Financial Crime World

Tunisia’s Financial Compliance Framework: MENAFATF Evaluates AML/CFT Measures

The Middle East and North Africa Financial Action Task Force (MENAFATF) has assessed Tunisia’s compliance with Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) measures. In an executive summary of its Mutual Evaluation Report, the World Bank outlines Tunisia’s progress in implementing the Financial Action Task Force (FATF) 40+9 Recommendations.

1. Overview of Tunisia’s Compliance with FATF Recommendations

The report evaluates Tunisia’s system based on a January 16-28, 2006 on-site visit and subsequent mid-March 2006 meetings. The assessment covers various aspects of the system, including legislation, enforcement, and institutional mechanisms.

  • Economic Context: Tunisia, with a GDP of US$28.7 billion (2005), has a relatively small amount of currency in circulation but has taken steps to combat bad checks for stronger banking confidence.
  • Payment Systems: Modern payment systems and encouragement of electronic cash, with occasional debt collection challenges leading to a preference for cash transactions.
  • Risk Assessment: The Tunisian authorities consider the risk of money laundering to be relatively low and focus significantly on terrorist matters.

Legislation: Tunisia’s Law 2003-75 criminalizes drug trafficking proceed laundering and defines AML/CFT offenses. It also provides for legal person liability, and a reporting suspicion mechanism.

However, there are unaddressed challenges, such as overly restrictive legal person liability conditions, regulatory clarifications, and practical implementation, and a lack of arrangements for examining requests for removal from lists or lifting of freezes.

3. Assets Freezing and Seizure Mechanisms

Tunisia has comprehensive legal mechanisms for freezing, seizing, and confiscating assets related to AML/CFT offenses. The authorities claim that these mechanisms have been used regularly. Seizure measures are used in preliminary phases of judicial proceedings, and the law allows for confiscating proceeds of terrorist financing and money laundering convictions, as well as optional asset confiscation.

  • Limitation: Tunisia lacks legal arrangements for administrative freezing in accordance with Resolution 1267 obligations and its ability to apply Resolution 1373 is limited without legal modifications.

4. Conclusion

MENAFATF’s evaluation of Tunisia’s AML/CFT framework identified both strengths, like comprehensive asset freezing and seizure mechanisms, and areas for improvement, such as administrative freezing provisions and legal changes to fully implement international resolutions.

The report recommends that Tunisia establish a mechanism for the freezing of assets in accordance with the requirements of Resolutions 1373 and 1267.