Financial Crime World

Afghanistan’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Face Uncertainty Amid Political Turmoil

Background

In 2016, Afghanistan was listed as a high-risk third country by the European Commission for anti-money laundering and counter-terrorist financing (AML/CFT). This designation sparked concerns about the country’s ability to combat financial crimes.

EU Global Facility Assistance

Prior to the establishment of a Taliban-led government in August 2021, the EU Global Facility on AML/CFT had been providing technical assistance to Afghanistan since January 2021. The facility had made significant progress in delivering online training programs to local authorities, covering topics such as:

  • Law enforcement
  • Trade-based money laundering
  • FATF Recommendation 2
  • Financial evidence into intelligence
  • Multi-agency custodial financial investigations

Suspension of Activities

However, due to the political situation in Afghanistan, all activities by the EU Global Facility have been suspended. The European Union has agreed with this decision.

Concerns about AML/CFT Implementation

The suspension of activities raises concerns about Afghanistan’s ability to effectively implement AML/CFT regulations and combat financial crimes, including money laundering and terrorist financing.

Impact on Financial Regulatory Framework

The decision by the EU Global Facility comes as a blow to efforts aimed at strengthening Afghanistan’s financial regulatory framework and preventing the misuse of its financial system for illicit activities.

Uncertainty under Taliban-Led Government

With the Taliban-led government now in power, it remains unclear whether Afghanistan will be able to meet international standards on AML/CFT and avoid being listed as a high-risk jurisdiction by the Financial Action Task Force (FATF).

Conclusion

The suspension of EU Global Facility activities has raised concerns about Afghanistan’s ability to combat financial crimes. The country must now navigate its new political reality while also meeting international standards on AML/CFT.