Financial Crime World

Tunisia’s Financial Crime Landscape: Corruption, Money Laundering, and More

Introduction

Transparency International ranked Tunisia 75th out of 180 countries in its 2022 Corruption Perception Index, highlighting the country’s vulnerability to corruption. This article provides an overview of Tunisia’s financial crime landscape, covering corruption, money laundering, commercial fraud, cybersecurity threats, and other related issues.

Corruption

Public procurement, national resources, and public infrastructure have been particularly susceptible to corruption in Tunisia. Irregular payments and gifts are often required to secure government contracts, making the country a hub for corrupt activities.

Money Laundering and Smuggling

Tunisia is a significant transit area for smuggled capital and foreign currencies, particularly from neighboring countries Libya and Algeria. The large informal economy, prevalence of the hawala system, and widespread use of fiat money in the Tunisian market heighten the risk of money laundering.

  • Trade-based money laundering: Tunisia has been estimated to have the highest rate of trade misinvoicing in the Middle East and North Africa (MENA) region.
  • Smuggling of counterfeit goods: Extremist groups in Tunisia engage in the smuggling of counterfeit goods across borders, providing them with a sustainable source of financing.

Commercial Fraud

Commercial fraud is rampant in Tunisia, with the trafficking of counterfeit goods being a major concern. This has led to an increase in trade-based money laundering and other financial crimes.

Cybersecurity Threats

Tunisia ranks 83rd out of 160 countries in the 2022 National Cyber Security Index. The majority of cyberattacks in Tunisia are fraud and extortion attempts via:

  • Ransomware
  • Denial-of-service attacks
  • Social engineering/impersonations

These attacks often have a global reach, posing significant risks to individuals, businesses, and institutions.

Terrorist Financing and Extremism

Tunisia’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime has improved significantly since the 2011 Revolution. However, concerns remain about:

  • Terrorist financing: Support for foreign terrorist fighters and domestic extremist groups.
  • Smuggling of small arms and light weapons: Tunisia is a significant transit point in North Africa.

Environmental Crimes

The country faces environmental crimes such as:

  • Illegal logging
  • Poaching
  • Illicit market for flora and fauna

These crimes are linked to organized crime groups, posing risks to the environment and local communities.

Tax Evasion and Shell Companies

Tax evasion is another issue in Tunisia, with limited liability companies being used as shell companies for international illicit flows. The country’s National Register of Enterprises was updated in 2019, setting a beneficial owner threshold at 20%.

Human Trafficking and Modern Slavery

Tunisia faces significant concerns about modern slavery and human trafficking, including:

  • Children: Vulnerable to trafficking for sexual exploitation and forced labor.
  • Foreign nationals: Exploited for forced labor in various sectors.

Overall, Tunisia’s financial crime landscape is complex and multifaceted, posing significant risks to the country’s economy, institutions, and citizens. It is essential to address these issues through effective policies, regulations, and enforcement mechanisms.