Bhutan — Country Risk Report

Bhutan (Asia Pacific • South Asia). Risk report as of the 19 Jun 2026 FATF plenary.

Moderate country risk. Bhutan's country risk score is 4.8/10, placing it in the moderate-risk band. The principal driver is weak rule of law and institutions. Bhutan is not currently FATF grey- or black-listed. Bhutan is not subject to comprehensive country-wide sanctions. Firms should apply additional scrutiny where exposure involves state-linked entities, restricted sectors, sensitive technology, dual-use goods or politically exposed counterparties.

Recommended treatment

Standard due diligence, with enhanced checks for defined risk triggers.

At a glance

• FATF status: Not currently listed (one indicator only; it does not set the overall country risk rating by itself)
• Comprehensive country sanctions: none identified. Targeted sanctions exposure: possible, screen applicable persons, entities and sectors
• Government effectiveness and rule of law: 3.0/10
• Corruption (CPI 2025): 71/100, rank #18 of 182
• Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 4.8/10 (Moderate)

Higher score means higher country risk (global average 4.6). Full information available. Limited supporting information. Enforcement activity and CPI are shown for context but do not change the score.

All three parts of the score are available.

How this score was calculated

• Financial crime controls: 7.7/10 — 50% of this score
• Government effectiveness and rule of law: 3.0/10 — 30% of this score
• International sanctions: 0.0/10 — 20% of this score
• The FATF assessment is more than eight years old.

International sanctions contributes 0.0 because the complete UN, UK, EU and US review found no direct country-level sanctions programme. People or organisations connected to the country may still appear on sanctions lists.

Principal risk drivers

• Government effectiveness and rule of law drive the score; no FATF listing or direct country-level sanctions were identified

Mitigating factors

• Not currently on the FATF grey or black list.
• No comprehensive country-wide sanctions programme.
• Comparatively stronger political stability (1.1/10).
• Risk is concentrated in specific counterparties, sectors and transactions rather than applying uniformly.

Business impact

• Customer onboarding (Medium): Additional ownership and control verification may be required.
• Payments and transactions (Medium): Review transaction purpose, counterparties and geographic routing.
• Trade and export activity (Medium): Screen goods, end users and potential dual-use exposure.
• Corporate clients (Medium): Assess state ownership, government links and political exposure.
• Ongoing monitoring (Medium): Apply alerts for ownership changes, sanctions and geopolitical developments.

Recommended controls

• Verify ultimate beneficial ownership using more than one reliable source.
• Identify state ownership, government influence and politically exposed persons.
• Screen entities, directors and beneficial owners against applicable sanctions lists.
• Apply enhanced review to technology, defence, telecommunications, financial services and dual-use activity.
• Document transaction purpose and source of funds where cross-border structures are complex.
• Escalate unresolved ownership opacity or adverse information to Compliance.

Enhanced due diligence triggers

• State ownership / control
• PEP involvement
• Sensitive / restricted sectors
• Opaque ownership
• Adverse media
• Dual-use goods & technology
• High-risk intermediary routing

FATF status: Not currently listed

Bhutan is not on the FATF grey or black list as of the 19 Jun 2026 plenary.

Source details

International sanctions by issuing body

• UN: No
• EU: No
• UK: No
• US: No

No means the complete UN, UK, EU and US review found no direct country-level programme. People or organisations may still appear on sanctions lists.

Government effectiveness and rule of law (World Bank 2024, percentile)

• Government Effectiveness: 63/100
• Regulatory Quality: 53/100
• Rule of Law: 71/100

Regulators and legal framework

FATF network

FATF network via APG.

• Asia/Pacific Group on Money Laundering

Last mutual evaluation: 2016 · report

National regulators

Regulator profiles not yet available on RegActions.

FIU: Egmont Group member (FID Bhutan)

Framework signals

• FATF listing: Not currently listed
• International sanctions: no listed programme identified
• Corruption (CPI 2025): 71/100, rank #18 of 182
• Rule of law (WGI): 3.8/10 risk

Sector exposure

• Banking & payments (Low): No FATF listing, rule-of-law governance within normal range
• Trade & export controls (Low): No sanctions programme or FATF black-list constraint identified
• Crypto & virtual assets (Low): No FATF listing, accountability governance within normal range
• Real estate & luxury assets (Low): Corruption indicators within normal range for high-value assets
• State-linked & procurement (Low): Political-stability and corruption governance within normal range

Derived from sanctions tier, FATF listing, World Bank WGI governance and CPI; no per-sector dataset is asserted.

Bhutan: analysis

Bhutan's low corruption (WGI) reading (strong) and outstanding political stability (strong) are the strongest elements, corroborated by a CPI ranking. Rule of law (moderate) and voice and accountability (moderate) represent the primary sources of residual risk, reflecting institutional capacity constraints in a small developing economy. No FATF listing or sanctions apply. Bhutan sits in the upper third of the World Bank governance indicators.

Outlook

Bhutan's risk outlook is broadly stable and positive, anchored by strong anti-corruption performance and political continuity. Rule-of-law and accountability capacity building will determine whether the risk picture eases further over time. Firms should note that the small size of the financial sector limits enforcement visibility, and should monitor FATF engagement as the AML framework matures.

Key watchpoints

• Rule-of-law and institutional capacity developments, as the comparatively weaker governance domains.
• Voice and accountability trends, including democratic governance and civil-society space.
• Any FATF engagement or mutual evaluation findings.
• Maintenance of strong CPI and corruption scores, which are the primary positive anchors.

Assessment currency

• FATF status: Not listed (as of 19 Jun 2026)
• Sanctions exposure: None identified (as of Jul 2026)
• Governance (WGI): Latest dataset incorporated (as of 2024)
• Corruption (CPI): 71/100 (as of 2025)
• RegActions assessment: Reviewed (as of 19 Jun 2026)

Public evidence layer

FATF action: none. No FATF call-for-action or increased-monitoring status was identified at the latest plenary. This does not establish low risk.

Contextual signals (not scored)

• FATF network membership: FATF regional network: APG (present, as of 2026-07)
• EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
• Egmont Group FIU: FID Bhutan (present, as of 2026-07-17)
• Beneficial-ownership register: No live register identified in the source (unavailable, as of 2026-07-17)
• Transparency International CPI: 71/100, rank 18 (present, as of 2025)

Evidence freshness

• FATF monitored-jurisdiction status: current; data 2026-06-19
• FATF mutual evaluation and follow-up ratings: current; data 2026-07-31; follow-up 2023-08; base assessment 2016-10
• World Bank governance indicators: current; data 2024
• UN, UK, EU and US sanctions regimes: current; data 2026-08-13

Contextual signals are public evidence only and do not change the immutable v2 score.

Download evidence PDF · CSV · JSON

Regional peer scores

• Myanmar: 9.0/10 (Very high)
• North Korea: 9.0/10 (Very high)
• Afghanistan: 7.0/10 (Very high)
• China: 6.0/10 (High)
• Hong Kong: 6.0/10 (High)
• Laos: 6.0/10 (High)

Source: FATF black & grey lists · World Bank WGI (CC BY 4.0 — World Bank WGI) · TI CPI (CC BY-ND 4.0 — Transparency International, display only)