Financial Crime World

Afghanistan’s Law Enforcement Revamp Falters in Fight Against Crime

Kabul, Afghanistan - The recent revamping of law enforcement agencies in Afghanistan aimed to combat crime, including money laundering and terrorist financing. However, a new report reveals that the efforts have fallen short due to inadequate resources, expertise, and coordination.

Ineffective Use of Investigative Tools

  • Specialized agencies created to tackle financial crimes lack clear definitions and powers
  • Poor coordination between law enforcement agencies has resulted in duplicated efforts and wasted resources
  • Investigations into money laundering and terrorist financing cases have not been prosecuted or forwarded to courts

Capacity Building Efforts Yield Limited Results

  • The Afghan government’s continuous efforts to build capacity, with the support of foreign donors, have not yielded significant results
  • Financial institutions are required to implement anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations, but these measures fall short of international standards

Weak Regulatory Frameworks

  • Correspondent relationships between financial institutions are poorly regulated, lacking requirements for gathering information on respondent institutions or verifying their reputation
  • Wire transfer rules lack clarity, particularly with respect to domestic transfers, and the threshold for verifying originator information is too high
  • Few financial institutions have filed suspicious transaction reports (STRs), despite being required to do so

Market Entry Conditions and Supervision Fall Short

  • The central bank’s efforts to regulate financial institutions are hampered by insufficient means to verify natural persons and establish beneficial ownership and control of legal persons
  • Market entry conditions and AML/CFT supervision fall short of international standards due to a lack of resources, expertise, and corruption

Conclusion

The report concludes that Afghanistan continues to struggle in its fight against crime, highlighting the need for sustained efforts to strengthen law enforcement agencies, improve coordination, and enhance regulatory frameworks. The country’s ongoing challenges in combating money laundering and terrorist financing underscore the importance of addressing these issues to ensure a stable and secure financial system.