Editor in Chief: Moh. Reza Huwaida Friday, March 29th, 2024

Law on Money-Laundering Lands in House

Law on Money-Laundering Lands in House

KABUL - Two draft laws on anti-money laundering and proceeds of crime were presented before the Wolesi Jirga for approval on Saturday -- two days after Chinese banks halted dollar transactions with most Afghan commercial institutions.

The halt to dollar transactions by Chinese banks has made it difficult for businesses to pay for imports, the central bank chief, Noorullah Dilawari, told a foreign news agency on Thursday.

Acting Justice Minister Mohammad Yusuf Halim and Minister of Parliamentary Affairs Humayun Azizi jointly tabled the draft laws in the lower house. Halim said a presidential decree preventing money-laundering was issued a decade ago. It is currently being used as a law.

However, he said during that period, the world’s banking system had witnessed a lot of progress and changes, with most international banks working in close cooperation with the International Monetary Fund to frame laws for preventing money-laundering and financing terrorism.

Halim said in order to meet international standards, virtual bank accounts had been banned under the draft law that defined some essential limits on banking relations. With a virtual bank account, most transactions take place over the Internet.

Halim said some provisions having similarities with other laws had been removed from the new draft, asking the lower house to endorse the bill without any delay.

He said a prompt approval of the law would convince international financial institutes that Afghanistan was committed to its pledges.

“If the law is not approved forthwith then Afghan banks will find their relations with international banks cut off,” he said.

Dilawari has warned if the law was not approved within 10 days, Afghanistan could be blacklisted in June by the Financial Action Task Force (FATF), an international body that sets standards on how countries combat money laundering.

Banks have been struggling since FATF threatened Afghanistan with the punishment early this year. "That has been affecting our banks' ability to transfer money for anything," Dilawari has said, describing for example how students abroad were unable to receive money from their parents.

The governor said some certain provisions included in the central bank's original draft had been removed without its knowledge by the Ministry of Justice.

Time is running out before the FATF decision in June. The draft legislation submitted to parliament, in its current form, will not save Afghanistan from the blacklist even if it is passed in time. "They made some changes to the law without discussing it with us," Dilawari said.

The governor said emergency meetings were being held with members of parliament and other officials to get the provisions written back into the draft before it was passed to the upper house for approval.

The central bank is hoping to convince FATF to delay its decision because Afghanistan's presidential elections are under way.

"It would be unfair to have the new government deal with the major problems caused by the blacklist. So we are hoping this process will be extended," Dilawari said, adding that this was a long shot.

The current bill, having seven chapters and 45 clauses, has already been approved by the Council of Minister.

The second draft law on terror financing was also presented before the lower house, with Halim saying a presidential decree remained in place in this regard since 2003.

He said international financial institutes had forwarded their recommendations regarding the laws on money-laundering and crime proceeds.

He said provisions calling for judicial investigation into terrorist funding and confiscation of such money had been incorporated into the law on terrorist financing. He said this law too should be approved at the earliest. The law has five chapters and 23 clauses.

Speaker Abul Rauf Ibrahimi assured the drafts would soon be handed over the house panel concerned for a discussion before being tabled in the general session.

The bills would become laws after being approved by the two houses and signed by the president. (Pajhwok)