Financial Crime World

Tunisia’s Financial Crime Epidemic: A Threat to Democracy and Economy

Introduction

Transparency International has recently ranked Tunisia 75th out of 180 countries in terms of perceived corruption, highlighting the rampant financial crimes plaguing the country. This report will examine the scope and impact of these financial crimes on Tunisia’s democracy and economy.

Corruption in Public Procurement and Infrastructure

  • Public procurement, national resources, and public infrastructure have been particularly vulnerable to corruption.
  • Irregular payments and gifts are often required to secure government contracts.
  • The country’s ranking highlights the need for urgent action to address corruption in these sectors.

Money Laundering and Smuggling

  • Tunisia is a significant transit area for smuggled capital and foreign currencies, especially from border countries Libya and Algeria.
  • The large informal economy, widespread use of fiat money, and prevalence of the hawala system heighten the risk of money laundering.
  • Commercial fraud, including the trafficking of counterfeit goods, is a common form of financial crime in Tunisia.

Cyberattacks and Terrorist Financing

  • Tunisia has struggled with cyberattacks, which often have a global reach. (83rd lowest level of cybersecurity resilience out of 160 countries surveyed)
  • Extremist groups are involved in smuggling counterfeit goods across borders and using zakat - religious tax - and front charitable associations to finance foreign terrorist fighters.
  • The country’s AML/CTF regime has improved since the 2011 Revolution, but further efforts are needed to combat financial crimes.

Other Forms of Financial Crime

  • Drug trafficking, fuel smuggling, and environmental crimes such as illegal logging and poaching are also prevalent in Tunisia.
  • Limited liability companies have been exploited as shell companies for international illicit flows.
  • Tax evasion remains a significant concern.

Modern Slavery and Human Trafficking

  • Children face high vulnerability to trafficking for sexual exploitation and forced labor.
  • Foreign nationals, including women, are often forced to work under exploitative conditions or subjected to forced labor in various sectors.

Conclusion

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Tunisia’s financial crime landscape is complex and multifaceted, requiring a comprehensive approach to address these threats to democracy and the economy. The country must prioritize combating corruption, money laundering, cyberattacks, and terrorist financing to ensure the integrity of its institutions and protect its citizens.