Somalia Country Summary
Higher Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Medium Concern
Terrorism
Higher Concern
Corruption
Higher Concern
US State ML Assessment
Medium Concern
Criminal Markets (GI Index)
Medium 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
Somalia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
Somalia has not yet undertaken a Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards.
Sanctions
International sanctions against Somalia are primarily implemented by the United States, European Union, United Kingdom, Canada, Australia, Japan, New Zealand, and Switzerland, aligning with the United Nations sanctions regime. These sanctions include arms embargoes, asset freezes, travel bans, and prohibitions on the import and export of charcoal and components for improvised explosive devices, aimed at targeting individuals and entities associated with terrorism and destabilizing activities in the region.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 9 |
| World Bank: Control of Corruption Percentile Rank | 1 |
Somalia faces significant challenges related to crime and corruption, characterized by rampant government corruption and weak enforcement of anti-corruption laws. The criminal landscape is dominated by groups like Al-Shabaab, which engage in extortion and trafficking, while the formal justice system remains dysfunctional and corrupt, leaving citizens vulnerable to various forms of exploitation and crime.
Economy
The economy of Somalia is gradually recovering from decades of conflict and instability, with the Federal Government actively promoting foreign direct investment (FDI) in key sectors such as agriculture, fisheries, and livestock. Despite the welcoming stance towards investment, challenges persist, including a lack of a comprehensive legal framework, widespread corruption, and security threats from groups like al-Shabaab, which hinder business operations and investor confidence. Recent economic reforms, including the successful completion of the Heavily Indebted Poor Countries (HIPC) process, have improved macroeconomic stability and opened up potential financing opportunities, while ongoing efforts to modernize customs and enhance revenue collection aim to further bolster the investment climate in the country.
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