Afghanistan’s Law Enforcement Efforts Under Scrutiny as Crime Remains Rampant

Kabul, Afghanistan: Struggling with Rampant Crime

Despite efforts to revamp law enforcement in Afghanistan, the country continues to struggle with rampant crime, including money laundering and terrorist financing. A recent assessment has highlighted significant shortcomings in the agencies responsible for curbing these crimes.

Shortcomings in Law Enforcement Agencies

• Lack of adequate resources, expertise, and coordination between agencies
• Specialized agencies have been created, but their establishment and powers are not clearly defined in law
• Investigative powers are not being used to their full extent

Investigations into Money Laundering and Terrorist Financing Cases

• Investigations have been conducted, but none has resulted in prosecution or conviction
• Afghan government and foreign donors have made significant efforts to build the capacity of law enforcement agencies, but the country remains unable to effectively expose and disrupt financial crimes

Challenges in Implementing Declaration System for Cross-Border Transportation of Currency and Bearer Instruments

• Limited implementation at Kabul International Airport (KIA)
• Implementation elsewhere along Afghanistan’s porous border is particularly challenging due to the proliferation of government agencies at the airport

Weak AML/CFT Preventive Measures Imposed on All Financial Institutions

• Lack of clarity around domestic wire transfers
• Most financial institutions have failed to report suspicious transactions as required by law
• Correspondent relationships are not sufficiently regulated

Areas for Improvement

• Requirement for financial institutions to develop internal policies and procedures to prevent money laundering, but providing no guidance on what should be covered
• Market entry conditions and AML/CFT supervision fall short of international standards
• General lack of resources and expertise contributing to the ineffective implementation of the existing framework

Supervision of Financial Institutions

• Central bank, Da Afghanistan Bank (DAB), is responsible for supervising banks, microfinance institutions, and foreign exchange dealers
• Ministry of Finance regulates and supervises the insurance sector

Assessment Conclusion

• Significant efforts have been made to bring money service providers under government monitoring, but many continue to operate outside the legal framework, particularly in provinces such as Kandahar, Helmand, and Herat.