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Afghanistan Makes Significant Progress in AML/CFT Compliance, Dropped from FATF Monitoring

Kabul - In a major breakthrough, Afghanistan has successfully implemented measures to improve its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime, earning it a reprieve from the Financial Action Task Force’s (FATF) monitoring process.

Progress Made

According to recent updates from the FATF, Afghanistan has made significant progress in addressing its strategic AML/CFT deficiencies since making a high-level political commitment in June 2012. The country has established a legal and regulatory framework to meet its commitments under its action plan, which was designed to address the issues identified by the FATF.

Key Milestones

  • Introduced mechanisms for policy and operational level coordination on AML/CFT
  • Criminalized money laundering and terrorist financing adequately
  • Established provisions for freezing and asset confiscation
  • Developed a targeted financial sanctions framework
  • Improved the legal status and resources of its Financial Intelligence Unit (FIU)
  • Established a cross-border currency declaration system

Challenges Remaining

While Afghanistan still faces some challenges in implementing its AML/CFT regime, particularly with regards to fully implementing cross-border regulations at official land border crossing points, the FATF has acknowledged the significant progress made by the country. The organization will continue to work with Afghanistan through the Asia-Pacific Group (APG) to address any remaining issues.

Impact on Financial Sector

The development is seen as a major boost for Afghanistan’s financial sector, which has been grappling with AML/CFT challenges for several years. Experts believe that the improved compliance framework will help attract foreign investment and enhance the country’s economic stability.

Additional Progress Needed

While Afghanistan has made significant progress in implementing its action plan, the FATF still requires additional information regarding the implementation of its legal framework for identifying, tracing, and freezing terrorist assets. The organization is encouraging Afghanistan to continue working towards addressing all remaining AML/CFT deficiencies.

Future Steps

  • Continue to implement effective controls for cross-border cash transactions
  • Establish an adequate supervisory and oversight programme for all financial sectors

With continued support from the international community, experts believe that Afghanistan can fully address its AML/CFT challenges and strengthen its position as a responsible member of the global financial system.

Source: Financial Action Task Force (FATF)