AML/CFT obligations for exchange offices and exchange agents in Algeria (2026)

A client who comes back every day to sell a few hundred euros, a "traveller" unable to show any ticket, a group of people arriving together with identical amounts: manual currency exchange is by nature a high-turnover cash business, highly attractive to anyone wishing to convert funds of dubious origin discreetly. The AML/CFT obligations for exchange offices and exchange agents therefore require constant vigilance, transaction by transaction.

The stakes are twofold. First, licensed exchange offices were designed precisely to push back the informal currency market: their credibility depends on not becoming an extension of it. Second, since Algeria left the FATF grey list on 19 June 2026, attention has shifted to how effective frameworks really are, including among small reporting entities.

1. Applicable texts and supervisory authority

Law No. 05-01 of 6 February 2005, amended by Law No. 23-01 of 7 February 2023 and supplemented by Law No. 25-10 of 24 July 2025, lists exchange offices and exchange agents among the financial institutions subject to AML/CFT rules. Its Article 10 bis 3 designates the Banking Commission as their supervisor, alongside banks, financial institutions and the financial services of Algérie Poste. To understand the reform, read our article on Law 23-01 on money laundering in Algeria.

Access to the business is governed by Bank of Algeria Regulation No. 23-01 of 21 September 2023 setting the conditions for the authorisation, licensing and operation of exchange offices, issued under Monetary and Banking Law No. 23-09 of 21 June 2023. Its key points:

• authorisation to incorporate granted by the Monetary and Banking Council, which decides within three months of receiving a complete file, followed by a licence granted by the Governor of the Bank of Algeria after an inspection of the premises;
• minimum capital fully paid up in cash on incorporation: DZD 5,000,000 for a joint-stock company, DZD 1,000,000 for an SARL or SAS; only joint-stock companies may open several counters;
• any change to the articles of association, in particular to capital or shareholding, subject to prior authorisation by the Monetary and Banking Council;
• a scope limited to manual exchange with individuals: selling currency to residents for travel, medical care, business trips or studies and training abroad; selling currency to non-residents for leftover dinars obtained from a prior currency sale; buying currency from residents and non-residents.

Implementing rules are set by Bank of Algeria instructions. In late January 2025, the press reported the Bank of Algeria's inspection of four first exchange offices set up at the Algiers ferry terminal. For AML/CFT, Bank of Algeria texts, in particular Regulation No. 24-03 of 24 July 2024, form the Banking Commission's reference framework; check with your Bank of Algeria contact which provisions apply directly to your status. Suspicious transaction reports go to the CTRF, which reports to the Ministry of Finance.

2. Key obligations

Risk classification

Even a small office must document its risk assessment: client profiles (residents, non-residents, regular clients), currencies and denominations handled, amounts, counter location (border area, port, airport, shopping centre), opening hours and channels. This analysis must incorporate the findings of the national and sectoral risk assessment that Law No. 25-10 requires to be shared with reporting entities. It determines internal alert thresholds and the level of due diligence applied to each client category.

Customer due diligence and beneficial owners

In manual exchange, the client is almost always occasional. Each transaction therefore requires checking a valid official identity document, recording the relevant data and checking that the stated purpose matches the supporting documents: travel ticket, mission order, enrolment certificate or medical file as the case may be. For a non-resident converting dinars back, Regulation No. 23-01 requires those leftover dinars to come from a prior currency sale, which must be evidenced. Finally, check that the client is acting on their own behalf: someone transacting for an unidentified third party is a major red flag. Politically exposed persons call for enhanced due diligence and management approval.

Suspicious transaction reporting to the CTRF

Any transaction or attempted transaction that you suspect involves funds of illicit origin or linked to terrorist financing must be reported to the CTRF, including when the client abandons the transaction. Reports are strictly confidential: neither the client nor any third party may be informed, and counter staff must never hint that a report is being considered. Counter staff flag, the compliance officer analyses, documents and reports.

Asset freezing and targeted financial sanctions

An exchange office must apply without delay freezing and prohibition measures linked to targeted financial sanctions, in particular those arising from UN Security Council resolutions. Each client's name must be screened before the transaction is executed, which requires a tool, however simple, updated whenever lists change, and a clear procedure in the event of a match.

Record keeping

Copies of identity documents, purpose evidence, transaction slips, registers and alert analyses must be kept for the legal retention period, so that each transaction can be reconstructed and requests from the Banking Commission or the CTRF answered without delay.

Training and internal organisation

Appoint a compliance officer as the CTRF contact, even in a small business, and formalise written procedures approved by management. Counter staff, on the front line, must be trained to recognise red flags, to refuse a transaction without tipping off the client and to spot counterfeit notes and forged documents. Periodic internal or external testing checks that these rules are actually applied. Our guide to the compliance function in Algeria explains what makes the function effective.

3. Sector-specific typologies and red flags

• repeated transactions, on the same day or on close days, for similar amounts just below internal due diligence thresholds;
• several clients arriving together or one after another with identical amounts, or the same person accompanying different clients;
• sale of large amounts of foreign currency without a plausible explanation of their origin;
• inconsistent stated purpose: travel without a ticket, study fees without enrolment, amounts out of proportion to the destination;
• a non-resident wishing to convert dinars back without evidence of a prior currency sale;
• a client who abandons the transaction as soon as an identity document or supporting evidence is requested;
• notes in poor condition, bundles wrapped in other institutions' bands, or suspected counterfeit notes;
• clients known to be linked to the informal currency market, or intermediaries visibly acting for third parties.

4. Common mistakes

Small cash-intensive financial businesses show typical weaknesses that we encounter regularly.

• Treating AML/CFT as a licensing formality: the file is polished to obtain authorisation, then procedures are no longer applied at the counter.
• Unusable transaction records, on paper or in a spreadsheet with no search by client, making it impossible to detect structuring.
• No sanctions screening, or manual screening against an outdated list.
• Commercial pressure taking over: counter staff hesitate to turn away a regular client, or are paid on volume.
• A compliance officer wearing every hat, with neither the time nor the training to analyse alerts and draft a suspicious transaction report.

5. How Hodemia Consulting supports exchange offices and exchange agents

Fayçal Lounes, with nearly twenty years of regulatory compliance experience in Europe, the United States and the Middle East, supports exchange offices from the application file through to day-to-day operations:

• Compliance diagnostic (2 to 4 weeks): review of your procedures, recording tool and counter practices, with a prioritised action plan. See our article on the compliance diagnostic.
• AML/CFT programme set-up and KYC remediation: risk assessment, procedures proportionate to your size, structuring detection scenarios, sanctions screening, CTRF reporting workflow.
• Compliance & Ethics training (1 day) for counter staff and managers, built around practical cases. Discover our training courses.
• Leadership & Compliance seminar (2 days) for shareholders and executives.

To discuss it, get in touch, and find an overview of the framework in our guide to AML/CFT compliance in Algeria.

Conclusion: a young sector that must prove its strength

The AML/CFT obligations for exchange offices and exchange agents are played out at the counter: identifying every client, checking the purpose, linking transactions to detect structuring, screening for sanctions and reporting to the CTRF without hesitation. Regulation No. 23-01 has paved the way for formal currency exchange; its success depends on operators not acting as a relay for the informal market. After leaving the grey list, the Banking Commission and FATF assessors will expect concrete evidence. Offices that build their framework from day one protect their licence and their reputation.

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.