HIBAPRESS
While the Financial Action Task Force (FATF) continues to include Algeria in its grey list among countries that are not making sufficient efforts to combat money laundering and terrorist financing, the Algerian authorities find themselves compelled to admit the failure of their banking and financial system, which suffers from serious loopholes that have become a growing international concern.
A recent report issued by the Bank of Algeria in cooperation with the World Bank, entitled "Summary of the Sectoral Assessment Report on the Risks of Money Laundering and Terrorist Financing in the Banking Sector and Algeria Post", revealed a disturbing reality that exposes the fragility of the Algerian financial system and its transformation into a conduit for money laundering and the financing of suspicious activities, in light of the spread of a parallel economy that consumes between 30 and 35% of the gross domestic product. The report clearly indicated that funds from illegal activities easily find their way into several sectors, especially the real estate market, making Algeria a fertile ground for the circulation of money from organized crime and terrorism. Despite what the authorities are talking about in terms of "legal and institutional reforms", such as the law on the prevention of money laundering and terrorist financing or the monetary and banking law of 2023, the results on the ground remain weak, as the report classified the level of risk in the Algerian financial system between "medium and high". The Bank of Algeria frankly admitted that the parallel market poses the biggest challenge to the authorities, as it remains responsible for the circulation of huge sums of money outside official channels, which makes tracking the movement of funds a near-impossible task and creates an ideal environment for money laundering and terrorist financing operations. Experts from the International Monetary Fund indicate that the Algerian banking system still relies excessively on cash transactions, both in banks and at the Algeria Post institution, which reflects weak control and lack of transparency. The report also recorded the continued dominance of the culture of cash payments among companies and individuals alike, which greatly limits the ability of the financial authorities to monitor financial flows, despite the state's attempts to promote the use of electronic payment methods, which are still limited in spread. This report once again exposes the weakness of the Algerian financial system and its inability to keep pace with international standards, at a time when the infiltration of the informal economy is deepening and its connection to suspicious networks is increasing, which harms the country's reputation and economic interests.
