Alert: FIU Goes Dark in Afghanistan, Increasing AML/CFT Risk

The online disappearance of Afghanistan’s financial intelligence unit (FIU) could limit Afghanistan’s links to the global financial system and to foreign lenders, increasing risks for financial institutions operating in the country. FiveBy’s sources in Afghanistan confirm that the website for the Financial Transactions and Reports Analysis Center of Afghanistan (FinTRACA) has not been active or updated since the Taliban took over the country last month, citing a lack of maintenance that almost certainly is the result of a dearth of funds—especially since the agency is controlled by the Afghanistan central bank and had received assistance from the United States and international partners—as well as derisking and the deteriorating security environment in the country.

FinTRACA shared financial intelligence with the international community, but information about the unit has been removed from its website. Afghanistan’s FIU was established under the Anti Money Laundering and Proceeds of Crime Law passed by decree in 2004 as a semi-independent body to deny illicit actors access to the Afghan financial system and worked closely with law enforcement to investigate and prosecute illicit financial activity, provided analysis to foreign counterparts, and helped develop laws and regulations to support Afghanistan’s AML/CFT regime.

Although it is possible that the lack of maintenance funding has shut down the FIU’s website, the fact that FinTRACA was likely investigating the Taliban for making hundreds of millions of dollars from the illicit drug trade before the insurgent group took over Afghanistan, including the central bank, is also a likely cause for its apparent demise. With a designated terrorist group in charge of the government possibly having shut down the country’s FIU, Afghanistan will almost certainly further disengage from the global financial system, and insight into illicit finance there will become more limited. FinTRACA was also disconnected from the Egmont Group’s international secure server on the day the Taliban took control over Kabul, according to Reuters reporting. The Egmont Group of Financial Intelligence Units is an international organization that facilitates cooperation between national FIUs.

FiveBy warns that financial institutions will need to further increase due diligence efforts and risk assessments when transacting in Afghanistan. One of FinTRACA’s roles was to create a watchlist of individuals assessed to be a high risk to the financial system. Without an operational FIU, the country no longer has a current list that financial institutions could access to help conduct due diligence research.

With the online information from Afghanistan’s FIU unavailable, human-driven research, expertise, and analysis becomes even more critical. FiveBy has the analytic tools and capabilities to provide robust risk assessments and insights into high-risk jurisdictions such as Afghanistan and inform decisions about potential customers and business partners.

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