Tunisia Takes Step Towards International Best Practices: Gradual Elimination of Bearer Shares

A Move Towards Greater Transparency and Anti-Money Laundering Measures

In an effort to reduce the risk of money laundering and terrorist financing, Tunisia is phasing out bearer shares from its financial system. The country’s new banking law, Law 2003-75, requires financial institutions to adopt robust internal controls and reporting mechanisms.

Eliminating Bearer Shares: A Positive Step

Experts believe that the elimination of bearer shares will help reduce the risk of money laundering and terrorist financing. However, the total amount of bearer shares in Tunisia has not been disclosed.

Strengthening Internal Controls and Reporting Mechanisms

The CTAF (Committee for Combating Money Laundering and Financing of Terrorism) directive reinforces the need for financial institutions to establish structured internal control mechanisms. This includes:

• Setting up due diligence procedures for business relationships
• Reporting suspicious transactions
• Establishing robust internal controls and reporting mechanisms

Challenges with the Current Reporting Mechanism

Experts have noted several challenges with the current reporting mechanism, including:

• Lack of distinction between unusual and suspicious operations, leading to ambiguities in the reporting process
• Requirement to report suspicions before the operation has taken place, creating a high threshold for reporting

Addressing the Issues

To address these issues, Tunisian authorities are being urged to:

• Clarify the definitions of unusual and suspicious transactions
• Eliminate automatic suspension and freezing of transactions that have led to reports
• Allow for more effective collection of information at both national and international levels

Sanctions and Liability

The law provides for sanctions against institutions that tip off customers about reported transactions, which could indirectly reveal that a report has been filed. Reporting institutions should not be held liable for damages when filing reports in good faith.

Supervisory Authorities’ Role

Supervisory authorities are also being encouraged to:

• Accelerate their integration with prudential supervision
• Allow for more effective monitoring of the new obligations imposed on financial institutions

Conclusion

Tunisia’s gradual elimination of bearer shares is seen as a positive step towards international best practices in anti-money laundering and combating the financing of terrorism.