Tunisia Takes Steps to Enhance Anti-Money Laundering Measures

Strengthening AML and CFT Framework

In an effort to bolster its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework, Tunisia has issued a new directive aimed at enhancing due diligence requirements for credit institutions and post offices.

Key Provisions of the Directive

• Clarified obligations related to cross-border correspondent banking relationships
• Lowered identification thresholds for life insurance contracts
• Established a requirement for non-bank financial sector entities to report on the purpose and nature of business relationships
• Introduced an enhanced due diligence requirement for high-risk accounts
• Created an explicit due diligence obligation for politically exposed persons (PEPs)
• Clarified requirements in cases where intermediaries or third parties are used to carry out due diligence measures

Addressing Anonymous Cash Certificates and Capitalization Bonds

• The directive addresses the issue of anonymous cash certificates and capitalization bonds, which have been identified as a failure to comply with identification obligations
• Authorities are urged to quickly eliminate these instruments

Deposit of Outstanding Bearer Shares

• The law on making transactions paperless has eliminated the possibility of new bearer shares being issued, but a portion of past stock remains outstanding
• The deposit of such stocks in an escrow account is seen as a positive factor, requiring the identification of customers coming in to encash their holdings

Requiring Financial Institutions to Adopt AML/CFT Practices and Programs

• The directive reinforces the need for financial institutions to adopt AML/CFT practices and programs, including establishing structured internal control mechanisms
• The law also creates an obligation to establish such internal controls

Reporting Suspicious or Unusual Transactions

• Tunisia has created a mechanism for reporting suspicious or unusual transactions or operations
• The mechanism provides for the systematic suspension of such transactions and gives the CTAF the power to extend any such suspension by freezing the transaction in question for two days, renewable
• However, the reporting mechanism has been criticized for its ambiguities and lack of clarity

Urgent Need for Clarification

• Authorities have been urged to prioritize ensuring the proper operational functioning of the current mechanism for reporting suspicions, despite its deficiencies or imperfections
• A partial clarification of the notions of unusual transaction and suspicious transaction is also seen as essential, aimed at distinguishing between them and not requiring the reporting of transactions that are unusual only

Sanctions on Tipping Off Customers

• Tunisia has introduced sanctions on tipping off customers that their transaction has given rise to a report
• However, automatic suspension and freezing can indirectly inform the customer of the fact that a report has been filed, which is another argument in favor of changing the current mechanism

Integration of Prudential Supervision with AML/CFT Obligations

• Authorities have also been urged to accelerate the integration of prudential supervision with AML/CFT obligations for financial institutions, allowing for proper monitoring and operational setting.