Financial Crime World

Algerian Financial Institutions Not Subject to Bank of Algeria Laws

Lack of Oversight Raises Concerns about Money Laundering and Terrorist Financing

A recent investigation has revealed that some Algerian financial institutions (FIs) are not subject to the same laws and regulations as those under the Bank of Algeria. This lack of oversight has raised concerns about the potential for money laundering and terrorist financing.

Key Findings

  • FIs not subject to the Bank of Algeria, such as insurance companies, brokerage institutions, and financial post services, are not required to:
    • Verify the identity and address of their customers before opening an account
    • Apply strict supervision on accounts and operations that may pose high risk and suspicious activities
  • There is no legal or regulatory provision that requires FIs to take ongoing due diligence measures
  • No guidelines for identifying categories of high-risk customers, business relationships, or transactions
  • No reference to cross-border correspondent banking in the law
  • Issues with wire transfers, including lack of specification for amount ceiling and no distinction between regular transfers and cross-border batch transfers

Wire Transfers

  • No legal provision that requires including full accurate data of the originator in money orders and related documents
  • Confusion between unusual transactions and suspicious transactions that should be reported to the Financial Intelligence Unit (FIU)

Unusual and Suspicious Transactions

  • Only obligated to inquire about the source and destination of funds, as well as the purpose and identity of the concerned parties
  • No clear distinction between unusual transactions and suspicious transactions

Conclusion

The investigation concluded that Algeria’s AML/CTF system lacks comprehensive measures to address money laundering and terrorist financing risks, particularly in regards to FIs not subject to the Bank of Algeria. The lack of oversight and regulations has raised concerns about the potential for financial institutions to be exploited by criminal organizations.

Response from the Bank of Algeria

  • Spokesperson stated that the institution is committed to ensuring the integrity and stability of the financial system in Algeria
  • Acknowledged some gaps in their regulatory framework and are working closely with international partners to strengthen AML/CTF measures

Call to Action

The investigation’s findings highlight the need for Algeria to strengthen its AML/CTF framework, particularly in regards to FIs not subject to the Bank of Algeria. The international community is urging the government to take immediate action to address these gaps and ensure that all financial institutions are held to the same standards.

What You Can Do

  • All financial institutions in Algeria should remain vigilant and report any suspicious transactions to the FIU
  • It is essential for us to work together to prevent money laundering and terrorist financing in our country.