Venezuela Country Summary
Higher Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Higher Concern
Terrorism
Medium Concern
Corruption
Higher Concern
US State ML Assessment
Higher Concern
Criminal Markets (GI Index)
Higher 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
Venezuela is on the FATF List of Countries that have been identified as having strategic AML deficiencies.
Compliance with FATF Recommendations
The last Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Venezuela was undertaken in 2023. According to that Evaluation, Venezuela was deemed Compliant for 0 and Largely Compliant for 9 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
Sanctions
International sanctions against Venezuela include measures imposed by the United States and the European Union. The U.S. sanctions, administered by the Office of Foreign Assets Control (OFAC), maintain restrictions on various sectors while recently issuing general licenses to authorize certain transactions, reflecting a conditional approach based on Venezuela's political commitments.
Meanwhile, the EU has extended its restrictive measures, which include an arms embargo, travel bans, and asset freezes on specific individuals, aimed at promoting democratic solutions and addressing human rights violations in the country. These sanctions are designed to be flexible and reversible, contingent on progress in restoring democracy and the rule of law in Venezuela.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 10 |
| World Bank: Control of Corruption Percentile Rank | 1 |
Venezuela is grappling with pervasive corruption and crime, characterized by weak enforcement of anti-corruption laws and a lack of protection for organizations investigating these issues. The country serves as a hub for various criminal activities, including human trafficking, drug trafficking, and arms smuggling, often facilitated by high-ranking officials and organized crime groups, while the government's failure to maintain transparency and accountability exacerbates the situation.
Economy
Venezuela's economy is currently characterized by severe challenges, including political instability, rampant inflation, and significant state intervention, particularly in the oil sector, which is the backbone of the country's economy. With the petroleum industry accounting for approximately 94% of export earnings and 40% of government revenues, the ongoing mismanagement and corruption have exacerbated the economic crisis, leading to a contraction of around 16.5% in 2016 and an estimated inflation rate exceeding 13,000% in 2018. The investment climate remains highly restrictive for foreign investors due to a volatile regulatory framework, limited access to hard currency, and recent legislative changes that further entrench government control over foreign investments, making Venezuela a daunting environment for potential business ventures.
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