Tunisia Faces Increased Scrutiny on Financial Crime Risk as Democracy Slips
The once heralded success story of the Arab Spring, the Republic of Tunisia, now faces renewed scrutiny regarding its financial crime risks. This assessment comes as a result of Tunisia’s democratic backsliding in recent years and increased monitoring by the Financial Action Task force (FATF).
Concerns and Regulatory Action
According to the Country Risk Report, in its 2016 Mutual Evaluation, Tunisia was placed on FATF’s “grey list” due to concerns around:
- Anti-Money Laundering (AML)
- Countering the Financing of Terrorism (CTF)
However, Tunisia’s improved national response subsequently led to a re-rating in 2020 and Tunisia’s removal from the grey list. Despite this, there are still key areas of concern:
Areas of Concern
- Corruption: Tunisia’s history of corruption continues to be a major issue, contributing significantly to its financial crime risk.
- Smuggling of Illicit Goods: Due to Tunisia’s strategic location and porous borders, it is a notable exporter of illegally traded goods across the Middle East and North Africa (MENA) region.
- Terrorist Financing: The risk of terrorist financing is a pressing concern in the context of Tunisia’s ongoing political instability.
The country’s location and porous borders make it a significant source of financial crime flows, particularly into neighboring countries like Libya and Algeria.
Implications for Business and Investors
This financial crime risk assessment is essential information for businesses and investors operating in or considering investments in Tunisia. Understanding these risks and potential mitigating strategies can help mitigate potential financial consequences.
You can download the Tunisia Country Risk Factsheet for more detailed information and insights.