Solomon Islands Country Summary

FATF Status

The Solomon Islands is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Solomon Islands was undertaken in 2019. According to that Evaluation, The Solomon Islands was deemed Compliant for 5 and Largely Compliant for 8 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

The Solomon Islands is a hub for human trafficking, with victims from both local communities and Southeast Asia, often subjected to forced labor and sexual exploitation. Illegal activities such as logging, fishing, and drug trafficking are prevalent, facilitated by corrupt state actors and foreign companies, while the justice system struggles with underfunding and limited reach. Despite some civil society efforts to combat these issues, challenges like corruption, weak governance, and economic instability hinder effective responses to crime and exploitation.

The Solomon Islands has a lower middle-income economy heavily reliant on natural resources, with over 75% of the labor force engaged in subsistence agriculture and fishing. Key industries include fishing, mining, and timber, but the economy faces challenges such as high public debt and a significant trade deficit, with imports far exceeding exports.

The investment climate in the Solomon Islands is influenced by its abundant natural resources, yet it faces significant challenges due to political instability and inadequate infrastructure. The government is actively seeking to attract foreign investment, particularly in tourism and renewable energy sectors, but issues related to land ownership and local resistance pose substantial barriers to sustainable economic development.