This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Query
Please provide a literature review of illicit financial flows in North Africa over the last five years, covering Algeria, Egypt, Libya, Morocco and Tunisia.
Summary
Illicit financial flows from corruption and illegal markets drain public resources across North Africa. Embezzlement, undervalued sale of state assets and front-company schemes commonly appear in Algeria, Egypt, Morocco and Tunisia, while the diversion and cross-border smuggling of subsidised fuel feature in Libya’s conflict economy. Case evidence shows that proceeds move through proxies and offshore vehicles and are held in companies, accounts and real estate, including in the EU, Switzerland, the UK and the UAE.
Legal frameworks largely meet international standards, but implementation lags. Corruption rarely features in suspicious transaction reports; estate agents and lawyers seldom report suspicious activity; prosecutions are often selective; and asset recovery from abroad has been slow. Crypto-assets appear to be an emerging risk.
Main points
- North Africa recorded the highest financial crimes score of any African region in the 2025 Africa Organised Crime Index (7.83 out of 10), and its average criminality score rose from 4.73 in 2019 to 5.29 in 2025. The region now also scores highest in Africa for human smuggling and the cannabis trade.
- Corruption is a source of IFFs, an enabler of other crimes and a facilitator of cross-border transfers. Documented cases involve embezzlement, undervalued sales of state land and resources, inflated contracts, falsified invoices and the undue allocation of state privileges, often through front companies and family proxies.
- Illegal markets generate significant revenue for organised crime groups and complicit officials, part of which crosses borders. An estimated US$20 billion of fuel was diverted in Libya in 2022–2024; Morocco remains a leading source of cannabis resin and a growing cocaine transit point; and gold smuggled from Sudan moves through Egypt and Libya to the UAE.
- Proceeds move through domestic banks and proxies, informal exchange and, in the largest cases, offshore companies and accounts in Europe and the UAE. Real estate at home and abroad is where most illicit wealth is stored. Recovery of assets from abroad has been slow.
- Laws largely meet FATF standards, but implementation lags significantly. Corruption features in only 5% of the suspicious transaction reports linked to a predicate offence in Algeria and in 3% of reports in Egypt.
- Regulation and supervision of non-financial businesses and professionals (DNFBPs) is an important gap. While case evidence demonstrates that real estate and property remains a high-risk asset class for criminals to hide and grow illicit wealth, real estate agents file almost no suspicious transaction reports in the countries for which data are available (Algeria, Egypt and Tunisia).
- Legal professions are a further weak link. Lawyers and notaries file almost no reports, supervision of them is weak or absent, and Morocco has not clarified when professional secrecy exempts lawyers from reporting suspicious transactions. Tunisian lawyers filed no reports in 2024.
- Institutional shortcomings hamper enforcement. Prosecutors control case initiation in Egypt and Tunisia, anti-corruption agencies in Algeria and Egypt cannot freeze assets, and prosecutions have been selective in four of the five countries, where civic space is also repressed or closed.
- Algeria, Morocco and Tunisia have central beneficial ownership registers; Egypt’s register is accessible only to the registrar, and Libya has none. Registers alone are not enough: ownership data must be accurate, up to date and usable by investigators. Restricted access to property data and weak cooperation with destination jurisdictions also hamper investigations.
- The evidence on crypto-assets as a channel for IFFs is thin. Morocco and Egypt rank among Africa‘s larger crypto markets, and Libya hosts illegal bitcoin mining on subsidised electricity, but no documented corruption related laundering case was found. Tunisia’s financial intelligence unit has identified possible crypto payments to foreign illegal betting platforms. The paper treats crypto as an emerging risk to monitor.
- The evidence supports: prioritising action by destination jurisdictions; transparency and supervision of real estate and the legal professions; better use of financial intelligence; usable, verified ownership data; and measures targeting Libyan fuel and regional gold.
Contents
1. Background
2. Defining illicit financial flows
Scope of this paper
Scale of the problem
Regional dynamics
3. Regional overview: main IFF challenges
Main sources of IFFs
Channels and enablers
Cross-cutting institutional weaknesses
Implications for human development
4. Country profiles
Algeria
Egypt
Libya
Morocco
Tunisia
5. Potential region-wide counter-measures
6. Relevant regional bodies and initiatives
7. References
Authors
Vlora Rechica (TI)
Reviewers
Matthew Jenkins (TI), Katherine Wilkins (TI), Manuel Pirino (TI)
Rosa Loureiro-Revilla (U4)
Date
30/10/2026
