TESS: Country Report Summary – Brunei

Country Report Summary

BRUNEI DARULSSALAM

Anti Money Laundering

FATF status

Brunei is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement - 21 June 2013

The FATF welcomes Brunei Darussalam’s significant progress in improving its AML/CFT regime and notes that Brunei Darussalam has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in June 2011. Brunei Darussalam is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Brunei Darussalam will work with the APG as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Brunei Darussalam was undertaken in 2023. According to that Evaluation, Brunei Darussalam was deemed Compliant for 5 and Largely Compliant for 23 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 5 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Sanctions

There are no international sanctions currently in force against this country.

Bribery & Corruption

Rating: 0 (bad) - 100 (good)

Transparency International Corruption Index = NA

World Bank: Control of Corruption Percentile Rank = 89

Brunei has enforced the Prevention of Corruption Act since 1984, with the Anti-Corruption Bureau (ACB) established to investigate corruption allegations. While the country ranks relatively low in corruption perception, with U.S. companies not viewing it as a significant barrier to business, a notable case in 2020 involved the conviction of two former judges for embezzlement. The sultan has publicly condemned corruption, and Brunei is a member of the International Association of Anti-Corruption Authorities, having also ratified the UN Anticorruption Convention.

Economy

Brunei’s economy is heavily reliant on oil and gas, which account for approximately 50% of its GDP, supplemented by substantial revenue from overseas investments. The country enjoys a high standard of living with no personal taxes, free education, and healthcare, supported by its energy wealth. Despite efforts to diversify its economy, Brunei continues to face challenges such as rising inflation and increased shipping costs due to geopolitical unrest.

Brunei Darussalam offers a favorable investment climate characterized by an open economy and various incentives aimed at attracting foreign direct investment (FDI). The government has streamlined business establishment processes and provides tax exemptions in specific sectors, while foreign ownership of companies is unrestricted, although at least one director must be a resident. Additionally, Brunei’s strategic location, stable political environment, and lack of income, sales, or export taxes further enhance its appeal to potential investors.