Nicaragua — Country Risk Report

Nicaragua (Americas • Central America). Risk report as of the 19 Jun 2026 FATF plenary.

High country risk, with elevated corruption risk. Nicaragua's country risk score is 5.6/10, placing it in the high-risk band. The principal driver is weak corruption, alongside voice and accountability risk. Nicaragua is not currently FATF grey- or black-listed. Nicaragua 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: 6.5/10
  • Corruption (CPI 2025): 14/100, rank #175 of 182
  • Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 5.6/10 (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: 6.0/10 — 50% of this score
  • Government effectiveness and rule of law: 6.5/10 — 30% of this score
  • International sanctions: 3.1/10 — 20% of this score
  • The FATF assessment is more than eight years old.
Show the exact calculation

aml 6 × 50% + governance 6.5 × 30% + sanctions 3.1 × 20% = 5.6; final 5.6

Principal risk drivers

  • Targeted sanctions exposure
  • Corruption (WGI) — 8.1/10
  • Voice & accountability — 7.3/10
  • Rule of law & institutions — 6.7/10

Mitigating factors

  • Not currently on the FATF grey or black list.
  • No comprehensive country-wide sanctions programme.
  • Comparatively stronger political stability (3.5/10).
  • 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

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

Sanctions: Targeted

  • EU — targeted: Restrictive measures in view of the situation in Nicaragua (source)
  • OFAC — targeted: Nicaragua-Related Sanctions (source)
  • UK — targeted: Nicaragua sanctions (source)

Source details

International sanctions by issuing body

  • UN: No
  • EU: Yes (Targeted)
  • UK: Yes (Targeted)
  • 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: 31/100
  • Regulatory Quality: 39/100
  • Rule of Law: 29/100

Regulators and legal framework

FATF network

FATF network via GAFILAT.

Last mutual evaluation: 2017 · report

National regulators

Regulator profiles not yet available on RegActions.

FIU: Not an Egmont Group member

Framework signals

  • FATF listing: Not currently listed
  • International sanctions: targeted exposure
  • BO register: Restricted (live since 2021)
  • Corruption (CPI 2025): 14/100, rank #175 of 182
  • Rule of law (WGI): 6.7/10 risk

Sector exposure

  • Banking & payments (Elevated): Weak rule-of-law governance (WGI 6.7/10 risk)
  • Trade & export controls (Elevated): Targeted sanctions require screening of listed counterparties
  • Crypto & virtual assets (Elevated): Weak accountability governance (WGI 7.3/10 risk)
  • Real estate & luxury assets (High): Severe corruption exposure (CPI 14/100) drives laundering risk
  • State-linked & procurement (High): High state-capture risk (corruption WGI 8.1/10)

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

Nicaragua: analysis

Nicaragua's profile is driven entirely by a severe governance picture, with no FATF or sanctions overlay. Corruption (severe) and voice and accountability (severe) are the most acute weaknesses, consistent with a very weak CPI reading. Rule of law and institutions (elevated) is also severely compromised. Political stability (moderate) is the comparatively least acute domain. Nicaragua sits in the lower third of the World Bank governance indicators. The combination of pervasive corruption, restricted accountability, and weak rule of law creates significant financial-crime exposure.

Outlook

Nicaragua's risk outlook is unfavourable. Structural political constraints limit the prospect of meaningful governance reform in the near term, and the CPI trajectory indicates persistent deterioration rather than improvement. Should targeted or sectoral sanctions be introduced against Nicaragua or its leadership, the risk profile would rise significantly. FATF grey-listing would similarly raise scrutiny materially. Firms should apply robust enhanced due diligence for any Nicaraguan nexus and monitor both the October 2026 FATF plenary and international sanctions developments closely.

Key watchpoints

  • Sanctions risk: any introduction of targeted or sectoral measures against Nicaragua or associated individuals would materially raise its risk profile.
  • FATF plenary in October 2026 for any indications of grey-list interest given the governance profile.
  • CPI trajectory: further decline below 14 would indicate critical institutional deterioration.
  • Voice and accountability conditions, including media freedom and civil society access, as leading indicators of governance direction.

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): 14/100 (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: GAFILAT (present, as of 2026-07)
  • EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
  • Egmont Group FIU: No Egmont member FIU identified (absent, as of 2026-07-17)
  • Beneficial-ownership register: Restricted (live since 2021) (present, as of 2026-07-17)
  • Transparency International CPI: 14/100, rank 175 (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 2021-01; base assessment 2017-10
  • 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

FAQ

Is Nicaragua on the FATF grey list?

No. Nicaragua is not on the FATF grey or black list as of the 19 Jun 2026 plenary. FATF listing is one AML indicator; absence from the list does not by itself make Nicaragua low risk. The next FATF plenary review is scheduled for Oct 2026.

Is Nicaragua subject to sanctions?

Partly. Nicaragua has targeted sanctions exposure rather than a comprehensive country-wide programme. Firms should screen applicable persons, entities and sectors against the OFAC, UK, EU and UN lists.

What is Nicaragua's country risk rating?

RegActions rates Nicaragua at 5.6/10 (High risk), where a higher score means higher country risk. The score combines financial crime controls, government effectiveness and rule of law, and international sanctions. Transparency International's 2025 Corruption Perceptions Index scores Nicaragua 14/100 (rank #175 of 182).

What due diligence applies to Nicaragua?

Enhanced due diligence. This is decision-support based on Nicaragua's FATF status, governance and sanctions signals, and is not a substitute for a firm's own risk assessment.

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)