Algeria’s Dirty Money Racket: How the Country’s Financial System is Tainted by Illegal Funds

A Shocking Revelation

Algeria has been found to be heavily reliant on collecting funds from illegal sources, including drug smuggling and trafficking, extortion, imposing fees on smugglers, and hostage-taking. These illicit activities have permeated various sectors of the country’s economy, with the banking sector being particularly vulnerable due to its size, market share, and diversity of services.

The Banking Sector: A Prime Target

The real estate sector and postal services have been identified as being at medium risk due to the large cash transactions that occur in these industries. On the other hand, sectors such as stock exchange, insurance companies, financial institutions subject to supervision by the Banking Committee, and lawyers are considered to be at low risk.

Laws and Regulations: A Necessary but Ineffective Measure

Despite the risks, Algeria has made some progress in combating money laundering and terrorist financing (ML/TF). The country has enacted several laws and regulations aimed at preventing ML/TF, including Law No. 05-01 of 2005 on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

Concerns Over Transparency and Oversight

However, the effectiveness of these measures remains questionable. The report highlights concerns over the lack of transparency in the country’s financial system, which makes it difficult to track the flow of funds and identify illicit activities.

• The government has failed to complete the National Risk Assessment (NRA) process, which would identify areas of high or low risk within the country.
• There is a lack of effective supervision and regulation of the financial sector, enabling criminal networks to operate with impunity.
• International organizations, such as the Financial Action Task Force (FATF), have made recommendations that Algeria has failed to implement.

The Global Implications

In conclusion, Algeria’s reliance on collecting funds from illegal sources is a major concern for both the government and international authorities. The country must take immediate action to address these issues and implement effective measures to prevent ML/TF. Failure to do so will only exacerbate the problem and undermine the stability of the global financial system.

What Needs to be Done

• Complete the National Risk Assessment (NRA) process to identify areas of high or low risk within the country.
• Improve transparency in the country’s financial system to track the flow of funds and identify illicit activities.
• Implement effective supervision and regulation of the financial sector to prevent criminal networks from operating with impunity.
• Comply with international standards and recommendations made by organizations such as the Financial Action Task Force (FATF).