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
-
Could There Be a Way to Make Economic Sanctions More Mission Oriented?
Podcast
One of the main tools foreign policy leaders have to exert pressure on other governments is through the use of economic tools. Sanctions, export controls, investment restricti...
By Lt Col Mary Hossier
-
Boosting Economic Security Collaboration Among G7 Economies and like-Minded Allies
Commentary
Emily Kilcrease, senior fellow and director of the CNAS energy, economics, and security program, and Geoff Gertz, senior fellow, participated in the T7, the official engagemen...
By Emily Kilcrease & Geoffrey Gertz
-
Ducking Climate Science Is a Danger to the U.S. Military. Congress Must Help.
Commentary
This article was originally published in Breaking Defense. The Trump Administration’s recent decision to revoke the EPA “endangerment finding” is emblematic of a trend in Amer...
By Will Rogers
-
CNAS Insights | Trump's Plan B for Tariffs
Commentary
The administration is already pivoting to a new tariff architecture that will mostly, though not entirely, recreate his previous tariffs....
By Geoffrey Gertz
