EU Labels Algeria a High-Risk Country for Money Laundering and Terror Financing

Watan–Algeria has been officially placed on the European Union’s list of high‑risk countries for money‑laundering and terror‑financing, under a resolution adopted by the European Parliament last Wednesday—a move warmly welcomed by the French far‑right, which is notoriously hostile toward Algeria.

With this new classification, any financial operation involving Algerian entities will be subjected to tougher monitoring and enhanced due‑diligence procedures within EU institutions. The goal is to reduce illicit‑financing risks and ensure greater transparency in the movement of capital.

The Parliament’s vote followed technical reports and recent evaluations that revealed “major shortcomings” in Algeria’s prevention system—particularly in tracking funds, supervising non‑governmental organisations (NGOs), and cooperating internationally on judicial matters. Consequently, European banks and financial institutions will now have to apply extra controls whenever they deal with their Algerian counterparts.

The measure will become legally binding in the coming weeks, once it enters into force. Several MEPs celebrated the outcome—among them French deputy Laurence Trochu of the European Conservatives and Reformists Group, who called the step “good news” in a post on X. Trochu is a prominent voice of France’s far‑right in the European Parliament and operates under the wing of Marion Maréchal‑Le Pen, granddaughter of the late extremist leader Jean‑Marie Le Pen.

Algeria appears in a new batch of countries the European Commission added to its updated list, published on 10 June, alongside Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela. At the same time, several states were removed, including Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates.

In Algiers, the decision is expected to spark political and economic reactions because it could undermine foreign‑investor confidence, complicate dealings with financial institutions, and affect trade with the EU—Algeria’s largest commercial partner. Some Algerian circles called the EU ranking surprising and suspiciously timed, especially as a number of MEPs have recently urged sanctions on Algeria to pressure it to release Franco‑Algerian writer Boualem Sansal, charged with “undermining national unity.” Such appeals appeared in a European‑Parliament resolution asking the Commission to use coercive tools against Algeria.

Significantly, the EU designation coincides with the Algerian government’s submission of a new draft law on preventing and combating money‑laundering and terror‑financing. Presenting the bill to a parliamentary committee, Justice Minister and Keeper of the Seals Lotfi Boujemaa said the text is part of Algeria’s ongoing effort to align its legislation with international commitments “in light of the evolving nature of these crimes and the emergence of new techniques.”

Key provisions would:

• task the National Committee for Assessing Risks of Money‑Laundering, Terror‑Financing, and Proliferation‑Financing with identifying, evaluating, and understanding the risks facing Algeria, and making its findings available to the competent authorities;

• apply measures that ban the activities of individuals or entities listed on the national terrorism list, freeze or seize their assets, and prohibit any dealings with them—supplementing the sanctions already required by the UN Security Council’s consolidated list;

• empower judicial‑police officers and courts to detect related crimes more effectively, and allow the creation of joint investigative teams, permanent or temporary, including cross‑border teams for specialised (especially financial) investigations.

The bill also proposes tougher penalties for certain offences to match the gravity of the crimes, and obliges Algeria’s competent bodies to co‑operate and exchange information with foreign counterparts automatically or on request, under bilateral and multilateral treaties and in line with the country’s international obligations.

By reinforcing its legal arsenal, Algiers hopes to satisfy the recommendations of the Financial Action Task Force (FATF, known in French as GAFI) and exit, as soon as possible, the “grey list” it was placed on in October 2024—while also mitigating the fallout of the EU’s high‑risk designation.

On 25 October 2024, FATF grey‑listed Algeria for having strategic deficiencies in its anti‑money‑laundering and counter‑terror‑financing (AML/CFT) regime, though the country pledged to remedy them with FATF’s help. The watchdog identified weaknesses such as limited oversight of non‑bank financial institutions, lack of transparency on companies’ beneficial owners, poor effectiveness in reporting suspicious transactions, and shortfalls in enforcing terrorism‑financing sanctions.

In February and March 2025, FATF follow‑up reports noted technical progress on several gaps identified in the 2023 mutual evaluation—but Algeria has yet to publish all technical reports detailing reforms to its legislative and enforcement systems.