Financial Crime World

Tunisia Faces Scrutiny Over Compliance with FATF Recommendations

Financial Action Task Force Raises Concerns over Tunisia’s Regulatory Framework

The Financial Action Task Force (FATF) has expressed concerns over Tunisia’s adherence to its recommendations aimed at combating money laundering and terrorist financing. In a recent assessment, the international organization highlighted several areas where Tunisia needs to improve its regulatory framework and supervision of financial institutions.

Key Issues Identified by FATF

  • Adequate Regulation and Supervision: The country should ensure that all financial institutions are subject to adequate regulation and supervision.
  • Prevention of Shell Banks: Tunisia should take steps to prevent shell banks from operating within its borders, as well as individuals with criminal connections from holding significant or controlling interests in financial institutions.

Additional Concerns

  • Robust System of Consolidated Group Supervision: The country’s regulatory body should apply the same standards for prudential purposes as it does for anti-money laundering (AML) and counter-terrorism financing (CTF) purposes.
  • Risk-Based Approach to Supervision: Tunisia needs to strengthen its risk-based approach to supervision, which involves allocating resources based on the level of risk associated with a particular institution or group.

Recommendations from FATF

  • Adequate Resources: Financial supervisors should have adequate resources, including human, technical, and financial resources, as well as operational independence and autonomy.
  • Regular Assessments: Supervisors must conduct regular assessments of the risks present in a country.

Deadline for Implementation

Tunisia has until next year’s review to address these concerns and implement the necessary reforms. Failure to comply with the FATF recommendations could result in the country being placed on a watchlist or even blacklisted by the international organization.

Government Response

The Tunisian government has acknowledged the importance of complying with the FATF recommendations and has pledged to take concrete steps to strengthen its regulatory framework and supervision of financial institutions. However, it remains to be seen whether the country will be able to meet the required standards in time for next year’s review.