The anti-money laundering unit is ineffective, removing Afghanistan’s foreign currency obligations

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The anti-money laundering unit is ineffective, removing Afghanistan's foreign currency obligations

Since 2006, the Financial Transactions and Reports Analysis Center of Afghanistan (FinTRACA) has gathered intelligence on thousands of suspicious transactions and helped convict smugglers and terrorist financiers, according to its website.

Information on FinTRACA’s website indicated the Taliban were among those in its sights, while the staff Reuters spoke to said the group had been a target since its launch.

With the Islamist militant movement back in power, the absence of a functioning financial intelligence unit (FIU) could curtail Afghanistan’s links to the international financial system and to lenders abroad, some experts warned.

They declined to be named because of fear of reprisals owing to the sensitive nature of their work.

Story Highlights

  • LONDON, Sept 15 (Reuters) – A unit in Afghanistan’s central bank leading a 15-year effort to counter illicit funding flows has halted operations, four staff members said, threatening to hasten the country’s slide out of the global financial system.

  • UN officials have said the Taliban, who seized Kabul on Aug. 15, made hundreds of millions of dollars from the drugs trade and other illicit sources when they were fighting government troops. The group has vowed there would be no drug cultivation in Afghanistan from now.

Such units, which scrutinise money flows for potential suspicious activity, are critical for any nation that seeks to participate in the global financial community, said Stuart Jones, Jr., founder and chief executive of risk intelligence firm Sigma Ratings.

He was also U.S. Treasury attache to Afghanistan between 2008 and 2010.

Reconnecting with the financial system could be complicated by existing sanctions against the Taliban and the fact that a senior government minister heads a U.S.-designated terrorist organisation. “Afghanistan was considered high-risk by nearly all global financial institutions pre-Taliban takeover,” said Jones.

“Now, with untested leadership at the central bank, an inoperable financial intelligence unit and current asset freezes on the ruling government by the United Nations and terror designations of key figures by the United States, I would expect foreign financial institutions to tread extremely carefully.” The central bank did not respond to several attempts to reach it via email and telephone.

The Taliban want access to reserves being held abroad as well as aid and other financing, as the economy reels from decades of war, drought, food shortages and the exodus of thousands of professionals. STAFF FLED

One, who is still in Afghanistan, complained that international partners failed to get staff and their dependents out during the mass evacuation from Kabul that ended last month. A Taliban spokesperson did not immediately respond to a request for comment on the status of FinTRACA staff or whether the unit would operate in future.

Three staff members said some of FinTRACA’s 60-odd employees had left Afghanistan or gone underground in recent weeks. The Taliban have said they want professionals to return to work to help revive the economy and vowed there would be no vendetta against old opponents. But many members of the ousted administration have fled the country or remain in hiding.