Algeria’s Shadowy Fundraising Tactics Exposed: Illegal Sources Fuel Economy

Illegal Funds Fuel Economy in Algeria

A recent report has uncovered alarming revelations about Algeria’s dependence on illegal funds to sustain its economy. The country is said to be using money from drug trafficking, extortion, and hostage-taking to fuel its economy, highlighting the nation’s vulnerability to money laundering and terrorist financing (ML/TF) risks.

Banking Sector Susceptible to ML/TF

The Algerian banking sector is particularly vulnerable to ML/TF due to its size and diversity of services offered. The real estate and postal sectors also pose significant risks due to their extensive geographical reach and cash-based operations.

Efforts to Combat Money Laundering and Terrorist Financing

In response to these concerns, Algeria has taken steps to strengthen its anti-money laundering and counter-terrorist financing (AML/CFT) measures. Law No. 05-01 of 2005 criminalized ML/TF, while Decision 12-02 of 2012 and Law 15-06 of 2015 further enhanced AML/CFT regulations.

• The country has established a Counter-Terrorism Financing Committee (CTRF) to combat the financing of terrorist activities.
• The CTRF is responsible for receiving and processing suspicious transaction reports (STRs), as well as disseminating them to relevant authorities when necessary.

Inadequate AML/CTF Regime

Despite these efforts, critics argue that Algeria’s AML/CFT regime remains inadequate due to a lack of transparency in its financial sector and insufficient supervisory controls. The report highlights the need for greater cooperation between regulatory bodies, law enforcement agencies, and the private sector to effectively combat ML/TF risks.

Illegal Funds Used to Fund Various Sectors

Sources have revealed that illegal funds are being used to fund various sectors, including real estate, construction, and even government projects. This has raised concerns about the potential diversion of public funds to illicit activities and the undermining of the country’s economic stability.

• Critics warn that continued dependence on illegal funds will only exacerbate the country’s economic woes and increase its vulnerability to ML/TF risks.
• The Algerian government has remained tight-lipped on the issue, with officials refusing to comment on the allegations.

Reforming Algeria’s Financial Sector

As Algeria struggles to address these concerns, it remains to be seen whether the country can effectively reform its financial sector and break free from its reliance on illegal funds.