Financial Crime World

ALGERIA STEPS UP FINANCIAL INSTITUTION REGULATION EFFORTS

The Algerian government has been actively working to strengthen the regulation of its financial institutions. This effort is being supported by international technical assistance from organizations like the Mediterranean Trade and Investment Capacity Building (METAC) program.

Credit Rating System for Non-Financial Corporations

A recent mission by METAC provided a follow-up on the setup of a credit rating system for non-financial corporations. The project aims to operationalize the acceptance of bank credit claims as collateral, both for monetary policy and Emergency Liquidity Assistance (ELA). Key developments from this mission include:

  • Clarification of outstanding recommendations: METAC’s hands-on mission clarified outstanding recommendations from an initial mission.
  • Update of roadmap: The project roadmap was updated to take into account the Banque d’Algérie’s progress and experience.

Data Collection for Country-Specific Calibration

The Algerian central bank has made good progress on the organizational level, but more needs to be done with respect to data collection. METAC will provide further support in this area to allow for a country-specific, statistical calibration of the credit rating process.

Internal Credit Rating System for Credit Claims

METAC conducted a consultation with the Banque d’Algérie on an ongoing technical assistance project to establish an internal credit rating system for credit claims. The project involves:

  • Setting up a credit rating scale: A credit rating scale will be set up for Algerian non-financial corporations.
  • Mapping into haircut schedule: The credit rating scale will be mapped into a haircut schedule for credit claims.

Regulations for Banks and Financial Institutions

The Algerian government has been working to develop new regulations for banks and financial institutions. METAC supported the Banque d’Algérie in developing these regulations, which were tailored to the Algerian banking sector characteristics and legal framework. Key aspects of these regulations include:

  • Defining outsourced activities: Essential outsourced activities are defined.
  • Minimum expectations regarding outsourcing process: Minimum expectations regarding the outsourcing process are developed.

Capacity Building for Supervisors

METAC provided capacity building to supervisors on the risks and challenges related to outsourcing arrangements. This effort aimed to enhance their understanding, awareness, and ability to assess these risks.

Compliance Risk Management Strategy for Extractive Industries

METAC supported the Algerian General Directorate of Taxes (DGI) in designing a compliance risk management strategy for the extractive industries. Key developments from this project include:

  • Environmental scan: An environmental scan was conducted to review local circumstances and global EI business models.
  • Review of tax planning and regulatory frameworks: The mission reviewed global EI business models, tax planning, and regulatory frameworks.
  • Draft mid-term program: A draft mid-term program was prepared to provide regular and on-demand advice throughout FY25.