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AMPING OF LAW ENFORCEMENT IN AFGHANISTAN FALLS SHORT
Kabal, Afghanistan - Efforts to Combat Financial Crimes Yield Little Progress
The Afghan government’s efforts to combat money laundering and terrorist financing through law enforcement agencies have yielded little progress, despite significant investments from foreign donors. According to a recent report, the lack of adequate resources, expertise, and coordination among relevant agencies has hindered the effectiveness of these efforts.
Duplication of Efforts and Squandering of Scarce Resources
The report highlights that specialized agencies have been created without clear definitions of their powers and responsibilities, leading to duplication of efforts and squandering of scarce resources. Investigations into money laundering and terrorist financing cases have been conducted, but none have resulted in prosecutions or convictions.
Corruption and Limited Resources: Major Hurdles
Corruption and limited resources are also major hurdles in the country’s fight against financial crimes. The report notes that:
- The lack of focus on the money trail is a significant obstacle.
- There is a lack of clarity on the level of evidence required to initiate investigations and secure convictions.
Declaration System at Kabul International Airport
The declaration system for cross-border transportation of currency and bearer instruments, implemented at Kabul International Airport, is only partially effective due to the proliferation of government agencies present at the airport. The implementation of this regime at other border crossings remains challenging.
Criticisms of Financial Institutions
The report also criticizes:
- Lack of regulations on correspondent relationships between financial institutions.
- Inadequate customer due diligence requirements.
- Limited reporting of suspicious transactions.
Transparency and Suspicious Transaction Reports
The Financial Transactions Reporting Centre (FinTRACA) has received few suspicious transaction reports from financial institutions, despite being required to file such reports. The report notes that this lack of transparency hinders the country’s ability to combat financial crimes effectively.
Market Entry Conditions and AML/CFT Supervision
Market entry conditions and AML/CFT supervision fall short of international standards, with a general lack of resources and expertise contributing to the ineffective implementation of existing frameworks.
Conclusion: Significant Reforms Needed
The report concludes that significant reforms are needed to strengthen the country’s fight against money laundering and terrorist financing. Until these reforms are implemented, Afghanistan will continue to struggle to effectively combat financial crimes and expose those involved in such activities.