Slovenia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last follow up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Slovenia was undertaken by the Financial Action Task Force (FATF) in 2019. According to that Evaluation, Slovenia was deemed Compliant for 11 and Largely Compliant for 19 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 1 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.
US Department of State Money Laundering assessment (INCSR)
Slovenia was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
Slovenia is not a major drug producer, but it is a transit country for drugs moving via the Balkan route to Western Europe. The Government of Slovenia is aware that Slovenia’s geographic position makes it an attractive potential transit country for drug smugglers, and it continues to pursue active counter-narcotics policies. Other predicate offenses of concern include business and tax fraud. In 2015, there were continuing efforts to continue with the privatization process.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 60
World Governance Indicator – Control of Corruption 80
Corruption is a risk for businesses operating in Slovenia. The overlap between business and politics has a particularly damaging effect on public procurement. Many public officials engage in corruption with impunity, and corruption scandals recently culminated in political instability and the eventual fall of the government. Slovenia's Criminal Code establishes a strong legal framework to mitigate corruption, criminalising extortion, passive and active briberyand money laundering, among other offences. However, enforcement is limited. Even though facilitation payments, gifts and hospitality (with the intent of gaining an advantage) are criminalised, businesses perceive bribery as an established way of doing business in Slovenia. For further information - GAN Integrity Business Anti-Corruption Portal
With excellent infrastructure, a well-educated work force, and a strategic location between the Balkans and Western Europe, Slovenia has one of the highest per capita GDPs in Central Europe, despite having suffered a protracted recession in 2008-2009 in the wake of the global financial crisis. Slovenia became the first 2004 EU entrant to adopt the euro (on 1 January 2007) and has experienced one of the most stable political transitions in Central and South-eastern Europe.
In March 2004, Slovenia became the first transition country to graduate from borrower status to donor partner at the World Bank. In 2007, Slovenia was invited to begin the process for joining the OECD; it became a member in 2012. However, long-delayed privatizations, particularly within Slovenia’s largely state-owned and increasingly indebted banking sector, have fuelled investor concerns since 2012 that the country would need EU-IMF financial assistance. In 2013, the European Commission granted Slovenia permission to begin recapitalizing ailing lenders and transferring their nonperforming assets into a “bad bank” established to restore bank balance sheets. Export-led growth fuelled by demand in larger European markets pushed GDP growth to 3.0% in 2014, while stubbornly-high unemployment fell slightly to 12%.
Prime Minister CERAR’s government took office in September 2014, pledging to press ahead with commitments to privatize a select group of state-run companies, rationalize public spending, and further stabilize the banking sector.
Agriculture - products:
hops, wheat, coffee, corn, apples, pears; cattle, sheep, poultry
ferrous metallurgy and aluminium products, lead and zinc smelting; electronics (including military electronics), trucks, automobiles, electric power equipment, wood products, textiles, chemicals, machine tools
Exports - commodities:
manufactured goods, machinery and transport equipment, chemicals, food
Exports - partners:
Germany 19.1%, Italy 10.6%, Austria 8%, Croatia 6.8%, Slovakia 4.7%, Hungary 4.4%, France 4.2% (2015)
Imports - commodities:
machinery and transport equipment, manufactured goods, chemicals, fuels and lubricants, food
Imports - partners:
Germany 16.5%, Italy 13.6%, Austria 10.2%, China 5.5%, Croatia 5.1%, Turkey 4% (2015)
Investment Climate - US State Department
Several key factors make Slovenia an attractive location for foreign direct investment (FDI): modern infrastructure with access to main EU transportation corridors, a major port on the Adriatic Sea, a highly-educated and professional work force, close proximity to Central/Southeastern European markets, and membership in the EU and Eurozone. However, potential investors in Slovenia have faced challenges including a lack of transparency in economic and commercial decision-making, unclear public tender processes, and at times an inconsistent taxation and regulatory structure.
EU member states are the biggest investors in Slovenia. Together they account for over 80 percent of all inward investment in Slovenia. The share of inward FDI stock in 2014 in Slovenia stood at 23 percent of GDP.
Nevertheless, foreign companies are an important component of Slovenia’s economy. In 2014, they accounted for nearly 20 percent of capital, over 20 percent of assets, and almost 23 percent of employees in the corporate sector. Their capital and workforce generated nearly 30 percent of total net sales revenue and 28 percent of total operating profit. Foreign companies accounted for 39 percent of exports and 45 percent of imports by the Slovenian corporate sector.
Sectors of the economy that are most successful in attracting FDI to Slovenia include manufacturing (especially metal products, electrical and optical equipment, and components for the automotive industry), chemical products, products from plastic materials, paper, pharmaceuticals, rubber, wholesale, retail, and financial and business consultancy.
An annual survey of foreign companies in Slovenia, conducted by the Slovenian Public Agency for the Promotion of Entrepreneurship, Innovation, Development, Investment and Tourism (SPIRIT Slovenia), indicates the most decisive factors for choosing Slovenia as an investment location are the high quality production of export goods, the skills and expertise of the labor force, prospects for long-term relationships with local customers and suppliers, market access (mostly for services), and geographic position.
Other Useful Links
FATF AML Deficiency List
Corruption Index (Transparency International & W.G.I.)