FATF Status

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

Latest FATF Statement - 25 October 2024

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 Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Algeria was undertaken in 2023. According to that Evaluation, Algeria was deemed Compliant for 2 and Largely Compliant for 9 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 efforts have evolved since the establishment of the Central Office for the Suppression of Corruption in 2013 and the National Organization for the Prevention and Fight Against Corruption in 2010, yet challenges remain. Corruption is identified as a significant barrier to foreign direct investment, with a culture of patronage and bribery prevalent in the economy, while enforcement of anti-corruption laws is inconsistent. Despite the existence of legal frameworks and some whistleblower protections, the effectiveness of these measures is undermined by a lack of institutional reforms and the fear of repercussions among officials.

Algeria's economy is 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 in various sectors such as agriculture and renewable energy, challenges like bureaucratic hurdles, regulatory uncertainty, and a preference for local production hinder foreign business operations.

Algeria's investment climate is characterized by a state enterprise-dominated economy that presents challenges for foreign businesses, particularly due to an inconsistent regulatory environment and protectionist policies. While the government encourages foreign direct investment (FDI) in sectors such as agriculture, renewable energy, and healthcare, the 51/49 ownership rule in strategic sectors and frequent regulatory changes create uncertainty for investors. Despite these challenges, opportunities exist across various sectors, and the government has established agencies like the Agence Algérienne de Promotion de l’Investissement to facilitate investment.