At its June plenary in Paris, the Financial Action Task Force (FATF) removed Algeria from its grey list, less than twenty months after the country was added in October 2024. Considering that Morocco’s delisting in 2023 took two years and the United Arab Emirates in 2024 nearly as long, Algiers’ completion of FATF’s action plan is notable. It demonstrates that Algiers can deliver on reform when the benchmarks are concrete, technical, and tied to real economic costs. Algeria is not unmovable, and Washington should take notice as it could signal broader opportunities to develop the bilateral relationship.
FATF is the intergovernmental body that sets global standards for anti-money laundering and combating the financing of terrorism (AML/CFT). Countries with strategic deficiencies that commit to fixes are placed under increased monitoring, commonly called the grey list. Being grey listed is not a sanctions designation but functions as a risk signal to international markets. Banks tighten due diligence and, in some cases, may choose to end correspondent relationships altogether. A 2021 International Monetary Fund study found that capital inflows decline on average by 7.6 percent of gross domestic product when a country is grey listed.
The push to exit the grey list
Algeria was grey listed for a second time in October 2024. Its first stint on the grey list ended in 2016 after a five-year effort to complete the action plan. Being put back on the grey list came after its 2023 mutual evaluation found weak supervision and limited enforcement across much of the financial system, with gaps in risk-based supervision, beneficial ownership transparency, suspicious transaction reporting, targeted financial sanctions for terrorism financing, and oversight of non-profit organizations.
Algeria made a high-level political commitment to close those gaps with FATF and its regional body, MENAFATF. By February 2026, FATF determined that Algeria had substantially completed its action plan, and the task force’s on-site verification visit to Algiers in April cleared the way for removal at the June plenary. Announcing the decision, FATF president Elisa de Anda Madrazo said the body had removed Algeria “after Algeria made strides in risk-based supervision, beneficial ownership and targeted financial sanctions.” Those were the same weaknesses FATF had identified two years earlier.
Reforms to the integrity of Algeria’s financial systems included cash restrictions, statutory overhaul, and supervisory enforcement. Algeria’s 2025 Finance Act banned cash payments for real estate transactions, luxury goods, and insurance premiums, addressing the informal channels that had made supervision challenging. By adopting Law 25-10, parliament overhauled the 2005 anti-money-laundering framework. Built on the Bank of Algeria’s Regulation 24-03, a public beneficial-ownership registry went live at the National Commercial Registry Center, the financial intelligence unit (CTRF) saw its powers and resources strengthened, and the central bank codified unified know-your-customer rules through Instruction 04-2025.
Why Algiers moved
Since the start of Russia’s war in Ukraine in 2022, Algeria has pursued a strategy of converting energy and trade into partnerships with European capitals such as Rome and Berlin. When the European Commission mirrored the FATF listing in June 2025, European banks handling Algerian transactions faced enhanced due diligence. That added friction to the financial ties Algiers had been working to build, and the costs were immediate.
The political incentive was just as strong. Unlike vague calls for governance reform, FATF handed Algeria a defined set of technical deliverables. At a time when economic credibility carries real weight in the region, Algiers treated the designation as a question of standing and gave the effort high-level ownership.
The FATF case should complicate Washington’s default view of Algeria as opaque, slow, and immovable. External perceptions of Algeria as opaque and unpredictable can deter investment as much as the underlying frictions do. A technical body of peer assessors confirmed, after an on-site inspection, that the reforms are real and have begun to work. That judgment came from outside Algeria. For a state that often sees itself as under-recognized, outside certification carries weight.
Recommendations for Washington
While not every issue in its relationship with Algiers can be addressed in a similar fashion, Washington is well positioned to leverage Algeria’s recent financial integrity achievement in its own bilateral engagements with the country. Here are three opportunities to prioritize.
Revive the Strategic Dialogue: The US-Algeria Strategic Dialogue has not convened since October 2023, a lapse that Washington can correct. Organizing a seventh round of the dialogue with a focus on economic cooperation would be a way to recognize Algeria’s delisting and attach it to something concrete.
Build a standing partnership to counter illicit finance: Washington should work with Algiers to develop structured cooperation with CTRF on countering money laundering and terrorist financing in North Africa and the Sahel. Given the growing terrorist threat coming from the Sahel, Algeria’s financial intelligence unit could be a valuable partner with reach and visibility on illicit financing across Algeria’s southern borders.
Apply the benchmark model: Washington’s engagement with Algiers often stalls when it is tied to broad political demands. As the exit from FATF’s grey list demonstrates, an alternative approach could be to set specific, measurable benchmarks, judged against an external standard rather than by Washington itself, with costs and benefits defined. A benchmark model will not fit every file. But where a credible external standard already exists to measure progress, precise deliverables with deadlines are likelier to move Algiers than the open-ended political demands.
A milestone, not a finish line
Algeria’s delisting certifies that implementation has begun. The delisting does not prove that Algeria’s enforcement culture has changed, and caution remains warranted. But Washington should use the moment. The delisting is an opening to rebuild the relationship around economic cooperation and shared standards on financial integrity. Algiers is not unmovable. The question is whether Washington can define asks precise enough, and valuable enough, to make movement worth Algeria’s effort.
Frank Talbot is a nonresident senior fellow with the North Africa Program at the Atlantic Council’s Rafik Hariri Center & Middle East Programs. Previously, he served in the Department of State supporting stabilization initiatives in the Middle East and North Africa.
Further reading
Tue, Mar 31, 2026
Can France and Algeria get their relationship back on track?
MENASource By Karim Mezran
There are signs of a thaw between Algeria and France; however, there appears to be no real political strategy for redefining the relationship.
Thu, May 15, 2025
African governments should rethink their approach to combating money laundering and terrorist financing
AfricaSource By Benjamin Mossberg
African countries can bolster financial inclusion and tap economic growth opportunities—while preventing the abuse of the global financial system by nefarious actors.
Tue, Aug 19, 2025
Boulos’s North Africa trip reinforces US ‘deals, not aid’ strategy
MENASource By Alissa Pavia
The US senior advisor for Africa's visit to the region showcases that Washington still considers North Africa to be central to its foreign policy.
Image: A general view of the port of Algiers in Algiers, Algeria, on June 15, 2026. (Photo by Billel Bensalem/APP/NurPhoto)