Bank of Algeria Imposes Tightened KYC and AML Regime in Major Regulatory Overhaul
By Dr. Hana Saada
The Bank of Algeria has issued a new directive tightening customer due diligence and anti–money laundering and counter-terrorism financing (AML/CFT) obligations across banks, financial institutions, and Algérie Poste, reinforcing a stricter supervisory architecture over the financial sector.
The framework mandates comprehensive identification procedures covering all categories of clients, including permanent and occasional customers, intermediaries, legal representatives, and any party acting on behalf of a client, alongside the compulsory identification of beneficial owners.
Banks are authorised to apply enhanced measures proportionate to risk exposure, with an explicit prohibition on anonymous accounts. Institutions must collect and verify all documentation in the physical presence of clients, who are required to personally sign all contractual and compliance records.
The directive introduces dual-layer oversight extending beyond frontline banking staff to back-office functions, while integrating automated systems designed to assess and flag risk levels in real time, strengthening data integrity and operational traceability.
Customer due diligence requirements include detailed identification of natural persons—covering identity, nationality, source of funds, and expected transaction flows—supported by authenticated original documentation. For legal entities, obligations extend to statutory records, commercial registration, shareholder structures, and mandatory access to beneficial ownership data via the national registry.
Risk profiling is structured around four variables: customer typology, product nature, geographic exposure, and distribution channels, with heightened scrutiny applied to transactions linked to opacity risks or jurisdictions designated as high-risk by the Financial Action Task Force.
Financial institutions are required to refuse or terminate relationships where identification is incomplete, information is withheld, inconsistencies remain unexplained, or clients are listed under national or United Nations sanctions regimes.
The framework also introduces periodic review cycles based on risk classification: annually for high-risk clients, every three years for medium-risk profiles, and every five years for low-risk accounts.
Enhanced safeguards apply to politically exposed persons and their families, prohibiting the establishment of business relations without prior authorisation from competent higher authorities, while subjecting them to continuous monitoring of fund origins.
Institutions are further obliged to immediately investigate any transaction inconsistent with a client’s declared profile and to report suspicious activity without delay, including attempted or aborted transactions deemed irregular.
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