Yemen — Country Risk Report

Yemen (Middle East • Western Asia). Risk report as of the 19 Jun 2026 FATF plenary.

Very high country risk, with elevated corruption risk. Yemen's country risk score is 7.0/10, placing it in the very high-risk band. Some information is unavailable, so the available parts are rebalanced and the country will not be labelled Low risk while information is missing. The principal driver is weak corruption, alongside political stability risk. Yemen is subject to FATF increased monitoring. Yemen 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: Grey list (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: 7.8/10
  • Corruption (CPI 2025): 13/100, rank #177 of 182
  • Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 7.0/10 (Very high)

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

One of the three parts is unavailable. The available parts are rebalanced, and the result will not be labelled Low risk while information is missing.

How this score was calculated

  • Financial crime controls: information unavailable — 0% of this score
  • Government effectiveness and rule of law: 7.8/10 — 60% of this score
  • International sanctions: 5.9/10 — 40% of this score
  • Financial crime controls information is unavailable.
  • FATF grey-list status sets a minimum of 6.0, but the calculated score was already higher.
  • sector-wide international sanctions sets a minimum of 6.0, but the calculated score was already higher.
Show the exact calculation

governance 7.8 × 60% + sanctions 5.9 × 40% = 7; fatf-grey floor 6 non-binding, sanctions-sectoral floor 6 non-binding; final 7

Principal risk drivers

  • FATF increased-monitoring status
  • Sectoral sanctions exposure
  • Corruption (WGI) — 8.5/10
  • Political stability — 8.1/10
  • Rule of law & institutions — 7.7/10

Mitigating factors

  • No comprehensive country-wide sanctions programme.
  • Risk is concentrated in specific counterparties, sectors and transactions rather than applying uniformly.

Business impact

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

Jurisdiction Under Increased Monitoring. Last reviewed 19 Jun 2026; next FATF plenary Oct 2026.

Sanctions: Sectoral

  • EU — sectoral: Restrictive measures in view of the situation in Yemen (source)
  • OFAC — targeted: Yemen-Related Sanctions (source)
  • UK — targeted: Yemen sanctions (source)
  • UN — targeted: 2140 Yemen sanctions (source)

Source details

International sanctions by issuing body

  • UN: Yes (Targeted)
  • EU: Yes (Sectoral)
  • 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: 15/100
  • Regulatory Quality: 30/100
  • Rule of Law: 24/100

Regulators and legal framework

FATF network

FATF network via MENAFATF.

National regulators

Regulator profiles not yet available on RegActions.

FIU: Not an Egmont Group member

Framework signals

  • FATF listing: Grey list
  • International sanctions: sectoral exposure
  • Corruption (CPI 2025): 13/100, rank #177 of 182
  • Rule of law (WGI): 7.7/10 risk

Sector exposure

  • Banking & payments (Elevated): FATF grey-list status elevates correspondent-banking risk
  • Trade & export controls (High): Sectoral sanctions: Restrictive measures in view of the situation in Yemen
  • Crypto & virtual assets (Elevated): FATF grey-list VASP supervision gaps raise virtual-asset risk
  • Real estate & luxury assets (High): Severe corruption exposure (CPI 13/100) drives laundering risk
  • State-linked & procurement (High): High state-capture risk (corruption WGI 8.5/10)

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

Yemen: analysis

Yemen combines a severely weak governance profile with current FATF grey listing. All governance domains are severely impaired: political stability (severe) is the highest risk dimension, followed by corruption (severe), rule of law (severe), and voice and accountability (severe). The CPI reading confirms Yemen as one of the most corrupt environments globally. Yemen sits in the lowest quartile of the World Bank governance indicators. No tracked enforcement actions exist, reflecting the effective absence of functioning financial regulators.

Outlook

Yemen's risk profile is unlikely to improve without a fundamental resolution of the conflict and reconstruction of state institutions. FATF grey-list status adds AML/CFT supervisory concerns to an already extreme governance picture. The October 2026 plenary is a key monitoring point. Firms should treat Yemen as requiring the most stringent due diligence and should be alert to humanitarian-financing and sanctions-evasion risks through third-country channels.

Key watchpoints

  • FATF grey-list status and any update at the October 2026 plenary.
  • Conflict resolution and ceasefire developments affecting institutional rebuilding prospects.
  • Humanitarian financing flows and risks of misuse or diversion through informal channels.
  • Any introduction of targeted or broader sanctions involving Yemen or Yemeni entities.

Assessment currency

  • FATF status: Increased monitoring (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): 13/100 (as of 2025)
  • RegActions assessment: Reviewed (as of 19 Jun 2026)

Public evidence layer

FATF action: increased monitoring. FATF identifies the jurisdiction as under increased monitoring; apply the firm's risk-based controls and monitor remediation progress.

Contextual signals (not scored)

  • FATF network membership: FATF regional network: MENAFATF (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: No live register identified in the source (unavailable, as of 2026-07-17)
  • Transparency International CPI: 13/100, rank 177 (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
  • 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 Yemen on the FATF grey list?

Yes. As of the 19 Jun 2026 FATF plenary, Yemen is on the FATF grey list (Jurisdictions Under Increased Monitoring). This is one AML indicator and does not by itself set Yemen's overall country risk rating. The next FATF plenary review is scheduled for Oct 2026.

Is Yemen subject to sanctions?

Partly. Yemen has sectoral 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 Yemen's country risk rating?

RegActions rates Yemen at 7.0/10 (Very 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. Some information is unavailable, so the available parts are rebalanced and the country will not be labelled Low risk while information is missing. Transparency International's 2025 Corruption Perceptions Index scores Yemen 13/100 (rank #177 of 182).

What due diligence applies to Yemen?

Enhanced due diligence. This is decision-support based on Yemen's FATF grey list 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)