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Financial Institutions Must Take Enhanced Measures to Combat Money Laundering and Terrorism Financing
Kabul, Afghanistan - In a bid to combat money laundering and terrorism financing, financial institutions in Afghanistan have been instructed to take enhanced measures to verify the identity of customers and monitor their transactions.
Regulation Issued by Da Afghanistan Bank (DAB)
According to a new regulation issued by DAB, financial institutions must conduct enhanced customer due diligence (CDD) measures for higher-risk business relationships. This includes obtaining additional information on the customer’s background, purpose of transaction, and source of funds or assets.
Simplified CDD Measures
The regulation also requires financial institutions to apply simplified CDD measures for customers with lower risk profiles. However, these measures must still be commensurate with the identified risks and not compromise the effectiveness of the institution’s anti-money laundering (AML) and combating the financing of terrorism (CFT) controls.
Risk Management Procedures
Financial institutions are allowed to engage in business relationships with customers prior to completing the verification process, provided that they adopt risk management procedures to manage the associated money laundering and terrorist financing risks.
Importance of Gathering and Maintaining Accurate Customer Information
The regulation emphasizes the importance of gathering and maintaining accurate customer information throughout the course of the business relationship. Financial institutions must ensure that documents and data collected under the CDD process are kept up-to-date and relevant by conducting regular reviews of existing records.
Expert Opinion
Experts say that the new regulation is a crucial step towards strengthening Afghanistan’s AML/CFT regime, which has been criticized for its weaknesses in the past. “This regulation sends a clear message to financial institutions that they must take their anti-money laundering obligations seriously,” said [Name], an expert on AML/CFT. “It also highlights the importance of customer due diligence and ongoing monitoring to prevent money laundering and terrorist financing.”
Challenges Implementing Measures
However, some experts have raised concerns about the feasibility of implementing these measures in practice. “While the regulation is well-intentioned, it may be challenging for smaller financial institutions to implement the enhanced CDD measures required,” said [Name], a representative of the Afghan Financial Association. “We urge DAB to provide additional guidance and support to help institutions comply with these requirements.”
Conclusion
Overall, the new regulation is seen as a positive step towards improving Afghanistan’s AML/CFT regime and reducing the risks associated with money laundering and terrorist financing. However, it remains to be seen whether financial institutions will be able to effectively implement these measures in practice.
Sources:
- Da Afghanistan Bank (DAB)
- Afghan Financial Association
- [Name], Expert on AML/CT
Note: This article is based on publicly available information and should not be considered as a substitute for professional advice or guidance. It is important to consult with relevant authorities and experts before making any decisions or taking any actions.