Micronesia Country Summary
Medium Risk
View full Ratings TableSanctions
Lower Concern
FATF AML Deficient List
Medium Concern
Terrorism
Medium Concern
Corruption
Lower Concern
US State ML Assessment
Lower Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
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Anti Money Laundering
FATF Status
Micronesia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
Micronesia has not yet undertaken a Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards.
Sanctions
There are currently no international sanctions in force against Micronesia.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | NA |
| World Bank: Control of Corruption Percentile Rank | 78 |
The Federated States of Micronesia (FSM) faces significant challenges related to crime and corruption, despite having laws in place to combat these issues. Corruption is reportedly widespread among government officials, with cases of bribery and procurement fraud being prosecuted, although the lack of dedicated anti-corruption agencies and resources hampers enforcement efforts.
Human trafficking, particularly of women and girls, is a pressing concern, alongside the illicit trade in counterfeit goods and illegal fishing, which threaten the country's economy. While FSM has a stable democratic governance structure and an independent judiciary, limited resources and economic dependence on U.S. assistance hinder effective crime prevention and law enforcement, leaving the nation vulnerable to both domestic and transnational criminal activities.
Economy
The Federated States of Micronesia (FSM) is a lower middle-income nation characterized by a subsistence economy heavily reliant on government employment and foreign aid, primarily from the United States through a Compact of Free Association. Despite having a significant exclusive economic zone and potential for industries like tourism and fishing, the FSM faces numerous challenges such as low foreign direct investment due to restrictive land ownership laws, a weak legal framework for contract enforcement, and a high cost of doing business stemming from its geographic remoteness. The economy has shown minimal growth, with a GDP of approximately $336.4 million in 2017 and a trade deficit, while upcoming changes to Compact funding in 2023 raise concerns about fiscal sustainability and the country's ability to attract investment and stimulate economic development.
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