Sao Tome & Prin. Country Summary

Latest FATF Statement - 18 October 2013

São Tomé and Príncipe was earlier identified in the FATF’s Public Statement. While São Tomé and Príncipe has made recent progress, its AML/CFT framework still contains a number of strategic deficiencies. Given the small size of this country’s financial sector and its low impact on the international financial system, however, the FATF decided that São Tomé and Príncipe should continue to work closely with GIABA to address its remaining AML/CFT deficiencies.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in São Tomé and Príncipe was undertaken in 2024. According to that Evaluation, São Tomé and Príncipe was deemed Compliant for 5 and Largely Compliant for 11 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

São Tomé and Príncipe (STP) has made progress in combating corruption through various reforms, including the implementation of an anti-corruption law and modernization of customs procedures, which have led to increased revenues and reduced corruption incidents. However, challenges remain, such as the lack of a designated agency for anti-corruption efforts and ongoing issues with financial crimes and political influence in the judiciary. The country also faces vulnerabilities related to organized crime, particularly drug trafficking managed by foreign actors, while local gangs primarily engage in petty crimes.

São Tomé and Príncipe (STP) has a gross domestic product (GDP) of approximately $418.6 million and relies heavily on foreign aid, with over 90 percent of its budget financed by international donors. The country has made strides in improving its investment climate by enacting various laws aimed at attracting foreign direct investment, including a modern Labor Code and a Value Added Tax Law, while also focusing on sectors like tourism and agriculture to foster economic growth.

São Tomé and Príncipe has made significant strides in enhancing its investment climate over the past decade, focusing on creating a transparent and corruption-free environment to attract foreign direct investment (FDI). Key reforms include the enactment of a modern Labor Code and a Value Added Tax Law, as well as the ratification of the African Continental Free Trade Agreement. Despite these improvements, challenges such as a weak domestic market, inadequate infrastructure, and high costs of credit continue to hinder foreign investment opportunities.