Tunisia outraged and betrayed at 'back-stabbing' EU terror-funding blacklist

The Tunisian government is taking steps to convince the EU to reconsider its decision to include the North African nation in the list of countries considered to be at high risk of money-laundering and terrorism financing.

On 7 February, the European Parliament blacklisted Tunisia for increased risk of money-laundering and terror funding, leaving officials bewildered in Tunis at a time when the EU is said to support the country's successful democratic transition.

MEPs were split on adding Tunisia on the list, failing to achieve the 376-vote absolute majority needed to reject the inclusion. Those objecting deemed the listing "undeserved" as it failed to recognise the recent steps the country had taken to strengthen its financial system against criminal activity.

EU Justice Commissioner Vera Jourová told MEPs the Commission would reassess the country's progress "as early as possible" this year.

For the second time in a few months, Tunisia was blacklisted. On 5 December, the EU had put Tunisia along with other countries on its tax haven blacklist, although it was removed from the list on 23 January following a wave of official protests and diplomatic efforts.

February's EU vote stemmed from the recommendations of the International Financial Action Task Force (FATF).

The FATF identifies potentially higher-risk countries with strategic anti-money laundering and counter-terrorist financing (AML/CFT) deficiencies, and closely monitors those countries' progress in addressing their weaknesses. On that basis, Tunisia was classified among the countries that pose a risk to the international financial system.

The Tunisian Ministry of Foreign Affairs reportedly described the listing by the European Commission as "unfair and hasty".

Tunisia is not a terror sponsor. This blacklisting is not based on real technical motives, it's a political move.

Discontent at the vote came from Tunisia's ruling coalition as well as the opposition.

"Tunisia is not a terror sponsor. This blacklisting is not based on real technical motives, it's a political move," argued Tunisian MP Hela Omrane, chairperson of the Committee for the Investigation of Youth Sending to Conflict Zones at the Assembly of Representatives of the People.

"How come they did not blacklist Libya? There's something wrong in this."

She alluded to regional turmoil and pressure being put on Tunisia, "the only hopeful story in the Arab Spring", which should be supported internationally, rather than discredited, along its path to democracy.

In an interview with Sputnik, MEP Marie-Christine Vergiat expressed surprise at the decision to blacklist Tunisia, stating that among the five countries from the Middle East and Africa that were blacklisted in December, neither Libya nor any Gulf state were mentioned.

The EU's move to insert Tunisia on this list was very hard and rushed. It's not about blacklisting but monitoring and making sure some gaps are fixed

"The EU's move to insert Tunisia on this list was very hard and rushed. It's not about blacklisting but monitoring and making sure some gaps are fixed," said MP Mohamed Fadhel Ben Omrane, a lawyer specialised in tax law and a member of the Committee of Finances at the Assembly of Representatives of the People.

He said the FATF determined Tunisia posed a risk with regards to funds transfers, and the task force considers that the country must implement the necessary reforms at the technical level.

In a statement published on 23 February, the FATF reviewed Tunisia's compliance with AML/CFT standards. It stated that, since November 2017, Tunisia had taken steps towards improving its AML/CFT regime, however it is required to continue to work to address its deficiencies. Measures set out in its action plan include: implementing risk-based AML/CFT supervision of the financial sector; maintaining comprehensive and updated commercial registries; increasing the efficiency of suspicious transaction report processing; establishing a fully functional terrorism-related targeted financial sanctions regime; suitably monitoring the association sector.

The FATF welcomed Tunisia's political commitment to address the identified technical deficiencies.

"I fail to understand the EU vote, since we have the appropriate legal framework and functioning monitoring mechanisms in place to fight money-laundering and terror funding," MP Ben Omrane noted.

In August 2015, the Tunisian parliament passed Law 26 of 2015 on combating terrorism and money laundering following several terrorist attacks against foreigners and law enforcement officials that took place in the same year, namely the two attacks at the Bardo museum in Tunis and on a beach in Sousse.

The law created a National Commission for the fight against terrorism, "responsible for monitoring and evaluating the implementation of the decisions of the relevant UN structures in the framework of international commitments of Tunisia" under section 68 of the Terrorism Act.

More work needs to be done to ensure judges suitably issue their rulings against individuals who are implicated in making bank transactions that are found related to terror financing

A special commission was established within the Central Bank of Tunisia, the Tunisian Financial Analysis Committee (TFAC) that is in charge of receiving and analysing suspicious transactions reports and disseminating them, in case the suspicion is confirmed, to judicial authorities. The TFAC cooperates particularly with the reporting entities and the law enforcement agencies (central bank, police, customs).

Ben Omrane said the Tunisian banking system was equipped to track capital of a suspicious nature or source; local and European banks cooperate by sharing and cross-checking related information, and the TFAC works efficiently in preparing and transmitting the reports to the judge specialised in terrorism cases.

Rather, the shortfall, he continued, lies with the judiciary that lacks the budget and resources needed to better tackle the problem. More work needs to be done to ensure the designated judges carefully study the documents received case-by-case, suitably issue their rulings against individuals who are implicated in making bank transactions that are found related to terror financing.

Hela Omrane, meanwhile, admitted that while the anti-terrorism legislation was well suited to fighting terror financing, there was a failure in its proper implementation and effective judicial control.

The use of suspicious funds by a number of charitable associations that were established during and after the 2011 revolution, primarily funded by Gulf countries with sums ranging between 100,000 and three billion dinars is another aspect which requires investigation, she added.

Several dozen such organisations were later dissolved or frozen on charges of financial irregularities or receiving foreign funds to support terrorism, despite little to no substantive evidence proving terrorism-related activity.

[The problem] for us is not reinforced vigilance itself, rather the 'blacklist' labelling, it harms the country's image, it can scare off the investor

Results of a study covering the period 2013-2014 conducted by the TFAC in 2015 showed that a number of associations remained vulnerable to suspicious activity in terms of money-laundering or terrorism funding.

"We at the Committee for the Investigation of Youth Sending to Conflict Zones met with representatives of the Central Bank, and asked to be supplied with the list of the concerned organisations in order to trace their identity and origin," Ms Omrane said. "We are awaiting a response."

In light of the Tunisian government's efforts in terms of its national and international commitments and with the FATF, state officials hope that Tunisia will soon be removed from the list.

The governor of Tunisia's central bank, Chadli Ayari, announced his resignation hours before a vote on his dismissal on 15 February, a week after the European Parliament blacklisted the North African country. He faced media allegations of turning a blind eye to "obscure transfers" from NGOs and political parties. The next day, World Bank official Marouane Al Abbasi was appointed as his successor.

A few days after the EU announcement of its classification, some Central Bank officials were arrested on accusations of belonging to a network that exchanged amounts in small banknotes with large notes to facilitate smuggling and money-laundering operations.

I'm very surprised that the EU, which is our main strategic partner, says it wants to help Tunisia though its democratisation process whilst it stabbed us in the back with this grave decision

The Assembly of the Representatives of the People decided on 22 February to summon Prime Minister Youssef Chahed to parliament for interrogation on the country's situation -scheduled to take place between 7 and 15 March - namely the recent EU classifications and the measures to remove Tunisia's name from the list as soon as possible.

"We are handling this small crisis and working on it," Lotfi Hachicha, TFAC's Secretary General, said to Tunisian web magazine Inkifada. "[The problem] for us is not reinforced vigilance itself, rather the 'blacklist' labelling, it harms the country's image, it can scare off the investor."

Classifying Tunisia as the country most prone to money-laundering and terrorism financing risks affecting several economic sectors, notably the tourism industry, undermining foreign investments, having negative  repercussions on Tunisia's relations with the EU and on its reputation abroad.

"We consider the European action abusive on all levels, irresponsible vis-à-vis this country's reality, this democracy and the privileged relations between the EU and Tunisia," Hachicha also told Inkifada.

MP Ben Omrane, the lawyer, added: "I'm very surprised that the EU, which is our main strategic partner, says it wants to help Tunisia though its democratisation process whilst it stabbed us in the back with this grave decision."

The tax lawyer mentioned that the government was now compiling a report with trade registries for every company based in Tunisia containing updated information in line with FATF standards.

Hela Omrane pointed out that Tunisia had "very good" relations with the EU, "and we are taking necessary measures to address this issue - it is in the interest of our European neighbours to cooperate with us, especially at this time with Tunisia being the only relative success in the Arab region." 

Alessandra Bajec is a freelance journalist currently based in Tunis.

Follow her on Twitter: @AlessandraBajec