Annual Report 2020
Annual Report 2019

NRA Final Workshop

The final NRA workshop was held on the 24th - 26th of August 2019. Relevant stakeholders and participants of the NRA assessment process attended the workshop. The workshop was held in the World Bank office Kabul and was attended by high-ranking government officials, dignitaries from the World Bank and other stake holding entities, and the NRA working groups.

The NRA is conducted based on FATF recommendations. As per the approval of the DAB Supreme Council and Instructions received from Office of The National Security Council, FinTRACA coordinated the NRA. The World Bank group’s role in the NRA process was limited to providing technical assistance to the working groups.

The NRA forms the basis for the application of risk-based implementation of an AML/CFT regime by aligning the regime to the specific threats and vulnerabilities confronting the country. The NRA allows for a better understanding of needs and priorities, which in turn can result in strengthening of the national combating abilities to mitigate ML and TF risks.

The objectives of the NRA are:

  • To identify, assess, and understand the ML and TF risks faced by different sectors;
  • To adopt a risk-based approach for the mitigation of ML and TF risks;
  • To facilitate the allocation of resources in order to tackle the ML and TF risks;
  • To develop a comprehensive AML/CFT Action Plan for financial and non-financial businesses and professions; and
  • To facilitate the development of ‘Financial Inclusion Strategy’ in the country.

Five working groups comprising of 45 individuals from 17 public and private sector entities conducted the NRA. During the first two days of the final NRA workshop, the working groups presented to the peer reviewers of the World Bank, their findings and the related action plan that was designed based on the findings of the assessment teams.

The following is the breakdown of teams that took part in presentations during the first and second day of the workshop;

BANKING: The banking team which comprised of members from the Financial Supervision and Risk and Compliance Departments of the Central Bank (DAB), the FIU (FinTRACA), and Afghanistan Banking Association (ABA), presented their NRA findings of the sector as well as their related action plan. The banking team leader began his presentation by introducing the sector and providing statistical data concerning the size and contribution of the sector to the country’s GDP.
The team then presented their preliminary findings which comprised of the ratings designated to the variables assessed as per the World Bank Model. Decisive factors concerning the ratings of each variable were discussed in detail.

The peer reviewers of the World Bank and other workshop participants discussed the findings of the baking team. The banking team observed the comments made by the participants and brought amendments to their work accordingly.

Reflecting upon the NRA process the banking working group team leader stated, “The NRA was a great learning experience. This is the first time such a working group, which is comprised of various stakeholders, conducts such an assessment on the banking sector of the country. Bringing these stakeholders under one umbrella gave us the opportunity to assess the sector from different perspectives, which was important in outlining a reliable assessment result.”

DNFBPS: The working group assigned to assess the DNFBPs sector included members from the Da Afghanistan Bank, Ministry of Justice, Ministry of Finance, Afghanistan Chamber of Commerce and Industry, and FinTRACA. The team began their presentation by providing an overview of the sector in Afghanistan. DNFBP team leader presented the team’s findings in the light of the variables outlined and guidance provided in the World Bank NRA modules. The team also presented sector break down of DNFBPs operating in Afghanistan.

The workshop participants were impressed by the precise and to the point nature of the presentation provided by DNFBPs team. Reflecting on the good work put in to develop a reliable research document, the World Bank peer reviewers stated that the findings depict the hard work and commitment of the team, and that it is time to convert these findings into an appropriate action plan that could be practically undertaken to overcome the deficiencies outlined.

‘Conducting a risk assessment for DNFBPs sector is unprecedented in Afghanistan. The DNFBPs sector is relatively small in Afghanistan as we do not have entities such as casinos, bedding companies and others in the country, however, assessing the ML and TF risks of the sector was an enlightening experience as it helped us in understanding the sector better.” Stated the DNFBPs team leader, Khyber Himmat.

OTHER FIS: The working group was comprised of members from Microfinance Investment Support Facility for Afghanistan, Afghanistan Microfinance Association, General Directorate for Insurance Affairs, Da Afghanistan Bank and Financial Intelligence Unit. Mr. Matin Ghafouri, representing Da Afghanistan Bank’s Financial Supervision Department, led the Other FIs working group. The team leader of the working group presented graphical representation of their findings for other FIs and Insurance sector of Afghanistan. They team also presented periodization ranking of other FIs and insurance sector.

Reflecting on their experience, the deputy team leader of the working group stated,

“This was a great learning experience. We held more than 20 meetings, had five sector presentations, reviewed related law and regulations and manuals. So, NRA was not just a project; it was a great learning process, as the team members found and got to know about secure and vulnerable areas of the sector in terms of AML/CFT regime.”

Vulnerabilities and combating abilities team was led by Inamullah Akbari of FinTRACA. Other members of the working group included representatives from the Ministry of Interior, National Directorate of Security, Supreme Audit Office, Ministry of Finance, Attorney General Office, and FinTRACA.
The team first presented their findings on the overall national vulnerability assessment, which was derived from the country’s national combating abilities and the overall financial and non-financial sectors’ vulnerability. Highlighting the key outcomes of the assessment conducted by the working group, the team leader stated,

“The national vulnerability assessment helped in evaluating the impact of different interventions by regulatory and other relevant authorities, and has identified and prioritized the interventions by regulatory and other relevant authorities that would reduce overall national vulnerability. It’s worth mentioning that vulnerability assessment has also facilitated in comparing the levels of vulnerability in various sectors and ensured the efficient resource allocation’.

The team’s presentation was also inclusive of the research methodology used for this assessment and limitations faced by team while conducting this research.

ML THREATS: The ML threat Team was comprised of members form Ministry of Interior, Ministry Of Finance, National Directorate of Security, Supreme Audit Agency, and Attorney General’s Office. The team first presented the overall rating to the national ML threat, followed by the breakdown of the predicate offences concerning money laundering threat.

The team emphasized upon development of a realistic action plan to address the issues outlined by the ML threat team.

The second day of the workshop was dedicated to presentations of the related action plan of working groups The Director General of FinTRACA opened the second day of the workshop by welcoming the World Bank team and thanked them for providing technical assistance to the NRA working groups throughout the NRA. He stressed upon the importance of the assistance from the World Bank in overcoming the challenges to outline the NRA for the country. He reflected upon the NRA process labeling it to be a learning opportunity for the teams involved. He stated,

“Since this is the very first NRA of the country, it was accompanied with many challenges, and this may not be a perfect NRA; however, the NRA provides a corner stone that could be developed upon. It provides the stepping stone for future risk assessments that would be conducted more effectively”.

Mrs. Lisa of the World Bank group reflected on the presentations provided by the working groups in the first day of the workshop and congratulated the teams for reaching this milestone achieving. She emphasized upon the need to turn the NRA into a high quality national action plan that would assisted the Afghan government to address the deficiencies outlined in the NRA.

The NRA team leaders took turn to present their action related action plan items and the concerned organizations and entities involved in their action plan items. The World Bank team was impressed by the teams’ ambitious action plans. However, certain key observations were made by the World Bank team. The World Bank team recommended that in order to outline an effective and achievable action plan, the action plan must be specific, measurable, attainable, realistic and time-bound. The team outlined the presentations from the working groups to be very effective, however in order to convert the findings into practical steps, it is highly important to draft an equally effective action plan.

The third day of the workshop saw high ranking government officials and other stakeholders of the NRA attend the workshop to discuss the overall findings of the NRA and the related National Action Plan. The Director General of FinTRACA opened the third day of the workshop by welcoming and thanking the respected dignitaries and distinguished guests for attending the third day of the workshop. He reflected on the importance of NRA and related National action plan in the context of addressing the deficiencies outlined by the working groups of the NRA.

His Excellency Mr. Wahidullah Nosher, first deputy and acting Governor of DAB also welcomed the guests and respected dignitaries to the workshop. He reflected on the process of NRA and congratulated the NRA coordinator and the working groups for successfully completing the NRA which he referred to as ‘a milestone achievement’. Reflecting on the aims and objectives of the NRA he stated,

“The NRA is a national level project which is conducted aiming to identify, assess and understand the ML and TF risks of the country. The significance of this document is outlined by the fact that the document presents the major inputs for a comprehensive National Action Plan to mitigate ML and TF risks.”

Following Mr. Wahidullah Nosher’s opening remarks, the coordinator of the NRA; Mr. Nesar Ahmad Yosufzai presented the findings of the NRA and key highlights of the National Action Plan to the participating entities from policy level. The Director General of FinTRACA also reflected on the challenges facing the action plan and assured the stakeholders of consideration of their recommendations.

The policy level officials attending the third day of the workshop discussed certain issues concerning the findings of the NRA, to which the NRA coordinator responded by assuring them of the contribution of the concerned entities in the NRA process and findings.

At the end of the workshop, the participants of the NRA were given certificates of acknowledgement to commemorate their contribution in the National ML/TF Risk Assessment.