Afghanistan’s Law Enforcement Efforts Fall Short in Curbing Financial Crimes
Struggling to Combat Financial Crimes
Kabul, Afghanistan - Despite significant strides made by the Afghan government to establish law enforcement agencies tasked with combating financial crimes, including money laundering and terrorist financing, the country continues to struggle with effectively curbing these illicit activities.
Lack of Resources and Expertise Hinders Efforts
A recent assessment revealed that the lack of adequate resources, expertise, and coordination among relevant agencies has hindered efforts to expose and disrupt financial crimes. Specialized agencies have been created without clear definitions in law, leading to confusion and inefficiencies.
Limited Progress on Investigations and Prosecutions
The report highlights that while investigations have been launched into money laundering and terrorist financing cases, none have resulted in prosecutions or convictions. The Afghan government’s continuous efforts to build the capacity of law enforcement agencies, with support from foreign donors, have not yielded the desired results.
Challenges in Implementing AML/CFT Measures
In the financial sector, while all institutions are required to implement anti-money laundering and combating the financing of terrorism (AML/CFT) measures, these requirements need to be strengthened significantly. The lack of adequate customer due diligence, record-keeping measures, and enhanced due diligence for higher-risk customers and transactions has been identified as a major concern.
Correspondent Relationships and Wire Transfer Rules
Correspondent relationships between financial institutions are also not sufficiently regulated, with no requirements beyond basic customer due diligence to gather information on the respondent institution. Wire transfer rules lack clarity, particularly with respect to domestic transfers.
Internal Policies and Procedures Lacking
Few financial institutions have filed suspicious transaction reports (STRs), and those that have done so have primarily been banks reporting suspicions of money laundering. Internal policies and procedures for preventing money laundering are lacking, with no guidance provided on what should be covered.
Market Entry Conditions and AML/CFT Supervision Fall Short
Market entry conditions and AML/CFT supervision also fall short of international standards, due in part to a lack of resources and expertise.
Urgent Attention Needed
The assessment team identified several areas that require urgent attention from the Afghan government and relevant agencies to improve the country’s ability to combat financial crimes effectively. These include:
- Increasing resources and expertise for law enforcement agencies
- Strengthening AML/CFT regulations and supervision
- Improving market entry conditions for financial institutions
Conclusion
In conclusion, while Afghanistan has made significant efforts to establish law enforcement agencies tasked with combating financial crimes, the country still faces significant challenges in effectively curbing these illicit activities. It is essential that the government and relevant agencies take immediate action to address these shortcomings and improve the country’s ability to combat financial crimes effectively.