AML/CFT compliance in Algeria: the complete guide for businesses in 2026

An international transfer held up, a correspondent bank demanding a twenty-page questionnaire, an inspection that flags incomplete customer files: for many Algerian executives, anti-money laundering has become a very concrete operational reality. AML compliance Algeria is no longer a topic reserved for bank lawyers. It determines access to financing, the trust of foreign partners and, increasingly, the personal accountability of executives.

2026 marks a turning point. Algeria left the FATF grey list on 19 June, the Bank of Algeria unified the KYC procedure and Law No. 25-10 strengthened the framework further. This guide gives you the big picture: who is concerned, which texts apply, who supervises, how to build an effective framework and where to start.

1. Who is concerned by AML/CFT compliance in Algeria?

Financial institutions

The first entities subject to Law No. 05-01 are financial sector players: banks, financial institutions, Algérie Poste, insurance companies, stockbrokers and, more broadly, any entity that receives funds, makes payments or manages assets on behalf of third parties. They are also the most closely supervised.

Designated non-financial businesses and professions

The framework extends to professions exposed by the nature of their transactions: notaries, lawyers, bailiffs and auctioneers, chartered accountants and statutory auditors, real estate agents and dealers in precious metals and stones, among others. The authorities overseeing these professions are gradually setting out, through sector-specific texts, the due diligence obligations that apply to them.

Non-obliged companies, exposed indirectly

A manufacturer, an importer or a start-up is not directly an obliged entity. Yet their banks apply increasingly demanding KYC measures to them: identification of beneficial owners, evidence of the source of funds, documentation of unusual transactions. An importer unable to explain its shareholding structure or the origin of a shareholder loan may see its transactions delayed, or even its banking relationship called into question. Understanding the AML/CFT logic helps you anticipate these requests rather than endure them.

2. The legal framework: from Law 05-01 to Instruction 04-2026

A founding law reformed several times

Law No. 05-01 of 6 February 2005 on the prevention of and fight against money laundering and terrorist financing remains the reference text. It was amended by Ordinance No. 12-02 in 2012, then substantially overhauled by Law No. 23-01 of 7 February 2023, which notably brought proliferation financing of weapons of mass destruction into scope. For a detailed analysis of this reform, read our article on Law 23-01 on money laundering in Algeria.

Law No. 25-10 of 24 July 2025, published in Official Journal No. 48 of 2025, requires a national and sectoral risk assessment that is regularly updated and shared with obliged entities, and tightens the ban on crypto-assets. The same Official Journal publishes Law No. 25-11 on personal data protection, which must be reconciled with the collection of KYC information.

Bank of Algeria texts

Instruction No. 04-2026 is particularly far-reaching: customer risk rating on four parameters, consultation of the CNRC beneficial ownership register, senior management approval for onboarding a PEP, defined cases for refusing a relationship, and file reviews at least annually for high risk, every three years for medium risk and every five years for low risk.

3. Key players: CTRF, Bank of Algeria, FATF

The CTRF, Algeria's financial intelligence unit

Reporting to the Ministry of Finance, the CTRF receives and analyses suspicious transaction reports, then refers cases to the judicial authorities where the facts warrant it. It also sets the format of reports, as shown by its Instruction No. 02 of 4 December 2023. For an obliged entity, the quality of the reports sent to the CTRF is one of the first indicators of maturity: one well-reasoned report, supported by documents, is worth more than ten defensive filings without analysis.

The Bank of Algeria and the Banking Commission

The Bank of Algeria issues the rules applicable to the banking sector and monitors compliance, both off-site and on-site. The Banking Commission can impose disciplinary sanctions for breaches. Other sectors fall under their own supervisory authorities, which are responsible for ensuring that the professions they oversee meet their AML/CFT obligations.

The FATF and MENAFATF

The FATF sets international standards; MENAFATF, the FATF-style regional body for the Middle East and North Africa, conducts mutual evaluations of its members, including Algeria. These evaluations led to the country's grey listing on 25 October 2024, then to its removal on 19 June 2026.

4. The seven pillars of an effective AML/CFT framework

A compliance framework is not just a procedure. It rests on seven pillars that must work together.

Risk-based approach and KYC

• Risk-based approach: map exposure by customer, product, channel and geography, drawing on the national assessment required by Law No. 25-10;
• KYC: identify and verify the customer and its beneficial owners, understand the purpose of the relationship, apply enhanced due diligence to PEPs and high-risk situations, then update files according to their risk level.

Monitoring, reporting and asset freezing

• Transaction monitoring: alert scenarios suited to the business profile, documented analysis of alerts;
• Suspicious transaction reporting: a clear internal process, controlled timelines, strict confidentiality towards the customer;
• Asset freezing: screening of customers and counterparties against sanctions lists, notably those of the United Nations Security Council, with immediate implementation.

Training and governance

• Training: awareness for all staff, in-depth modules for customer-facing teams and analysts;
• Governance: a compliance officer with authority and resources, regular reporting to senior management and the board, ongoing and periodic control.

This last pillar is often the most neglected. To position this function properly, read our guide to the compliance function in Algeria. In our engagements in Europe and the Gulf, we have found that failing frameworks rarely lack procedures, but almost always suffer from weak application and insufficient management involvement.

5. After the grey list: a roadmap for executives

What leaving the grey list changes, and what it does not

Removal from the grey list improves the country's image and should ease relationships with correspondent banks. But it does not reduce any obligation. The next mutual evaluation, expected around 2029, will measure actual effectiveness: relevant suspicious transaction reports, up-to-date KYC files, sanctions actually enforced. Easing off would be the worst possible strategy.

A five-step roadmap

1. Take stock: measure the gap between your practices and the texts, starting with a targeted compliance assessment;
2. Update your risk assessment in light of the national and sectoral assessment;
3. Remediate KYC files, prioritising high-risk customers and consulting the beneficial ownership register;
4. Strengthen governance: reporting line, resources and reporting of the compliance function, formal approval by management;
5. Test and train: sample testing, review of alert scenarios, documented annual training.

The executive's personal role

Executives set the tone. Allocating a budget, backing the decision to turn down a dubious customer, asking for an AML/CFT dashboard every quarter: these simple actions carry more weight than a fifty-page policy. They also show the supervisor that the compliance culture is driven from the top.

Conclusion: making AML/CFT compliance a lasting asset

AML compliance Algeria has entered a phase of maturity. The framework is now dense, from Law No. 05-01 as reformed by Laws No. 23-01 and No. 25-10 to Regulation No. 24-03 and Instruction No. 04-2026, and the expectations of international partners remain high. Companies that invest now in a risk-based approach, rigorous KYC, effective monitoring and committed governance do more than avoid sanctions: they secure their banking relationships, reassure their investors and prepare calmly for the upcoming FATF evaluation. Start by measuring where you stand, then move forward in realistic steps.

Fayçal Lounes

Founder of Hodemia Consulting

Nearly 20 years of international experience in regulatory compliance, risk and governance (EY in Luxembourg, San Francisco and London; Director, Regulatory & Compliance Services at KPMG Middle East). Certified coach, trainer and academic.