Afghan moneychangers on strike after license fee hike

Kabul – Thousands of stockbrokers closed across Afghanistan on Sunday after Taliban authorities imposed a sharp hike in licensing fees, the brokers commission said, in a bid to slow money laundering and the financing of terrorism, according to financial analysts.

Afghanistan’s formal banking system collapsed when the Taliban returned to power in August last year, ending two decades of US-led military intervention in the deeply impoverished country.

Since then, bureaus de change – which exchange currency, make informal money transfers and even provide loans – have played a key role in meeting the financial needs of 38 million citizens mired in the humanitarian crisis.

“Thousands of foreign exchange offices are closed in most parts of the country in protest against central bank conditions,” Abdul Rahman Zeerak, spokesman for the Afghan Foreign Exchange Commission, told AFP.

He said the central bank had raised licensing fees to five million Afghans ($56,000) from around 300,000.

Zeerak also claimed that the bank was insisting that transactions be done online under new licenses and that brokers must have a minimum of 50 million Afghans to operate.

“That’s a lot of money,” he said. “Money exchangers are not so strong financially.”

The brokers’ commission said currency dealers in the capital Kabul and cities such as Herat and Kunduz had been closed as part of the strike.

Meanwhile, Afghanistan’s central bank – Da Afghanistan Bank – has warned that exchangers operating without a license “will be subject to legal action”.

Spokesman Mohammad Sabir Momand said in a statement that the institution was “committed to transparency and security” in the financial sector.

While informal money changers provide a vital service, they also lack oversight and analysts say their system can be used to launder money and fund militant organisations.

Former Afghan central bank deputy governor Khan Afzal Hadawal said the Taliban’s new move was driven by a desire to demonstrate to the international community that they were countering terrorist groups in the country.

“The easiest way for money launderers and terrorists was to go through exchange offices,” Hadawal told AFP.

“What they (the Taliban government) have done is they’ve raised the requirements, so those who can’t qualify…by default they will be closed.”

After making a hasty withdrawal, the United States seized billions of dollars in Afghan assets and international donors suspended the massive influx of aid money that was supporting the Afghan economy.

Many foreign countries have granted aid to the nation on the condition that the Taliban regime guarantees human rights and prevents international terrorist groups from organizing in Afghanistan.