Tunisia’s Compliance Programs in Banking Under Scrutiny

Overview

A recent report by the Financial Action Task Force (FATF) has assessed Tunisia’s progress in implementing international anti-money laundering and combating the financing of terrorism (AML/CFT) standards. The country’s compliance programs in banking have been rated, with mixed results.

Areas of Improvement

Tunisia needs to improve its AML/CFT framework in several areas:

• Partially Compliant:
  • National cooperation and coordination (R.2)
  • Customer due diligence (R.10)
  • Reporting of suspicious transactions (R.20)
• Non-Compliant:
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Powers of supervisors (R.27)

Areas of Strength

Tunisia has been rated as largely compliant in several areas:

• Assessing risk and applying a risk-based approach (R.1)
• Money laundering offence (R.3)
• Confiscation and provisional measures (R.4)
• Financial intelligence unit is fully functional, with the ability to collect and analyze suspicious transaction reports

Recommendations for Improvement

To address the identified weaknesses, Tunisia should:

• Enhance its national cooperation and coordination mechanisms
• Improve its customer due diligence practices
• Strengthen its reporting of suspicious transactions
• Develop a more effective regulatory framework for designated non-financial businesses and professions (DNFBPs)
• Enhance its powers of supervisors

Conclusion

The FATF report provides a comprehensive assessment of Tunisia’s AML/CFT framework, highlighting areas of strength and weakness. While the country has made progress in implementing certain technical requirements, there is still work to be done to fully comply with international standards. By implementing these recommendations, Tunisia can improve its AML/CFT framework and reduce the risk of money laundering and terrorist financing in the country’s banking sector.