Assessing the illicit finance and terrorist financing nexus in the case of Afghanistan since the fall of the Taliban in 2001
Project Completed
PROJECT TEAM
Tom Keatinge
Royal United Services Institute
Contact: TomK@rusi.org
Tom Keatinge is the founding Director of the Centre for Financial Crime and Security Studies (CFCS) at RUSI, where his research focuses on matters at the intersection of finance and security. He has a background in investment banking at J.P. Morgan, and a Master’s in Intelligence and International Security from King’s College London, where he studied the effectiveness of the global counterterror finance regime. He is currently a specialist adviser on illicit finance to the UK Parliament’s Foreign Affairs Committee ongoing enquiry.
Jessica Davis
Royal United Services Institute
Contact: Jmd@insightthreatintel.com
Jessica Davis, an expert in terrorism and illicit financing, serves as President and Principal Consultant at Insight Threat Intelligence and is President of the Canadian Association for Security and Intelligence Studies. Jessica has a background in military intelligence analysis with the Canadian Military, and has held a policy role at Global Affairs Canada, before leading a team with Canada’s financial intelligence unit, FINTRAC. Her last government position was as senior strategic analyst at CSIS.
Jessica now focuses on bringing evidence-based solutions to both public and private sectors to counter illicit financing and terrorism. She is pursuing a PhD at Carleton University's Norman Paterson School of International Affairs and has authored numerous publications, including an online course on terrorist financing analysis.
PROJECT SUMMARY
With the Taliban's return to power in Afghanistan in August 2021, reassessment of the international community's financial relationships with Kabul is imperative. Understanding the distinction between illicit finance risks and terrorist financing risks, and their interconnectedness, is crucial. This is evident in the swift severance of financial links with Afghanistan by the international community post-Taliban takeover, and the cautious approach of multilateral organisations and aid agencies in the humanitarian response for the Afghan population.
This research aims to provide a clear picture of the available information on both issues, increase understanding of the ways these threats combine; and identify effective application of existing capabilities for future disruption activity.
Research questions:
What are the crossovers between international illicit finance and money laundering (by criminal actors), compared to terrorist financing (terrorist actors)?
How do the structures, mechanisms and methods, enablers and jurisdictions used to facilitate money laundering for criminals compare to those used for international terrorist financing? Where are they similar, and where are they different?
What global finance vulnerabilities are most likely to be exploited by both terrorists and criminals?
Where is HMG most likely to be able to leverage threat-agnostic capabilities and activity targeting illicit finance to also address terrorist financing?
The research examined methods and mechanisms used by actors to raise, manage, store, move, use, and obscure money and proposed actions to disrupt illicit financial flows. These recommended actions would help combat illicit financing in Afghanistan, as well as strengthen the integrity of the global financial system writ large.
Policy options include:
Enhancing the monitoring of aid and donor funding entering the country
Facilitating the adoption of foreign asset and beneficial ownership tracing
Introducing reforms to the hawala and banking sectors
Addressing deficiencies in international sanctions regimes are seen as potential policy options.
PUBLICATIONS
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Illicit financing in Afghanistan: Methods, mechanisms and threat-agnostic disruption opportunities (SOC ACE Research Paper 11)
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Illicit financing in Afghanistan: Methods, mechanisms and threat-agnostic disruption strategies (SOC ACE Briefing Note 17)
ENGAGEMENT
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Tom Keatinge, ‘Afghanistan under the Taliban: the unintended consequences of sanctions’, WiredGov, 25 October 2022.
Tom Keatinge & Gonzalo Saiz, ‘Afghanistan under the Taliban: the unintended consequences of sanctions’, RUSI Commentary, 24 October 2022.
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Expert panel event ‘Sanctions and illicit finance in Taliban Afghanistan’, RUSI, 26 January 2023. Panel: Jessica Davis, CFCS Associate Fellow, President Insight Threat Intelligence; Alex Zerden, Founder and Principal, Capitol Peak Strategies, and Adjunct Senior Fellow at the Center for a New American Security (CNAS); Arian Sharifi, Lecturer at the School of Public and International Affairs, Princeton University; Moderated by Gonzalo Saiz, CFCS Research Analyst at RUSI Europe.