Afghan Financial Intel Unit Taken Offline by Taliban; What’s Next?

Afghan Financial Intel Unit Taken Offline by Taliban; What’s Next?

 The poorly planned and executed departure of the United States military presence from Afghanistan under the Biden administration has at least in part contributed to the Middle Eastern country’s descent into a state of socioeconomic despair. Now that the Taliban has managed to retake control of Kabul, maintaining regulatory compliance and prevention of terror financing protocols do not appear to be at the top of the radical Islamist militant group’s to-do list. On the contrary, the Taliban seems intent on removing any type of financial oversight that could incriminate them at the international level, with the purge of pre-established government agencies operating in this regard already underway.

            Established in 2006, the Financial Transactions and Reports Analysis Center of Afghanistan (FinTRACA) is a national Financial Intelligence Unit (FIU) responsible for collecting information on thousands of suspicious transactions and financial activities occurring within Afghanistan and across its borders. FinTRACA was created as part of the Anti-Money Laundering and Proceeds of Crime Law passed in 2014 with the intent of better protecting the integrity of the Afghan financial system, as well as to bring the country into compliance with many established international accords. Since its creation, the FIU – which is housed within the Central Bank of Afghanistan – has been successful in bringing a wide variety of criminals and terrorists to justice, while thwarting many smuggling operations and potential terror attacks.2 Recent developments suggest, however, that FinTRACA may no longer be operational thanks to the Taliban.

            The most obvious sign that something is wrong with the unit can be found no further than its the website – one that, like many other international FIU’s, had previously listed the Taliban as a terror group that they were directly targeting. The website is now completely down. Unfortunately, FinTRACA’s internet domain being offline indefinitely is just the tip of the iceberg. Reuters, citing anonymous reports from four of the agency’s staff members, writes that the unit as a whole has completely halted their operations with a large percentage of the roughly 60 previously-employed staff either fleeing the country altogether or going deep into hiding to avoid persecution by the Taliban. The U.S. Treasury Department has remained quiet on the current state of affairs in Afghanistan to date, declining to make comment when asked about whether FinTRACA’s staff could still be found within Afghanistan or not.

            Making matters worse for the embattled Middle Eastern country which was already at risk of being ostracized by the world financial market due to the Taliban takeover is that, now that FinTRACA has gone down, many fear that prominent international watchdog the Financial Action Task Force (FATF) will surely downgrade their status and further cut their access to the international financial market, breeding further economic turmoil for citizens and businesses alike.  “Afghanistan was considered high-risk by nearly all global financial institutions pre-Taliban takeover,” said Stuart Jones, former US Treasury Attaché to Afghanistan from 2008 to 2010. “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.”1

            It is difficult to envision a scenario in which Afghanistan is integrated back into the international market any time in the near future, as the Taliban’s stranglehold on the country remains intact. Financial institutions are already beginning to shun their Afghani counterparts in anticipation of potential sanctions waiting in the wings and for good reason, as the risk of maintaining business relationships with Middle Eastern firms in this current climate is simply not worth the potential reward. With little to no oversight in place to keep the Taliban’s widespread financial misconduct in check, it is also fair to assume that the many illicit financial streams available to the group will continue to flow into and fund their multinational operations via the drug trade and other means. 

Citations

  1. Arnold, Tom. “Anti-Laundering Unit Goes OFF-GRID, Fraying AFGHAN Ties to Global Finance.” Reuters, Thomson Reuters, 15 Sept. 2021. 
  2. “Taliban Refuse to Fight Money Laundering.” Pledge Times, 15 Sept. 2021. 
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