FinTRACA, Afghanistan’s Financial Intelligence Unit, Faces Bleak Future

By Valentina Pasquali

The Taliban’s takeover of Afghanistan last month threatens to unravel the nation’s commitment to curb financial crime and places a trove of transactional data and the individuals who filed it at risk, sources told ACAMS

Other jurisdictions immediately curtailed cooperation after the conquest. On Aug. 15, the day that the U.N.- and U.S.-blacklisted militia seized Kabul, the Egmont Group of 166 national financial intelligence units suspended the Financial Transactions and Reports Analysis Center of Afghanistan, or FinTRACA, from its data-sharing platform, the Egmont Secure Web, or ESW.

The Taliban may nevertheless have FinTRACA’s records, including hundreds of reports of large cash transfers and suspicious transactions that domestic financial institutions filed over the course of more than 10 years, many of which may link back to members of the militia itself.

Last week’s appointments of Mullah Hassan Akhund, who is subject to U.N. sanctions, as acting prime minister and Sirajuddin Haqqani, leader of the Haqqani network, a U.S.-designated Pakistani terrorist group, as acting interior minister, along with the Taliban’s enduring ties to al-Qaida, also suggest that Afghanistan may withdraw from global efforts against illicit finance.

All told, the U.N. maintains financial restrictions against 17 of 33 members of the new interim Taliban cabinet, Ghulam Isaczai, Afghanistan’s ambassador to the United Nations, wrote in a social media post last week.

Haqqani and Hassan Akhund’s appointments probably resulted from complex negotiations between the Taliban’s various factions, but seem to stray from the militia’s primary focus on securing relief from global sanctions during peace talks with U.S. officials in early 2020, said Alex Zerden, the U.S. Treasury Department’s financial attache in Kabul from 2018 to 2019.

“The leadership decisions send a strong signal that the Taliban is emboldened by their abandonment of peace negotiations, and less concerned at the moment with addressing illicit finance,” said Zerden. “This is a particularly troubling development given the presence of other terrorist groups in Afghanistan such as al-Qaida and ISIS-K.”

Al-Qaida remains active in more than a dozen Afghan provinces, while the Islamic State group’s local affiliate, the Islamic State in Iraq and the Levant-Khorasan, or ISIS-K, maintains “sleeper cells” across the country, a U.N. panel found in a 14-page report published July 21.

ISIS-K claimed responsibility for the suicide attack that killed at least 180 civilians and 13 U.S. soldiers near Kabul’s Hamid Karzai International Airport on Aug. 26.

Ashes to ashes

When the Taliban ruled Afghanistan prior to the Sept. 11 attacks, the nation was a financial backwater with few links to the global banking system. By 1999, months after al-Qaida bombed the U.S. embassies in Kenya and Tanzania, Taliban-controlled Afghanistan became the target of a comprehensive trade and financial embargo.

Afghanistan’s central bank, Da Afghanistan Bank, or DAB, and four other lenders—the Agricultural Development Bank of Afghanistan, Banke Millie Afghan, Afghan National Bank, and the Export Promotion Bank of Afghanistan—secured delisting by the U.N. in January 2002, shortly after a U.S. ground invasion removed the Taliban from power.

Several new banks emerged during the 20-year occupation by the U.S. and other members of NATO, including Afghanistan International Bank, Azizi Bank and Maiwand Bank.

Three state-owned lenders, eight private banks and two branches of foreign institutions were still operating in Afghanistan when Kabul fell to the Taliban last month, according to the DBA’s website, which has not been updated since.

Afghans also had the option of transacting through four digital money-transfer platforms, several other non-bank financial institutions and a handful of foreign exchanges, but the country’s still-nascent financial system now faces drastic reduction—if not outright extinction—amid currency shortages, looming sanctions and increased isolation from the global banking network.

Afghanistan’s anti-financial crime framework faces a similar fate.

U.S., international and domestic efforts to build up a reputable FIU and craft a statutory and regulatory framework for tracking and seizing funds tied to corruption, drug trafficking, terrorism and other crimes began coalescing in 2007 and 2008, said Stuart Jones, Treasury’s attache to Kabul at the time.

“A lot of resources were put into capacity building and technical assistance for the central bank and FIU,” said Jones, now chief executive of Sigma Ratings in New York. “The FIU began moving towards digitization of suspicious transaction reports and other paper records, and enormous resources were invested into law enforcement’s ability to use the STR database.”

FinTRACA joined the Egmont Group at the beginning of 2010. In June 2012, Afghanistan formally entered an agreement with the Financial Action Task Force and its regional affiliate, the Asia Pacific Group, to eliminate deficiencies in its anti-money laundering and counterterrorist financing controls.

FATF removed Afghanistan from its list of jurisdictions deemed especially vulnerable to financial crimes five years later, in June 2017, and by 2018, FinTRACA was sharing intel on potentially illicit transactions with the other members of the Egmont Group through the ESW platform, according to the FIU’s annual report that year.

Over more than a decade, the FIU recruited dozens of staff that stood out for their “professionalism, dedication, sophistication and integrity,” said Zerden, who worked closely with FinTRACA during his time in Kabul.

The Taliban’s conquest puts FinTRACA’s current and former employees at risk for bolstering supervision of banks, money transmitters, hawaladars and other components of the Afghan financial system in a way that may have conflicted with the blacklisted militia’s interests, and similarly exposes bankers who submitted STRs on Taliban finances to retribution.

FinTRACA received 126 STRs in March, its highest monthly total for the past three calendar years, and received 25 STRs in the first two weeks of August before the Taliban’s convoys entered Kabul. The FIU counted 70 employees as of this year, according to its website.

“Given how quickly the Afghan government collapsed, I do not know if DAB or FinTRACA employees were able to prevent the Taliban from accessing those records,” Zerden said. “If the Taliban is able to access DAB or FinTRACA records, I think the risk of misuse of those records is high.”

STRs filed on U.S.-backed officials suspected of embezzlement could provide the militia a roadmap for meting out its traditionally ruthless form of justice, sources told

On Aug. 23, the Taliban appointed Mohammad Idris, a loyal if little-known operative who formally headed the militia’s economic committee, as central bank governor, saddling him with the unenviable task of preventing the total collapse of Afghanistan’s financial system and kickstarting the country’s remaining banks.

His experience with monetary and regulatory policy issues, including in the context of illicit finance, is unclear.

Contact Valentina Pasquali at

Topics : Anti-money laundering , Counterterrorist Financing , Sanctions
Source: Afghanistan , Egmont Group
Document Date: September 13, 2021