Tunisia’s Banking Sector Rocked by Fraudulent Activities
$1.2 Billion Lost Annually to Illicit Financial Flows in Tunisia
Illicit financial flows (IFFs) have become a major concern for Tunisia, with the country losing an astonishing $1.2 billion annually. This staggering figure is draining the economy and destabilizing politics and security.
Government Corruption at the Highest Levels Contributes to IFFs
Experts reveal that government corruption at the highest levels is a significant source of these outflows. Tax evasion, avoidance, and money laundering also contribute to the massive financial hemorrhage. The problem is believed to be much more extensive than available data suggests.
Smuggling and Corruption Widespread in Tunisia
The Tunisian Customs Agency seized smuggled goods worth $81 million in 2019, while fuel sales were found to be rife with illicit activity, with an estimated 30% of fuel sales coming from the black market. The smuggling of goods between Tunisia and its neighbors Algeria and Libya generates an estimated $2.4 billion and $1.8 billion respectively.
Corruption Affects Essential Government Institutions
Corruption is perceived as endemic in Tunisian society, affecting essential government institutions such as:
- Judiciary
- Legislative departments
- Police force
- Customs Even political parties like Ennahda have been accused of graft, with corruption becoming a destabilizing force that is eroding the country’s economy, politics, and security.
Impact on Economy and Education
The loss of income through IFFs has a profoundly negative impact on Tunisia’s economy, with key sectors such as:
- Healthcare
- Education suffering from lack of funding. The government could pay the salaries of 4,300 teachers for two years with just 10% of the suspected IFFs circulating in Tunisia.
Central Bank’s Financial Analysis Committee Struggles to Combat Fraud
The Central Bank’s Financial Analysis Committee (CTAF) has frozen approximately $70 million linked to suspected money laundering transactions, but lacks personnel to investigate and handle fraudulent activities.
International Cooperation Crucial in Combating IFFs
International cooperation is crucial in combating IFFs. Foreign financial centers like London and Switzerland have a role to play in helping countries like Tunisia recover public funds sent abroad. Governments and central banks must also take responsibility for facilitating tax evasion.
Example of International Cooperation: Swagg Man’s Case
The case of Swagg Man, a Franco-Tunisian rapper convicted of money laundering, serves as an example of international cooperation in combating IFFs. Switzerland returned $5.6 million he laundered to Tunisia to build a mosque and center for orphans.
Conclusion
Tunisia’s authorities need to fully reform their approach to implementing anti-corruption policy, ensuring accountability, integrity, and transparency. The country cannot afford to continue losing billions annually to fraudulent activities that undermine its economy, politics, and security.