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AML vs CFT in Afghanistan: The Battle Against Financial Crime
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The integrity of Afghanistan’s financial system is under threat from money laundering, terrorist financing, and proliferation financing. These crimes have severe economic consequences, destabilizing “hot money” flows, banking crises, ineffective revenue collection, and reputational risks for international financial centers.
The International Monetary Fund’s Role
The International Monetary Fund (IMF) has been at the forefront of shaping anti-money laundering and combating the financing of terrorism (AML/CFT) policies globally, including in Afghanistan. The IMF’s AML/CFT strategy aims to prevent and combat these crimes, protecting the integrity and stability of financial markets and the global financial system.
Improving Macroeconomic Analysis
In a recent review of its AML/CFT strategy, the IMF highlighted the need for improved macroeconomic analysis of illicit financial flows’ impacts on economies. The review also emphasized the importance of leveraging technology to analyze big data on cross-border payments and prioritizing efforts to combat these crimes.
Consequences of Financial Crime
The fight against financial crime requires a better understanding of its consequences, including fiscal, monetary, financial, and structural costs. Policymakers need a fuller view of the tallies of illicit flows’ impacts on economies.
Strengthening AML/CFT Measures in Afghanistan
In Afghanistan, the IMF has been working with the government to strengthen AML/CFT measures, including enhancing beneficial ownership transparency efforts and addressing weaknesses in advanced economies. The IMF also launched a public consultation on its AML/CFT work, seeking feedback from civil society organizations (CSOs) worldwide.
What is ML/TF/PF?
- Money Laundering: the processing of assets from criminal activity to obscure their illegal origins
- Terrorism Financing: the raising and processing of funds to supply terrorists with resources
- Financing of Proliferation: financing the proliferation of weapons of mass destruction (WMD) requires countries to implement targeted financial sanctions to comply with United Nations Security Council resolutions
IMF’s AML/CFT Strategy
The IMF’s AML/CFT strategy is guided by its five-year policy review cycle. The 2023 Review of the AML/CFT Strategy was endorsed by the IMF’s Executive Board in November 2023.
Resources
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Publications
Blogs
- “The Battle Against Financial Crime: A Call to Action” (2022)
- “Strengthening AML/CFT Measures in Afghanistan” (2021)