FATF Status

Liberia 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 Liberia was undertaken in 2023. According to that Evaluation, Liberia was deemed Compliant for 3 and Largely Compliant for 15 of the FATF 40 Recommendations. It was 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)

Liberia 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 of Liberia is making efforts to strengthen its anti-money laundering (AML) regime but lacks both the political will and resources necessary to adequately address the significant challenges.  The Central Bank of Liberia (CBL) does not robustly enforce AML requirements, largely due to funding constraints.  Interagency coordination has improved, but despite increases in financial intelligence reports, authorities generally have not conducted systematic financial investigations or secured financial crimes convictions, despite Liberia being considered as high risk for money laundering.  Financial institutions have limited capacity to detect money laundering, and their financial controls remain weak.  Liberia’s financial intelligence unit (FIU) remains under-funded and continues to face budget cuts and political interference.  The FIU also lacks the equipment and technical capacity to adequately collect, analyze, and disseminate financial intelligence.  Liberia remains a cash-based economy with weak border controls and endemic corruption, leaving the country vulnerable to illicit activities.  

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           25

World Governance Indicator – Control of Corruption             20

Liberia offers opportunities for investment, especially in natural resources such as mining, agriculture, fishing, and forestry, but also in more specialized sectors such as energy, telecommunications, agribusiness, tourism, and financial services. The economy, which was severely damaged by more than a decade of civil wars that ended in 2003, has been slowly recovering, but Liberia has yet to attain pre-war levels of development, and corrupt misgovernance continues to hinder growth, investment, and job creation. Liberia’s largely commodities-based economy relies heavily on imports even for most basic needs like fuel, clothing, and rice – Liberia’s most important staple food. The COVID-19 pandemic disrupted many sectors of the economy, which contracted in 2019 and 2020. However, the World Bank and IMF expect per capita GDP to return to pre-COVID-19 levels by 2023. The World Bank’s latest report  shows Liberia’s GDP per capita  was USD 676 in 2021 compared to USD 700 before the outbreak of the pandemic in 2019.

Low human development indicators, expensive and unreliable electricity, poor roads, a lack of reliable internet access (especially outside urban areas), and pervasive government corruption constrain investment and development. Most of Liberia lacks reliable power, although efforts to expand access to the electricity grid are ongoing through an extension from the Mount Coffee Hydropower Plant, connection to the West Africa Power Pool, and other internationally supported energy projects Public perception of corruption in the public sector is high, as indicated by Liberia’s poor showing in Transparency International’s 2022 Corruption Perceptions Index, where Liberia dropped six places from to 2021 to 142 out of 180 countries. Low public trust in the banking sector and lack of access to business financing results in most cash being held outside of banks. To remedy this, in 2022 the Central Bank of Liberia (CBL) began printing and circulating additional currency. This will continue through 2024, when the CBL expects to have distributed 48 billion new Liberian dollars. The CBL and commercial banks are also pushing the adoption of mobile money, which Liberians access through their mobile phones to make everyday purchases and pay bills. However, the government has yet to activate its long-planned National Electronic Payment System (NEPS, aka “the National Switch,”) meaning banking instruments like ATMs and mobile money accounts remain unintegrated and are not interoperable. A World Bank funded project launched in February 2023 is expected to eventually implement the National Switch.

Despite these numerous challenges, Liberia is rich in natural resources. It has large expanses of potentially productive agricultural land and abundant rainfall to sustain agribusinesses, while vast mineral resources offer significant potential to investors in extractive industries. A few large international concessionaires have invested successfully in agriculture and mining, though negotiating these agreements with the government often proves to be a lengthy, politicized, and byzantine struggle for those companies who do not pay bribes. The fishing industry, long dormant compared to pre-war levels, is a potential source of investment, but is struggling to make necessary improvements to meet standards and economies of scale that would open global export markets.

Country Links

Central Bank of Liberia