AML/CFT obligations for non-profits in Algeria (2026)

A fundraising drive during Ramadan, a gift from a benefactor living abroad, cash aid handed out in a border wilaya: these ordinary acts of associative life can, without controls, be diverted to finance terrorism. The AML/CFT obligations for non-profits follow a specific logic, however. Associations are not obliged entities in the way banks or notaries are: the law subjects them to a regime of their own, built on oversight and prudential rules and supervised by the ministry in charge of the Interior.

This regime is gaining importance. Algeria left the FATF grey list on 19 June 2026, and the next mutual evaluation, expected around 2029, will examine how the country protects its non-profit organisations without hindering their work. For chairs, treasurers and board members, the stakes are twofold: preserving donor trust and keeping access to banking services, which every association needs.

1. Applicable texts and supervisory authority

A specific regime within amended Law No. 05-01

Law No. 05-01 of 6 February 2005, extensively overhauled by Law No. 23-01 of 7 February 2023, distinguishes two categories. On one side are the obliged entities of Article 4 (financial institutions and designated non-financial businesses and professions), which must apply the full set of preventive measures, including suspicious transaction reporting. On the other are associations and non-profit organisations, covered by Articles 5 bis 4 and 5 bis 5: any association that collects, receives, gives or transfers funds is subject to appropriate oversight and must comply with prudential rules, foremost among them the obligation to refrain from accepting cash without prior authorisation. For an overview of these reforms, see our analysis of Laws 05-01, 23-01 and 25-10.

Law No. 25-10 and the source of funds

Law No. 25-10 of 24 July 2025 (Official Journal No. 48 of 2025) strengthened the framework again, notably by requiring a national and sectoral risk assessment that is regularly updated. According to several media outlets (Algérie360, APA News), it tightens oversight of associations, which must justify the origin of their funds and refuse any donation of dubious or unidentifiable origin. Before drawing detailed procedures from it, refer to the published text.

The law on associations and the supervisory authority

Law No. 12-06 of 12 January 2012 on associations remains in force. It makes foreign-sourced funds subject to the prior approval of the competent authority and requires double-entry accounts validated by a statutory auditor, as well as a single account with a bank or public financial institution. A draft reform was put out for consultation, but no new law has been published to date. Finally, Article 10 bis 3 of Law No. 05-01 designates the ministry in charge of the Interior as the AML/CFT supervisory and oversight authority for associations and non-profit organisations.

2. Key obligations

Associations do not need to replicate a bank's framework. They must, however, show that they control where their funds come from and where they go, which calls for a few structured practices.

Assessing and classifying risks

The FATF revised Recommendation 8 on 16 November 2023 so that measures are targeted and proportionate: not all associations present the same risk. A neighbourhood cultural association does not have the profile of a charity transferring funds to conflict zones. Identify your exposure factors: nature of activities, origin of resources, share of cash, areas of operation, foreign partners. The national assessment required by Law No. 25-10 should feed into this analysis.

Knowing donors, beneficiaries and partners

For an association, the equivalent of KYC covers three circles: significant donors, whose identity and source of funds must be known; the partners and intermediaries who carry out projects; and the final beneficiaries of the aid. Keep an identification record for each large donation, check that partners are genuine and refuse funds whose origin cannot be established.

Reporting: no suspicious transaction report in the strict sense

Filing suspicious transaction reports with the CTRF is an obligation of Article 4 obliged entities, so an association is not bound by it in the same way. Its bank is, however: it monitors the association's account and may report an inconsistent transaction to the CTRF. Document every refused donation and every anomaly, inform your governing bodies, and seek advice if you face a serious matter.

Asset freezing and targeted financial sanctions

An association must never receive funds from, or pay funds to, persons or entities linked to terrorism. Screen the names of your major donors, partners and suppliers against sanctions lists, in particular those of the United Nations Security Council, before any financial commitment.

Traceability and record keeping

Double-entry accounts, a single bank account, annual financial reports, partnership agreements, evidence of aid distribution: this documentation is the association's best protection during an inspection by the ministry in charge of the Interior or a request from its bank. Keep it organised and accessible.

Governance, training and internal organisation

Appoint a board member responsible for controlling funds, require dual signatures for significant expenses and have the accounts validated each year by the statutory auditor. Raise awareness among the volunteers who collect donations: they are the first to spot an unusual offer.

3. Sector-specific typologies and red flags

The cases of non-profit abuse described by the FATF often rely on simple mechanisms. Watch for the following signals:

• a large, unexpected donation from an unknown person, with a request to pass it on quickly to a named third party;
• an offer of a substantial cash donation, or a donor refusing to use the bank account;
• funds from abroad with no cooperation agreement or approval from the competent authority;
• a partner or intermediary unable to justify the use of funds or provide evidence of distribution;
• projects in high-risk areas with no on-site control and no identified beneficiaries;
• repeated cash withdrawals with no clear link to statutory activities;
• a director or member who manages the funds alone and resists any control;
• a persistent gap between declared resources and the association's spending.

4. Common mistakes

The difficulties we observe in non-profit organisations rarely stem from bad faith; they mostly come from a lack of method.

• Believing AML/CFT only concerns banks: the regime for associations is lighter, but it is real and supervised.
• Accepting cash out of habit during collections, without authorisation or named receipts.
• Not documenting the origin of large donations, particularly those from the diaspora or foreign benefactors.
• Entrusting funds to a single person, with no dual signature or regular bank reconciliation.
• Neglecting oversight of partners who distribute aid on the association's behalf.
• Submitting financial reports late, which weakens the relationship with the supervisory authority and the bank.

These weaknesses matter all the more because a bank, applying its own due diligence obligations, may delay transactions or even end the relationship if the association cannot justify its flows.

5. How Hodemia Consulting supports non-profits

Hodemia Consulting, founded by Fayçal Lounes, who has nearly twenty years of regulatory compliance experience in Europe, the United States and the Middle East, helps associations and foundations build compliant, proportionate fund management:

• Compliance diagnostic (2 to 4 weeks): review of resources, fundraising practices, financial governance and documentation. Discover our approach to the compliance diagnostic.
• AML/CFT programme implementation tailored to the non-profit sector: risk mapping, donation acceptance procedure, partner checks, sanctions list screening.
• Compliance & Ethics training (1 day) for board members, treasurers and volunteers: see our training courses.
• Leadership & Compliance seminar (2 days) for the leaders and boards of foundations and large associations.

To frame your approach, also read our guide to AML/CFT compliance in Algeria, then contact us.

Conclusion: protecting the association's mission

The AML/CFT obligations for non-profits do not make associations obliged entities within the meaning of Article 4, but they place them under real oversight by the ministry in charge of the Interior, with precise prudential rules, including the ban on accepting cash without prior authorisation. After the grey-list exit and ahead of the evaluation expected around 2029, associations that can prove where their funds come from and where they go protect their mission, their donors and their banking relationship. Simple, documented and shared financial governance often covers most of the way.

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.