FATF Status

Greece is not 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 Greece was undertaken in 2019. According to that Evaluation, Greece was deemed Compliant for 15 and Largely Compliant for 22 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 5 of the Effectiveness & Technical Compliance ratings.

US Department of State Money Laundering assessment (INCSR)

Greece was deemed a Jurisdiction of Primary Concern by the US Department of State 2017 International Narcotics Control Strategy Report (INCSR) but has not been included since. Key Findings from the last report are as follows: -

Greece is a regional financial center for the Balkans, as well as a bridge between Europe and the Middle East. Official corruption, the presence of organized crime, and a large informal economy make the country vulnerable to money laundering and terrorist financing. Greek law enforcement proceedings show that Greece is vulnerable to narcotics trafficking, trafficking in persons, illegal migration, prostitution, smuggling of cigarettes and other contraband, serious fraud or theft, illicit gaming activities, and large scale tax evasion.

Evidence suggests financial crimes – especially tax related – have increased in recent years. Criminal organizations, some with links to terrorist groups, are trying to use the Greek banking system to launder illicit proceeds. Criminally-derived proceeds are most commonly invested in real estate, the lottery, and the stock market. Criminal organizations from southeastern Europe, the Balkans, Georgia, and Russia are responsible for a large percentage of the crime that generates illicit funds. The imposition of capital controls in June 2015 has limited, but not halted, the widespread use of cash, which facilitates a gray economy as well as tax evasion, although the government is trying to crack down on both trends. The government is working to establish additional legal authorities to combat tax evasion. Due to the large informal economy, it is difficult to determine the value of goods smuggled into the country, including whether any of the smuggled goods are funded by narcotic or other illicit proceeds.

Greece has three free trade zones (FTZs), located in the Heraklion, Piraeus, and Thessaloniki port areas. Goods of foreign origin may be brought into the FTZs without payment of customs duties or other taxes and remain free of all duties and taxes if subsequently transshipped or re-exported. Similarly, documents pertaining to the receipt, storage, or transfer of goods within the FTZs are free from stamp taxes. The FTZs also may be used for repacking, sorting, and re-labeling operations. Assembly and manufacture of goods are carried out on a small scale in the Thessaloniki Free Zone. These FTZs may pose vulnerabilities for trade-based and other money laundering operations.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           49

World Governance Indicator – Control of Corruption             57

Corruption severely affects Greece's business environment, completely distorting market competitiveness. A common form of corruption in Greece is known as 'fakelaki', translating to small envelopes and signifying bribes passed on to officials or other recipients to obtain some form of benefit. Greece’s Penal Code criminalises several forms of bribery, including passive and active bribery, abuse of office and money laundering, yet ineffective implementation of existing laws has exacerbated corruption in both the higher and lower echelons of government. The tax administration and public procurement are identified as the sectors most affected by corruption. Gifts, bribery and facilitation payments are widespread despite existing provisions that criminalise these acts. For further information - GAN Integrity Business Anti-Corruption Portal

Greece has rebounded since the 2009-2018 financial crisis that saw real GDP decline by 25 percent.  Modest growth began to return in 2019 and unemployment dropped from its crisis peak of 35 percent in 2013 to 12 percent in 2022.  The Government of Greece (GoG) has implemented reforms and attracted investment by cutting red tape, boosting innovation and entrepreneurship, digitizing government services, and enabling more rapid growth in the renewable energy sector.  Greece’s debt-to-GDP ratio decreased by more than 20 percent in 2022 – reflecting robust growth, fiscal adjustment, and higher inflation – and it benefits from relatively low debt servicing rates that should allow Greece to easily service its debt for the foreseeable future.  Most major ratings agencies upgraded Greece’s sovereign debt rating to one notch below investment grade as of late January as a result of Greece’s sustained positive fiscal performance.  The European Commission’s November 2022 forecast for the Greek economy predicted GDP growth of 6.0 percent in 2022 – nearly double the EU average – and 1.0 percent growth in 2023.

Over the past several years, the bilateral relationship between the U.S. and Greece has deepened significantly via defense and strategic partnerships, and Greece ambitiously seeks to bring economic ties to similar, historic heights.  Greece is increasingly a source of solutions – not just in the fields of energy diplomacy and defense, but in high-tech innovation, healthcare, and green energy, improving prospects for solid economic growth and stability here and in the wider region.

The Mitsotakis government has pursued an aggressive investment and economic reform agenda.  In recent years parliament approved dozens of economic-related bills, including a key investment law in October 2019, designed to cut red tape, help achieve full employment, and adopt best international practices – including by digitizing government services.  Investors cite difficulties with Greece’s bureaucracy and lack of timely resolution in cases in litigation as impediments to investment.

Greece’s government maintains an estimated $38 billion cash liquidity buffer as of June 2022. Capital controls were completely lifted in September 2019 and Greece successfully exited the European Commision’s economic Enhanced Surveillance Framework in August 2022. Greece will remain subject to post-program surveillance monitoring by euro area creditors until it repays 75 percent of financial assistance, expected in 2059.

The health of Greece’s banking system has improved significantly following the financial crisis, in part due to substantial reductions of non-performing loans (NPL), including via the securitization of NPLs through the “Hercules” program. The NPL ratio decreased from a crisis high of 45 percent in 2017 to less than 10 percent at the end of 2022.

Greece’s return to economic growth has generated new investor interest in the country. From 2011-2022, the U.S. was the 8th largest source of foreign direct investment in Greece. Investments by Applied Materials, AWS, Cisco, Deloitte, Digital Realty, Google, J.P.  Morgan, Meta, Microsoft, and Pfizer are projected to have an economic impact worth billions of dollars over the next few years.

In January 2023, Fitch Ratings upgraded Greece’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB+’ from ‘BB’. In September 2022, Moody’s affirmed its outlook of the Greek banking system as “stable.” Standard & Poor upgraded its credit rating for Greece to BB+ in April 2022.  Greece repaid its International Monetary Fund (IMF) loans in April 2022, two years ahead of schedule.

With 32 billion euros in European Recovery and Relief Facility (RRF) funds set to flow into the country over the next five years, many anticipate continued strong growth.

From July to November 2022 electricity prices for Greek consumers increased nearly 300 percent compared to the same period in 2020. To shield consumers from these record-high prices, the Government of Greece spent more than €5 billion ($5.25 billion at the current exchange rate) since July 2022 subsidizing the retail cost of electricity and offsetting as much as 90 percent of the price increase over 2020 rates. To help pay for these subsidies, the Grece expanded a cap on the wholesale prices of renewable energy to cap prices of wholesale electricity for all power producers to capture windfall revenues. The proceeds captured by this windfall tax have offset the government’s subsidy spending by nearly 45 percent while record tourism receipts have helped plug the remaining budgetary gaps.

Country Links

Anti-Money Laundering Counter-Terrorist Financing and Source of Funds Investigation Authority

Capital Markets Commission

Bank of Greece