Maldives Country Summary

FATF Status

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

Compliance with FATF Recommendations

It should be noted that the new style FATF Mutual Evaluation has not yet been undertaken.

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Maldives was undertaken by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, The Maldives was deemed Compliant for 1 and Largely Compliant for 0 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

The Maldives has made efforts to combat corruption since joining the UN Convention against Corruption in 2007, but challenges remain, as evidenced by its fluctuating ranking on the Transparency International Corruption Perceptions Index. Despite some regulatory advancements, such as a ban on business transactions with individuals linked to senior government personnel, corruption persists at various societal levels, undermining economic growth. The Anti-Corruption Commission faces limitations in its mandate and effectiveness, while the country grapples with issues related to human trafficking, organized crime, and a weak judicial system.

The economy of the Maldives is heavily reliant on tourism, which contributes nearly 30% to the GDP and accounts for over 60% of foreign currency earnings. Following a significant decline due to the COVID-19 pandemic, the tourism sector has shown signs of recovery, with 1.88 million tourist arrivals recorded in 2023. Despite the government's efforts to diversify the economy, tourism remains the primary economic driver, while challenges such as income inequality and limited employment opportunities persist.

The investment climate in the Maldives is characterized by an open policy towards foreign investment, primarily focused on the tourism and hospitality sectors, which attracted 19 out of 30 new foreign direct investments in 2023. However, challenges such as ambiguous laws and competition from politically influential local businesses deter some potential investors. The government, through Invest Maldives, actively promotes the country as an investment destination and aims to diversify the economy while managing a complex regulatory environment.