KYC + AML Regulations in North Africa: Region-Wise Laws, Solution, and More

Keeping up with KYC and AML rules across North Africa isn’t exactly simple. 

Morocco does things differently than Egypt, and Tunisia has its own approach too. To pinpoint: the rules tend to change pretty regularly across these countries, which makes things tricky. 

Each place has different verification requirements, document needs, and reporting expectations. But if you’re doing business there, you need to understand the basics no matter what. 

So, this guide is our attempt to help you get rid of this spaghetti. However, it won’t be exhaustive (because honestly, that would take a book), but we’ve tried to break down the essentials for Morocco, Tunisia, Egypt, Algeria, and Libya in a way that makes practical sense.

That said, here’s what you should know if you’re trying to stay compliant while maintaining your sanity.

Why KYC and AML Compliance in North Africa Matters

To put it in a line: For businesses in North Africa, adhering to KYC and AML regulations is about safeguarding your operations and making sure you’re not inadvertently part of illegal activities. Let’s forget legal penalties and reputational damage for a minute. 

There are still two factors left that reflect the need for strong KYC and AML compliance across North African countries.

1. To Maintain Access to Global Markets: North African countries like Algeria, which remains on the FATF grey list, and Tunisia (which was delisted in 2020), must meet global financial standards. Non-compliance can restrict access to global financial networks, limiting market opportunities and international business partnerships, as seen with Morocco’s time on the grey list.
2. To Prevent Involvement in Financial Crimes: Countries like Tunisia and Morocco have improved and removed their grey list status, but the region’s regulatory environment is still changing. Businesses that prioritize KYC/AML compliance stay ahead of regulatory changes, like Algeria’s ongoing grey list status, which signals the need for continual regulatory adaptation.

Just to remind you again, we aren’t even touching penalties and reputational damage.

With the stakes this high, it’s time to move on to how you can build a framework that fits this region’s unique needs and keeps you ahead of the curve. 

But first, let’s go through some key regulators and laws by regions.

North Africa KYC/AML – Key Regulators and Laws by Country

In North Africa, each country has developed its own regulatory framework for combating money laundering and ensuring KYC compliance.

 The following table outlines the key regulatory bodies and laws in Algeria, Egypt, Tunisia, and Morocco, which businesses must adhere to in order to maintain compliance with local and international standards.

1. Algeria 

Key Regulators: Bank of Algeria (Banque d’Algérie) and Financial Intelligence Processing Unit (CTRF).

Key laws:

• Law No. 05-01 (2005) – Prevention and Fight Against Money Laundering and Terrorist Financing: Algeria’s foundational AML/CFT law, targeting money laundering and terrorist financing through reporting obligations, due diligence rules for financial institutions, and creation of a national financial intelligence unit (CTRF).

2. Egypt

Key Regulators: Central Bank of Egypt (CBE) and Money Laundering Combat Unit (MLCU)

Key Laws:

• Law No. 80 of 2002 – Anti-Money Laundering Law: Egypt’s principal AML law, establishing the Money Laundering Combating Unit (MLCU) and mandating suspicious transaction reporting, KYC, and enhanced due diligence for high-risk sectors.

3. Tunisia

Key Regulators: Tunisian Financial Analysis Committee (CTAF) and Ministry of Finance

Key Laws:

• Organic Law No. 2015-26 (2015) – Fight Against Terrorism and Money Laundering: Tunisia’s key legislation integrating AML and counter-terrorism provisions, requiring banks and DNFBPs to implement risk-based compliance programs and improving FIU authority.
• Organic Law No. 2019-9 (2019) – Amendments to Terrorism and Money Laundering Laws: Updates Tunisia’s 2015 law to meet FATF recommendations, enhances due diligence requirements, expands predicate offences, and reinforces inter-agency coordination on AML/CFT.

4. Morocco

Key Regulators: Moroccan Financial Intelligence Unit (UTRF) and Bank Al-Maghrib (Central Bank of Morocco)

Key Laws:

• Law No. 43-05 (2007) – Anti-Money Laundering and Terrorist Financing: Morocco’s AML/CFT framework that mandates STR filing, sets up the Financial Intelligence Authority (UTRF), and imposes preventive measures on financial institutions and designated non-financial businesses.

5. Libya

Key Regulators: Central Bank of Libya (CBL), Financial Information Unit (FIU), and National Committee for Combating Money Laundering and Terrorist Financing

Key Laws:

• Law No. 2 of 2005 – Combating Money Laundering: Introduced Libya’s core AML regulations, requiring financial entities to conduct due diligence, report suspicious transactions, and operate under the oversight of a designated FIU housed within the CBL.

6. Sudan

Key Regulators: Central Bank of Sudan (CBOS), Sudan Financial Intelligence Unit (NFIU), and National Committee for Combating Money Laundering and Terrorism Financing

Key Laws:

• Anti-Money Laundering and Terrorism Financing Act 2010: The main legal framework covering AML/CFT in Sudan, this act formalized the NFIU and outlines requirements for customer verification, transaction monitoring, and reporting.
• CBOS Circular No. 8/2014: A detailed directive for financial institutions, laying out compliance expectations, including KYC procedures and internal controls in accordance with FATF standards.

Now, finally, let’s see the KYC/AML framework you can build to maintain compliance across North African regions. 

How to Build a KYC/AML Framework in North Africa That Works Regionally

In North Africa, businesses need a KYC/AML framework that not only meets global standards but is also tailored to the unique regulatory, cultural, and operational requirements of each country. 

Below are some ways to structure a framework that can work across the region:

1. Build Modular Onboarding Flows by Country

Create customized onboarding flows for each country (e.g., Egypt, Algeria, Tunisia) based on local regulatory requirements and the specific documentation required (e.g., national IDs, driver’s licenses, passports). Ensure flexibility to accommodate differences in document formats and language preferences (Arabic, French) for smoother, region-specific onboarding.

2. Train Compliance Teams on Local Documentation Norms

Document verification can vary significantly across North Africa, especially with Arabic-script documents or documents using different number systems. Train your compliance teams on country-specific documentation to ensure they can accurately identify authentic documents. 

For instance, Egyptian national IDs have different features from Algerian ones, so in-depth training is essential.

3. Partner with Local Firms for Validation and Real-Time Data

Build partnerships with local validation firms or regional data providers to leverage real-time access to databases like sanctions lists, PEP databases, and local registries. This ensures that your KYC processes are up-to-date and can be applied quickly across different regions, particularly with fast-moving regulations.

4. Automate Watchlist Screening in Local Languages (Arabic/French)

Implement automated watchlist screening that integrates with local and global sanction lists in Arabic and French. North Africa’s regulatory bodies often publish their lists in Arabic and French, so ensuring your tools are capable of screening in both languages is crucial for effective compliance and quick identification of red flags.

5. Choose Tools with Dynamic Risk Scoring and Rule-Based Escalation

Adopt KYC/AML tools that allow for dynamic risk scoring based on local risk factors (e.g., exposure to corruption and terrorism financing risks). Rule-based escalation ensures that high-risk clients from countries like Algeria or Tunisia are flagged for deeper due diligence automatically, without relying solely on manual reviews.

6. Ensure Cross-Border Data Compliance and Integration

Given the push for digital identities (e.g., Tunisia’s E-Houwiya), ensure that your KYC framework can cross-check digital identity data seamlessly between countries while respecting local data protection laws. For instance, Tunisia’s data protection laws are more stringent, so your system should be compliant with both local privacy regulations and global standards (GDPR).

AML Red Flags and Monitoring Practices Practices (CAN BE INFOGRAPHIC?)

🚩 Large transactions from new or low-risk accounts without a clear purpose.

🚩 High volume of cross-border transfers to or from high-risk jurisdictions.

🚩 Transfers to or from shell companies or entities with no legitimate business activity.

🚩 Source of funds inconsistent with the customer’s occupation or business.

🚩 Unwillingness to provide complete information or vague answers about transactions.

🚩 Frequent, rapid movement of funds between multiple accounts with no clear reason.

🚩 Transactions in high-risk or less common currencies, especially without justification.

🚩 Breaking large transactions into smaller amounts to avoid reporting thresholds.

🚩 Use of multiple accounts by a single individual, especially across different locations.

🚩 Transactions involving Politically Exposed Persons (PEPs) or their associates.

Compliance Technology That Can Help

Keeping up with KYC and AML compliance across North Africa can be a real challenge, especially with different regulations in each country. But using the right tech can make life a lot easier. 

With automated tools for identity verification and transaction monitoring, businesses can stay on top of compliance without all the manual work and without worrying about missing something important.

Signzy’s API suites are a simple solution that can make a big difference. By plugging them into your existing systems, you can automate screening, track transactions, and assess risk in real-time. It’s a way to stay compliant without stressing over every update or change in regulations, and it helps keep things running smoothly without all the added complexity.

To know more about how Signzy can help, book your demo now.