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
-
Sharper: Trump 2.0
Commentary
Donald Trump's return to the White House is widely expected to reshape America's global priorities. With personnel choices and policy agendas that mark a significant break fro...
By Charles Horn & Gwendolyn Nowaczyk
-
Trump 2.0's Economic Security Agenda
Podcast
Emily and Geoff switch from obsessing over the election to obsessing over the transition. They dig into what a Trump 2.0 presidency will mean for tariffs, sanctions, export co...
By Emily Kilcrease & Geoffrey Gertz
-
Biden’s Gloves Can Finally Come Off to Help Trump End the Ukraine War
Commentary
The Biden administration’s reasons to treat Russian oil with kid gloves, in other words, no longer apply....
By Edward Fishman
-
European Security and Defense under Trump 2.0 with Andrea Kendall-Taylor and Jim Townsend
Podcast
Max and Donatienne are joined by Andrea Kendall-Taylor and Jim Townsend, hosts of the Brussels Sprouts podcast at the Center for a New American Security, to discuss the implic...
By Andrea Kendall-Taylor & Jim Townsend
