Enforcement Actions Against Banks in Afghanistan Raise Concerns Over Taliban Control and Money Laundering
A recent assessment by the US-funded review has revealed that Afghanistan’s central bank, Da Afghanistan Bank (DAB), lacks independence from the Taliban regime and has significant deficiencies in anti-money laundering and countering terrorism financing measures. The findings come amid a standoff over the frozen cash held by international financial institutions since the Taliban takeover.
Lack of Autonomy and Political Influence
According to the report by the US Special Inspector General for Afghanistan Reconstruction (SIGAR), the DAB’s management is riddled with flaws, including its lack of autonomy from the Taliban administration. The bank is overseen by three Taliban officials who are under US and UN sanctions, sparking concerns about political influence and interference.
Deficiencies in Anti-Money Laundering Safeguards
The assessment, funded by the US Agency for International Development, also highlighted significant deficiencies in anti-money laundering safeguards, which have raised concerns about the potential for terrorism financing. This comes as the Taliban has demanded the return of frozen cash held by international financial institutions, including a $7 billion trust fund held by the Swiss-based bank.
US Treasury’s Position
The US Treasury official has made it clear that Washington will not support the return of these assets until the DAB demonstrates its independence from political influence and interference, as well as adequate controls against money laundering and terrorism financing. The official noted that half of the frozen cash is being held in a trust fund in Switzerland, while the remainder is being sought through lawsuits brought by families of victims of the 9/11 attacks.
Key Points
- Da Afghanistan Bank (DAB) lacks independence from the Taliban regime
- DAB’s management is overseen by three Taliban officials under US and UN sanctions
- Significant deficiencies in anti-money laundering safeguards have raised concerns about terrorism financing
- The US will not support the return of frozen cash until DAB demonstrates independence and adequate controls against money laundering and terrorism financing