Algeria Country Summary

FATF Status

Algeria is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 February 2025

In October 2024, Algeria made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in May 2023, Algeria has made progress on many of the MER’s recommended actions including by more effectively pursuing money laundering investigations and prosecutions. Algeria will continue to work with FATF to implement its action plan by: (1) improving risk-based supervision, especially for higher risk sectors, including through the adoption of new procedures, risk assessments, supervision manuals and guidelines, as well as undertaking inspections and applying effective, proportionate and dissuasive sanctions; (2) developing an effective framework for basic and beneficial ownership information; (3) enhancing its regime for suspicious transaction reports; (4) establishing an effective legal and institutional framework for targeted financial sanctions for terrorism financing; and (5) implementing a risk-based approach to oversight of non-profit organisations, without disrupting or discouraging legitimate activity.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Algeria was undertaken in 2024. According to that Evaluation, Algeria was deemed Compliant for 2 and Largely Compliant for 14 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Algeria's anti-corruption framework includes the Central Office for the Suppression of Corruption and the National Organization for the Prevention and Fight Against Corruption, established to investigate bribery and promote transparency. Despite these efforts, corruption remains a significant barrier to foreign direct investment, with reports of fear among officials delaying decision-making. The government has intensified anti-corruption measures, including imprisoning prominent figures, but challenges persist due to inadequate whistleblower protections and a lack of comprehensive institutional reforms.

Algeria's economy is predominantly state-controlled and heavily reliant on hydrocarbon production, which constitutes 95% of export revenues and about 40% of government income. Despite government efforts to attract foreign direct investment (FDI) in various sectors such as agriculture and renewable energy, challenges like bureaucratic hurdles, regulatory uncertainty, and protectionist policies create a difficult environment for U.S. businesses.

Algeria's investment climate is characterized by a challenging business environment marked by a state enterprise-dominated economy and a preference for foreign direct investment (FDI) over foreign financing. Despite government encouragement for U.S. companies to invest in sectors like agriculture, renewable energy, and healthcare, foreign investors face regulatory uncertainty, bureaucratic hurdles, and protectionist policies that favor local firms. The 2022 Investment Law aims to modernize the investment framework, but the persistent 51/49 ownership requirement in strategic sectors poses significant challenges for foreign businesses.