FATF Status

Haiti is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement  -  23 February 2024

Since June 2021, when Haiti made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime, Haiti has taken steps towards improving its AML/CFT regime, including by facilitating information sharing with relevant foreign counterparts and addressing technical deficiencies in its ML offence, TF offence, and AML/CFT preventive measures. The FATF recognises the political commitment expressed at a high level and the efforts demonstrated by Haiti to advance its commitments in the midst of the challenging social, economic and security situation within the country. Haiti should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) completing its ML/TF risk assessment process and disseminating the findings; (2) implementing risk-based AML/CFT supervision for all financial institutions and DNFBPs deemed to constitute a higher ML/TF risk; (3) ensuring basic and beneficial ownership information are maintained and accessible in a timely manner; (4) ensuring a better use of financial intelligence and other relevant information by competent authorities for combatting ML and TF; (5) demonstrating authorities are identifying, investigating and prosecuting ML cases in a manner consistent with Haiti’s risk profile; (6) demonstrating an increase of identification, tracing and recovery of proceeds of crimes; (7) addressing the technical deficiencies in its targeted financial sanctions regime; and (8) conducting appropriate risk-based monitoring of NPOs vulnerable to TF abuse without disrupting or discouraging legitimate NPO activities.

The FATF notes Haiti’s continued progress across its action plan, however all deadlines have now expired and work remains. The FATF encourages Haiti to continue to implement its action plan to address the above-mentioned strategic deficiencies.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Haiti was undertaken in 2019. According to that Evaluation, Haiti was deemed Compliant for 0 and Largely Compliant for 2 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

US Department of State Money Laundering assessment (INCSR)

Haiti is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview

The government’s efforts to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime have stalled due, in part, to the absence of a constitutional government and increased political instability and uncertainty following the 2021 presidential assassination.  

Haitian gangs and corrupt actors are engaged in international drug trafficking and other criminal activity.  While Haiti is not a major financial center, regional narcotics and money laundering enterprises utilize Haitian couriers, primarily via maritime routes.  Drug trafficking in Haiti, and related money laundering, is primarily connected to the United States.  While key legislation is in place, including anticorruption and AML laws, the weakness of the judicial system, impunity, and a lack of political will have allowed corruption and money laundering to take hold in Haiti.  The government did not make measurable AML/CFT progress during 2021 but is receiving assistance from international organizations to try to address deficiencies and improve its capabilities.

In June 2021, Haiti made a high-level political commitment to strengthen the effectiveness of its AML/CFT regime and agreed to an action plan encompassing a number of specific measures, including increasing risk-based monitoring and information sharing and increasing the identification, tracing, and recovery of criminal proceeds.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           17

World Governance Indicator – Control of Corruption              5

Haiti, one of the most urbanized nations in Latin America and the Caribbean region, occupies the western third of the island of Hispaniola. Haiti’s investment climate offers opportunities but also major challenges for U.S. investors. The opportunities offered by ample arable land and young population are countered by endemic corruption, poor infrastructure, instability, violence in the capital, high inflation, and the migration of thousands of skilled Haitian private sector and medical sector workers.

Despite efforts by the Haitian government to achieve macroeconomic stability and sustainable private sector-led and market-based economic growth, Haiti’s investment climate is characterized by an unstable national currency (Haitian gourde, or HTG), persistent inflation, high unemployment, political uncertainty, and insecurity. The 2020 global outbreak of the coronavirus, multiple national lockdowns that paralyzed economic activities, and the delayed resolution of the political crises following former president Jovenel Moise’s assassination further complicated the Haitian government’s capacity to achieve macroeconomic stability, create jobs, and encourage economic development through foreign trade and investment. As a free market system, the Haitian economy traditionally relies on the agriculture, construction, and commercial sectors, as well as the export-oriented apparel assembly industry in the north of the country. However, the proliferation of gangs in metropolitan Port-au-Prince and persistent roadblocks put in place by the gangs along the main north and south access routes to the capital create major challenges for goods to freely circulate in the country. Haitians and expatriates perceived to have access to wealth are the targets of kidnapping for ransom, with some Haitian gangs showing increased sophistication in conducting complex kidnappings that can overcome traditional mitigation methods such as the use of armored cars. The DC-based Inter-American Development Bank (IDB) Country Representative for Haiti said security problems are making it increasingly hard for the IDB to continue working in Haiti, as gangs increase their activities. A significant portion of their local staff have already quit, and those that remain either want to live in secured hotels or leave the country. The World Bank is also facing the same problem with their local staff, while many of their foreign staff work from overseas.

Although the business climate is challenging, Haiti’s legislation encourages foreign direct investment. The government has prioritized building and improving infrastructure, including boosting energy production, and has additionally designated agriculture, manufacturing, and tourism as key investment sectors. The latter revealed itself to be particularly challenging, given the current security situation and potential for civil unrest. Agricultural producers reduced their production as road blockages prevent movement of goods toward the capital. Several years of drought, have also reduced the crop production capacity of the country’s arable land and an El Nino climatic event is anticipated in 2023.

The Haitian investment code provides the same rights, privileges, and equal protection to local and foreign companies. Under Haitian law, Haiti’s business climate affords equal treatment to all investors, including women, minorities, and foreign nationals.

Political uncertainty has increased as insecurity and gang violence increase, and democratic elections are delayed. The absence of a stable government that could create long-term economic policy complicates the workings of an already opaque bureaucracy. On February 6 2023, Prime Minister Ariel Henry installed a High Transition Council (HCT) made up of three representatives chosen on a consensual basis whose job will be to prepare for presidential and legislative elections. While the country maintains a liberal trade and foreign exchange regime, and largely adheres to World Bank programs to fight poverty, continuing reports of corruption and financial mismanagement have raised challenges for investment and investors.

The Government of Haiti (GoH) Post-COVID Economic Recovery Plan (PREPOC 2020-2023) included the textile sector as one of the most important means for achieving economic transformation and diversification in country. However, due to supply chain and fuel problems, many companies have had to reduce staffing while a small number have closed operations entirely.

According to the World Investment Report 2021 United Nations Conference on Trade and Development (UNCTAD), the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) reported that Foreign Direct Investment (FDI) flows to Haiti rose to $50 million in 2021 from $23 million in 2020, a 117 percent increase. In the recent past, Haiti has been unable to increase its domestic production, and as a result most of its consumer products are imported. The impact of the war in Ukraine has been severe on Haiti’s economy and a contributing factor to inflation reaching an all-time high. The cost of imported goods has risen significantly, and according to data published by The Haitian Institute of Statistics and Technology (IHSI) the year-to-year inflation from January 2022 to January 2023 is 49.3 percent, whereas imported inflation accounts for 61.5 percent. Gang control of transportation routes used to support supply chains has also contributed to inflation. Five million Haitians face food insecurity, according to the Ministry of Social Affairs and Labor – nearly half the population. Russia’s war in Ukraine has additionally disrupted security equipment trade between Haiti and its partners, depriving the nation of necessary assistance.

Haiti’s net international reserves were around $227.2 million as of September 30, 2022. Improving the investment outlook for Haiti requires political and economic stability, underscored by the enactment of institutional and structural reforms that can improve Haiti’s business and political environment. The Haitian economy showed a negative GDP growth of 1.7 percent in 2019, (3.3 percent in 2020; 1.8 percent in 2021, and 1.7 percent in 2022).

The United Nations uses the human development index (HDI) to measure the progress of a country and Haiti was measured at 0.535 points in 2021, placing it 163rd out of 191 countries ranked.

Country Links

Bank of the Republic of Haiti