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 persist. Despite having laws and bodies in place, corruption remains a significant barrier to foreign direct investment, with reports of bribery and nepotism prevalent in the economy. The government's focus has largely been on prosecuting past corruption rather than implementing reforms to prevent future occurrences, leading to a culture where officials are hesitant to make decisions due to fear of corruption accusations.

Algeria's economy is heavily reliant on hydrocarbon production, which constitutes 95% of export revenues and about 40% of government income. While the government encourages foreign direct investment in various sectors such as agriculture, renewable energy, and healthcare, challenges such as a complicated regulatory environment, protectionist policies, and a preference for local production create significant hurdles for foreign businesses.

Algeria's investment climate is characterized by a challenging business environment marked by a state enterprise-dominated economy and protectionist policies that create regulatory uncertainty. While the government encourages foreign direct investment (FDI) in various sectors such as agriculture, renewable energy, and healthcare, foreign investors face hurdles including complex customs procedures, shifting regulations, and a requirement for majority local ownership in strategic sectors. Despite these challenges, agencies like the Agence Algérienne de Promotion de l’Investissement (AAPI) aim to facilitate investment through incentives and a digital platform for investors.