FATF Status

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

Latest FATF Statement  -  19 February 2016

The FATF welcomes Algeria’s significant progress in improving its AML/CFT regime and notes that Algeria 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 October 2011. Algeria is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Algeria will work with MENAFATF 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 Algeria was undertaken in 2023. According to that Evaluation, Algeria was deemed Compliant for 2 and Largely Compliant for 9 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

US Department of State Money Laundering assessment (INCSR)

​Algeria is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview

The extent of money laundering through Algeria’s formal financial system is understood to be minimal due to stringent regulations and a banking sector dominated by state-owned banks.  Algerian authorities monitor the banking system closely.  The Algerian financial system is highly bureaucratic and provides for numerous checks on all money transfers.  The continued prevalence of archaic, paper-based systems and banking officials not trained to function in the modern international financial system further deter money launderers, who are more likely to use sophisticated transactions.  However, a large informal, cash-based economy, estimated at 40 to 50 percent of GDP, is vulnerable to abuse by criminals.  

The country is generally making progress in its efforts to combat money laundering and financial crimes.  Over the past several years, the government has updated its criminal laws on terrorist financing and issued new guidelines for the Bank of Algeria and the Ministry of Finance’s Financial Intelligence Processing Unit (CTRF), Algeria’s financial intelligence unit (FIU).

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           36

World Governance Indicator – Control of Corruption             28

Corruption is a serious obstacle for companies operating or intending to invest in Algeria. A culture of patronage permeates several aspects of Algeria's economy, strengthening the practices of nepotism and the use of connections to "get things done." Bribery and facilitation payments are also common practice, despite being criminal offenses. Bribes and "grease money" are mainly employed to overcome bureaucratic hurdles. The legal framework criminalizes a large range of corruption offenses, but enforcement remains a challenge and government officials engage in corruption with impunity. For further information - GAN Integrity Business Anti-Corruption Portal

Algeria’s state enterprise-dominated economy is challenging for U.S. businesses, but multiple sectors offer opportunities for long-term growth. Algerian government officials frequently encourage U.S. companies to invest in Algeria with particular focus on agriculture, information and communications technology, mining, hydrocarbons (both upstream and downstream), renewable energy, and healthcare.

Algeria’s economy is driven by hydrocarbon production, which historically accounts for 95 percent of export revenues and approximately 40 percent of government income. While Russia’s war in Ukraine has led European countries to turn to Algeria as a source of gas, rising domestic energy consumption and underinvestment in production may make it difficult for the country to significantly increase its exports. The historically debt-averse government resists foreign financing, preferring to attract foreign direct investment (FDI) to boost employment and replace imports with local production. Algeria continues to pursue protectionist policies to encourage the development of local industries. The import substitution policies it employs tend to generate regulatory uncertainty, supply shortages, increased prices, and a limited consumer goods selection.

Economic operators deal with a range of challenges, including complicated customs procedures, cumbersome bureaucracy, difficulties in monetary transfers, and price competition from international rivals. International firms operating in Algeria complain that laws and regulations are constantly shifting, raising commercial risk for foreign investors. Other drawbacks include limited regional integration and import restrictions, which hamper opportunities to rely on international supply chains. The three main laws which govern investments in Algeria are the 2022 Investment Law, the yearly Finance Law, and the 2019 Hydrocarbon Law.

Country Links

Financial Intelligence Processing Unit (CTRF)

Central Bank of Algeria

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