Algeria Poised to Exit GAFI Grey List After Reforms
Image: Echorouk
Takeaway
Algeria's potential exit from the GAFI grey list signals reduced risk for international investors. Fund managers should re-evaluate Algerian assets, particularly in sectors prioritized by the government for FDI. Successful removal could lead to increased capital inflows and improved access to international financing for Algerian companies.
Algeria has made substantial progress in addressing deficiencies in its anti-money laundering and counter-terrorism financing (AML/CFT) regime, potentially paving the way for its removal from the Financial Action Task Force (GAFI) grey list as early as June 2026. GAFI, the international body that combats these financial crimes, acknowledged Algeria's progress following its plenary session in Mexico from February 11-13, 2026. The organization determined that Algeria has largely fulfilled its action plan, making it eligible for an on-site evaluation to verify the implementation and sustainability of the reforms.
Algeria was added to GAFI's list of jurisdictions under increased monitoring in October 2024. This followed a 2023 Mutual Evaluation Report that identified strategic deficiencies in Algeria's AML/CFT regime. However, Algeria has since demonstrated a commitment to addressing these shortcomings by implementing five key reforms. The country previously underwent a similar process, being placed on the grey list in 2011 and subsequently removed in 2016 after implementing reforms.
In May 2025, GAFI recognized Algeria's progress in resolving technical compliance issues highlighted in the 2023 report, re-rating five recommendations. Recommendation 16, concerning wire transfers, was upgraded from non-compliant to largely compliant. Recommendations 10, 11, and 18, related to customer due diligence, record keeping, and internal controls, respectively, were re-rated from partially compliant to largely compliant. Recommendation 19, regarding higher-risk countries, was re-rated from non-compliant to partially compliant. As of May 2025, Algeria had 20 Recommendations rated Compliant or Largely Compliant.
Algeria's potential removal from the grey list would likely boost investor confidence and improve its international reputation. Remaining on the list could discourage foreign investment, which Algeria desperately needs. Sectors that could benefit include agriculture, renewable energy, and healthcare, where the government is actively encouraging foreign direct investment (FDI). However, investors still face hurdles such as bureaucratic inefficiencies and the 51/49 ownership rule in strategic sectors.
The on-site evaluation by GAFI will be a crucial step in determining Algeria's progress. If the evaluation is positive, Algeria could be formally removed from the grey list at GAFI's next plenary session in June 2026. The outcome of this process will be closely watched by international investors and financial institutions. The plenary is scheduled to be under the Mexican presidency of Elisa de Anda Madrazo.