Marshall Islands Country Summary

FATF Status

The Republic of the Marshall Islands 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 the Marshall Islands was undertaken in 2024. According to that Evaluation, the Marshall Islands was deemed Compliant for 14 and Largely Compliant for 21 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

The Marshall Islands faces significant challenges related to corruption, particularly in government procurement and financial management, with allegations of misuse of funds and conflicts of interest among officials. Human trafficking, especially of women and girls, is a critical issue, compounded by limited law enforcement resources and a lack of international oversight. While the country has a stable democratic governance system and active civil society, it struggles with economic vulnerabilities and the need for improved anti-trafficking measures.

The economy of the Marshall Islands is small, with an annual GDP of approximately USD 259 million and a per capita GDP of USD 6,172. The economy is heavily reliant on government employment and donor funding, particularly from the United States, which has provided over USD 1 billion in assistance since 2004. Key sectors include wholesale/retail trade, commercial fisheries, and tourism, but the country faces challenges such as a narrow export base, limited agricultural capacity, and vulnerability to external economic shocks.

The investment climate in the Marshall Islands is characterized by a government keen on attracting foreign investment, particularly in sectors such as fisheries, aquaculture, and tourism. However, foreign investors face challenges due to laws that restrict land ownership to Marshallese citizens, requiring them to lease land from private owners, and high operational costs stemming from the country's remoteness and limited infrastructure. Despite these hurdles, the government offers certain investment incentives and has established the Office of Commerce and Investment to assist foreign investors.