Venezuela Country Summary

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.

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.

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.