Ethiopia — Country Risk Report

Ethiopia (Africa • East Africa). Risk report as of the 19 Jun 2026 FATF plenary.

High country risk, with political-instability risk. Ethiopia's country risk score is 6.1/10, placing it in the high-risk band. The principal driver is weak political stability, alongside voice and accountability risk. Ethiopia is not currently FATF grey- or black-listed. Ethiopia 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

Enhanced due diligence.

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: programmes in place, screen applicable lists
• Government effectiveness and rule of law: 6.2/10
• Corruption (CPI 2025): 38/100, rank #96 of 182
• Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 6.1/10 (High)

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: 7.4/10 — 50% of this score
• Government effectiveness and rule of law: 6.2/10 — 30% of this score
• International sanctions: 2.6/10 — 20% of this score
• The FATF assessment is more than eight years old.

Principal risk drivers

• Targeted sanctions exposure
• Political stability — 6.6/10
• Voice & accountability — 6.5/10
• Corruption (WGI) — 6.1/10
• Rule of law & institutions — 6.0/10

Mitigating factors

• Not currently on the FATF grey or black list.
• No comprehensive country-wide sanctions programme.
• Risk is concentrated in specific counterparties, sectors and transactions rather than applying uniformly.

Business impact

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

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

Sanctions: Targeted

• OFAC — targeted: Ethiopia-Related Sanctions (source)

Source details

International sanctions by issuing body

• UN: No
• EU: No
• UK: No
• US: Yes (Targeted)

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: 39/100
• Regulatory Quality: 42/100
• Rule of Law: 39/100

Regulators and legal framework

FATF network

FATF network via ESAAMLG.

• Eastern and Southern Africa Anti-Money Laundering Group

Last mutual evaluation: 2015 · report

National regulators

Regulator profiles not yet available on RegActions.

FIU: Egmont Group member (EFIS)

Framework signals

• FATF listing: Not currently listed
• International sanctions: targeted exposure
• Corruption (CPI 2025): 38/100, rank #96 of 182
• Rule of law (WGI): 6.0/10 risk

Sector exposure

• Banking & payments (Elevated): Weak rule-of-law governance (WGI 6.0/10 risk)
• Trade & export controls (Elevated): Targeted sanctions require screening of listed counterparties
• Crypto & virtual assets (Elevated): Weak accountability governance (WGI 6.5/10 risk)
• Real estate & luxury assets (Elevated): Elevated corruption exposure (CPI 38/100)
• State-linked & procurement (Elevated): State-capture exposure (corruption WGI 6.1/10)

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

Ethiopia: analysis

Ethiopia's profile rests on its governance indicators, with no FATF or sanctions overlay. Rule of law and institutions (elevated risk, weight 40%) is the primary contributor, followed by political stability (elevated risk, weight 15%), corruption (elevated risk, weight 35%), and voice and accountability (elevated risk, weight 10%). The domains are broadly clustered, indicating systemic rather than narrowly concentrated governance risk. The CPI reading places Ethiopia in the lower-middle range globally. Ethiopia sits below the median of assessed jurisdictions on the World Bank governance indicators.

Outlook

Ethiopia's risk profile is shaped by internal security dynamics alongside structural governance weaknesses. The absence of a FATF designation means no formal international AML/CFT escalation applies currently, but the combination of political instability, rule-of-law gaps, and corruption creates conditions that can facilitate financial crime. Firms should monitor conflict-related developments and their effects on financial sector access and integrity.

Key watchpoints

• Political stability developments, particularly any escalation or resolution of internal security situations.
• Any future FATF mutual evaluation findings or grey-list consideration.
• Corruption risk in public contracting, humanitarian fund flows, and extractive sector revenues.
• Rule-of-law trajectory, including judicial independence and enforcement capacity.

Assessment currency

• FATF status: Not listed (as of 19 Jun 2026)
• Sanctions exposure: Targeted programmes in place (as of Jul 2026)
• Governance (WGI): Latest dataset incorporated (as of 2024)
• Corruption (CPI): 38/100 (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: ESAAMLG (present, as of 2026-07)
• EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
• Egmont Group FIU: EFIS (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: 38/100, rank 96 (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 2022-08; base assessment 2015-06
• World Bank governance indicators: current; data 2024
• UN, UK, EU and US sanctions regimes: current; data 2026-08-16

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

Download evidence PDF · CSV · JSON

Regional peer scores

• Central African Republic: 7.8/10 (Very high)
• Democratic Republic of the Congo: 7.6/10 (Very high)
• Somalia: 7.3/10 (Very high)
• South Sudan: 7.3/10 (Very high)
• Sudan: 7.1/10 (Very high)
• Eritrea: 6.9/10 (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)