Anti-laundering unit closes, fraying ties to global economy

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.

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.

UN officials have said the Taliban, who seized Kabul last month, 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 on.

Information on FinTRACA’s website indicated the Taliban were among those in its sights, while the staff said the group had been a target since its launch. With the Taliban back in power, the absence of a functioning financial intelligence unit could curtail Afghanistan’s links to the international financial system and to lenders abroad, some experts warned.

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, founder and chief executive of risk intelligence firm Sigma Ratings.

Reconnecting with the financial system could be complicated by existing sanctions against the Taliban and the fact that a senior government minister heads a US-designated terrorist organisation. 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.

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. Three staff members said some of FinTRACA’s 60 employees had left Afghanistan or gone underground in recent weeks.

Last month, the unit logged 25 suspicious transactions reports in its database, taking the total for the year to date to 645, data on its website show.