After the Taliban took over the city of Kabul, it regained its power over Afghanistan. In this case, the most critical problems of the financial world came to the fore again. Afghanistan is one of the leading countries in many financial crimes such as money laundering, drug trafficking, extortion, and mineral exploitation.
How Are Terrorist Organizations Financed?
The financing of terrorism is when terrorists provide the money they need to carry out various actions. Many transactions such as donations, arms sales, money laundering, drug trafficking are the methods used to finance terrorist organizations. Due to the increase in financial crimes in the world, many institutions publish various regulations to prevent these crimes. Terrorist organizations take many different measures to avoid being caught in this regard. Many terrorist organizations can appear to comply with the regulations through trade-based money laundering and finance their organizations in this way.
Trade-based money laundering is a process that can be done in more than one way. They can make money they have appeared as legitimate by methods such as fake invoicing and fake exports.
The Situation of Terrorist Organizations in Afghanistan
After the withdrawal of the American Army from the country, the Taliban, considered a terrorist organization by many countries, took over Afghanistan. In a very sensitive and complex situation, Afghanistan has become the center of many crimes. One of the biggest reasons for all these security problems is that terrorist organizations can still be financed. This illegally obtained money is one of the sources of the fear of the people. Many problems such as mass cash smuggling, money laundering, smuggling, and extortion are crimes that have been committed intensively in Afghanistan for many years. Although many institutions, including the FATF, have introduced regulations to prevent these crimes, Afghanistan is still an inadequate country in combating terrorist financing.
How the Taliban Make Money in Afghanistan?
The biggest example of these crimes we have mentioned is the Taliban, which has recently gained great power. The Taliban obtains enough money to prepare its army of approximately 75,000 people for terrorist activities through the crimes mentioned above. In the United Nations Security Council Report dated June 1, 2021, on this subject, "While impossible to ascertain to any degree of precision, estimates of annual income generated by the Taliban range from $300 million to $1.6 billion.” statements are included. This large sum of money is about a third of the revenue of the Afghan Government.
More than one method is specified in the report on the ways in which this gain is achieved: “The primary sources of Taliban financing remain criminal activities, including drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence. According to the Member States, external financial support, including donations from wealthy individuals and a network of non-governmental charitable foundations, also account for a significant part of Taliban income.” Although the Afghan and USA Governments tried to prevent these financial crimes, they were unsuccessful.
One of the most effective ways of making money used by the Taliban is poppy cultivation. A significant source of the Taliban is agriculture, as most poppy production is done in Afghanistan in the world. While the Taliban collect 10% tax from opium producers, they collect large amounts of tax from smugglers who turn opium into drugs.
Taliban and Money Laundering
It is called money laundering when terrorist organizations present their money as if they were obtained legally. Afghanistan is the country with the most money laundering in the world. The Taliban, which has been on the agenda recently, is a very effective organization in these statistics. The money transfer system, known as the Hawale System in the country, has become a suitable system for illegal activities as it provides uncertainty with its transparency and methods.
In 2011, the Financial Action Task Force (FATF) published its latest Mutual Evaluation Report on implementing money laundering and counter-terrorism financing standards in Afghanistan. However, due to the openness of their systems, the Afghan Government has not been successful in its efforts to prevent money laundering.
You can read the Afghanistan Anti-Money Laundering Guide at our website.