Nicaragua Country Summary
Medium-High Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Higher Concern
US State ML Assessment
Higher Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Nicaragua is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Nicaragua was undertaken in 2021. According to that Evaluation, Nicaragua was deemed Compliant for 7 and Largely Compliant for 30 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.
Sanctions
Nicaragua is currently subject to international sanctions imposed by both the European Union and the United States. The EU has implemented financial sanctions against specific individuals and entities responsible for serious human rights violations, while the U.S. has restricted the import and export of defense articles and services, as well as blocked property of individuals contributing to the political situation in Nicaragua.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 14 |
| World Bank: Control of Corruption Percentile Rank | 7 |
Nicaragua is grappling with pervasive corruption and organized crime, exacerbated by a lack of effective governance and a judicial system that is heavily influenced by political interests. The country faces significant challenges related to human trafficking, arms trafficking, and environmental crimes, while the government's anti-corruption initiatives are largely seen as ineffective and symbolic, contributing to a climate of fear and repression among civil society and independent media.
Economy
Nicaragua's economy and investment climate are characterized by significant political and social instability under the authoritarian regime of President Daniel Ortega and Vice President Rosario Murillo. Investors face a highly unpredictable environment marked by the suspension of civil rights, arbitrary regulations, and the expropriation of private property, leading to a lack of confidence in the rule of law. Despite these challenges, Nicaragua maintains stable macroeconomic fundamentals, with a projected GDP growth of 3.5% in 2024 and substantial remittance inflows that account for approximately 30% of its GDP, indicating potential for growth if investor confidence can be restored through improved governance and legal protections.
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