Puerto Rico

Sanctions

No

FATF AML Deficient List

No

Higher Risk

EU Commission’s list of AML/CFT deficient countries

Not on EU White list equivalent jurisdictions
Offshore Finance Centre

Medium Risk

Compliance with FATF 40 + 9 Recommendations (no mutual evaluation yet undertaken)

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ANTI-MONEY LAUNDERING

FATF Status

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

 

Compliance with FATF Recommendations

 

Puerto Rico falls within the jurisdiction of the USA with regard to the Mutual Evaluation Report.

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in the USA was undertaken by the Financial Action Task Force (FATF) in 2016. According to that Evaluation, the USA was deemed Compliant for 9 and Largely Compliant for 21 of the FATF 40 Recommendations. It was also deemed Highly Effective for 4 and Substantially Effective for 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

EU Commission’s list of AML/CFT deficient countries

On 13 February 2019, the EU Commission adopted a new list of 23 third countries that had been identified as having strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks as defined under the Fourth and Fifth Anti-Money Laundering Directives. Puerto Rico has been included on this list. This list currently includes all countries currently on the FATF AML deficiency lists together with 11 additional jurisdictions.

It is noted that to date the EU Member States have declined to adopt this list. However, as this country has been identified as having AML deficiencies by the EU Commission, we have rated it accordingly.

SANCTIONS

There are no international sanctions currently in force against this country.

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           N/A

World Governance Indicator – Control of Corruption              60

ECONOMY

Puerto Rico had one of the most dynamic economies in the Caribbean region until 2006; however, growth has been negative for each of the last nine years. The downturn coincided with the phase out of tax preferences that had led US firms to invest heavily in the Commonwealth since the 1950s, and a steep rise in the price of oil, which generates most of the island's electricity.

 

Diminished job opportunities prompted a sharp rise in outmigration, as many Puerto Ricans sought jobs on the US mainland. Unemployment reached 16% in 2011, but declined to 13.7% in December 2014. US minimum wage laws apply in Puerto Rico, hampering job expansion. Per capita income is about half that of the US mainland.

 

The industrial sector greatly exceeds agriculture as the locus of economic activity and income. Tourism has traditionally been an important source of income with estimated arrivals of more than 3.6 million tourists in 2008. Puerto Rico's merchandise trade surplus is exceptionally strong, with exports nearly 50% greater than imports, and its current account surplus about 10% of GDP.

Closing the budget deficit while restoring economic growth and employment remain the central concerns of the government. The gap between revenues and expenditures narrowed to 0.2% of GDP in 2014, although analysts believe that not all expenditures have been accounted for in the budget and a better accounting of costs would yield an overall deficit of roughly 5% of GDP in 2014. Public debt rose to 105% of GDP in 2015, about $17,000 per person, or nearly three times the per capita debt of the State of Connecticut, the highest in the US. Much of that debt was issued by state-run schools and public corporations, including water and electric utilities. In June 2015, Governor Alejandro GARCIA Padilla announced that the island could not pay back at least $73 billion in debt and that it would seek a deal with its creditors.

 

Agriculture - products:

sugarcane, coffee, pineapples, plantains, bananas; livestock products, chickens

 

Industries:

pharmaceuticals, electronics, apparel, food products, tourism

 

Exports - commodities:

chemicals, electronics, apparel, canned tuna, rum, beverage concentrates, medical equipment

 

Imports - commodities:

chemicals, machinery and equipment, clothing, food, fish, petroleum products

Country Links
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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