Tuesday, September 26

Algeria unlocks banking operations with Spain for foreign trade

The Professional Association of Banks and Financial Establishments (ABEF), a key banking body in Algeria, has announced the lifting of restrictions on banking operations for foreign trade with Spain.

“I have the honor to inform you that, after the evaluation of the instruction described in this letter and in consultation with the affected foreign trade agents, the aforementioned precautionary measures are no longer necessary,” explained in a statement published this Thursday the entity, in reference to the suspension of direct debits for goods and services to and from Spain decreed on June 9, 2022.

For its part, the Bank of Algeria has issued another statement in which it clarified that “for the direct debit of foreign trade operations, it is up to the authorized intermediary banks to assess the inherent risks, taking into account in particular the quality of the commercial counterparties, and set the appropriate measures to mitigate these risks”.

The ABEF had ordered the freezing of “bank direct debits related to foreign trade operations of products and services to and from Spain” as of June 9 as a result of the suspension of the Treaty of Friendship, Good Neighborhood and Cooperation.

The measure caused a total blockade of trade between the two countries, with the exception of Algerian gas exports, which were not affected by the entity’s measure.

Spain and Algeria are in an unprecedented diplomatic crisis due to the change in position adopted last March by the Spanish Government on Western Sahara, by supporting the Moroccan proposal for autonomy within Morocco.