levels of crime and corruption. While challenges such as foreign bribery and organized crime exist, the territory's effective law enforcement and community engagement enhance its resilience against these threats.

The economy of the Faroe Islands is predominantly fueled by the fishing industry, which constitutes approximately 90% of exports, while sectors such as tourism and information technology are on the rise. In 2023, the islands reported a robust GDP per capita of $70,400, bolstered by economic aid from Denmark, although the economy's heavy reliance on fishing and fish farming presents vulnerabilities. The investment climate is favorable due to the islands' autonomy in trade policies and government initiatives aimed at diversifying the economy, making it an attractive destination for foreign investors despite the risks associated with geographic isolation and sector concentration.