Two major U.S. money transfer services have suspended payments in Afghanistan, and U.S. banks are looking more closely at transactions with their Afghan counterparts, pending clarity on whether U.S. sanctions to the Taliban they apply to the whole nation now that the Islamist group has control.
The result could deepen the country’s short-term financial crisis, and if sanctions were applied more broadly to any trade relationship with the Taliban-controlled nation, Afghanistan could join North Korea and Iran. as a pariah in the international financial system.
The utmost prudence of banks runs the risk of slowing down the cash flows needed to conduct business and other transactions. The decision of Western Union Co. bank transfer services and MoneyGram International Inc. Stopping doing business in Afghanistan restricts the flow of payments abroad which are a key source of support for many Afghan families.
A previous guide from the global terrorist finance watchdog, the Financial Action Task Force, warned member countries that they should freeze Taliban assets, given the Taliban’s designation as a terrorist group by the United States, the United Nations and the United Nations. other countries, “and make sure that no funds or other assets are available to them, either directly or indirectly.”
With the Taliban seizing key cities in recent weeks, including the capital, Kabul, last weekend, and taking control of key state institutions, markets and industries, financial officials say they are concerned that sanctions will be imposed. apply to a much wider range of transactions, including payments to Afghan entities through the country’s commercial banks.