September 17, 2021
Reassessing Counter Terrorism Financing in a Taliban-Controlled Afghanistan
The Taliban’s rapid takeover of Afghanistan set back decades-long efforts to integrate Afghanistan into the international community. Nowhere is this more apparent than on anti-money laundering and countering-the-financing-of-terrorism (AML/CFT) reforms, a policy area in which Afghanistan made substantial progress over the past several years to raise compliance standards and crack down on major vulnerabilities in its economy, particularly the under-regulated hawala money transfer system.
Now, the Taliban, a group sanctioned by the United Nations, the United States, and other international partners, oversees Afghanistan’s enforcement of AML/CFT and economic sanctions. The Taliban is unlikely to meaningfully enforce United Nations sanctions against itself or crackdown against the hawala industry in the same way as the previous government. As a former senior Treasury Department official recently noted, “I can’t think of any case in which a terrorist group that’s already designated became the power in charge of a full country.”
The Taliban’s rapid takeover of Afghanistan set back decades-long efforts to integrate Afghanistan into the international community.
Particularly after the Islamic State-Khorasan’s (ISIS-K) tragic and brazen attack at the Kabul airport that killed 13 U.S. military personnel along with over 160 Afghan civilians, the Taliban must be held responsible for allowing terrorist groups to operate in Afghanistan. Addressing AML/CFT risks presents one concrete way for the international community to measure the Taliban’s actions rather than its rhetoric in addressing terrorism and terrorism financing.
Understanding Afghanistan’s post-9/11 economic history allows policymakers to better address the current crisis.
After decades of conflict and the Taliban’s prior five-year rule (1996-2001), Afghanistan’s formal financial system was “virtually non-existent,” according to a 2003 World Bank study. Instead, it relied (and still relies) heavily on hawala, a centuries-old informal money exchange system that provides for both domestic and international transfers. According to The Economist, “regulators around the world hate the system, because of its opacity and its role in helping to fund terrorism.”
Read the full article from Just Security.
More from CNAS
-
What if 'America First' Appears to Work? With Tom Wright
Podcast
Tom Wright joins to talk about his recent article, “What if 'America First' Appears to Work?" about the Trump administration’s “might makes right” approach to foreign policy, ...
By Emily Kilcrease & Geoffrey Gertz
-
Economic Security in North America
Reports
Executive Summary The United States, Mexico, and Canada Agreement (USMCA) negotiated during President Donald Trump’s first term includes a novel review clause. By July 2026, t...
By Emily Kilcrease & Geoffrey Gertz
-
Hearing on the Operation of the Agreement between the United States of America, the United Mexican States, and Canada
Congressional Testimony
Thank you for the opportunity to provide testimony today. My remarks will focus on the role that the U.S.-Mexico-Canada Agreement (USMCA) plays in advancing America’s strategi...
By Emily Kilcrease
-
Video
Indo-Pacific Security / Energy, Economics & Security
North Korea’s Provocations, Power Plays, and Shifting AlliancesTensions on the Korean Peninsula have reached a new and dangerous threshold. President Lee Jae Myung is warning of a real risk of accidental military clashes, as the situation...
By Dr. Go Myong-Hyun
