FCA warns firms on Afghanistan terror financing and money laundering risks

The FCA has told financial services firms to be on guard against the risks of money laundering or terror financing linked to the fall of Afghanistan to the Taliban.

The final UK and US troops pulled out of Kabul on 30 August leaving the hardline Islamist group in charge in Kabul after a 20-year war.

The FCA said on 31 August that firms should “ensure that they appropriately monitor and assess transactions to Afghanistan to mitigate the risks if their firm being exploited to launder money or finance terrorism”.

Afghanistan’s financial system is in turmoil with social media posts showing long lines of people outside banks trying to withdraw money.

READ What impact will the Taliban’s rise have on the dollar?

The City watchdog said that firms should be vigilant amid the current crisis and ensure that they were not being exploited for money laundering or terror financing purposes.  

“While Afghanistan is not currently listed as a high-risk jurisdiction…firms are required…to apply risk sensitive enhanced due diligence measures where there is a high risk of money laundering or terrorist financing,” the FCA note said.

“We expect firms to consider the impact of these developments on their anti-money laundering policies and procedures in a risk-based manner, and to take the steps necessary to ensure they continue to meet their legal and regulatory anti-money laundering and reporting obligations,” the FCA said.

READ Afghanistan bank governor fears economic collapse

It also told firms to “ensure that suspicious activity is reported to the UK Financial Intelligence Unit at the National Crime Agency and that they meet their obligations under Money Laundering Regulations and terrorist financing legislation.”

The FCA also reminded firms that sanctions were in place in respect to Afghanistan and told firms to continue to screen against the UK sanctions list.

To contact the author of this story with feedback or news, email James Booth

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