After suspending their operations on August 18 following the seizure of power in Kabul, money transfer giants Western Union and MoneyGram are back in business. This decision is linked to the reopening of banks and an improvement in the flow of cash in the country.
Banks reopen their branches
Since the Taliban seized power, the country's economy has slowed to a crawl. In recent weeks, queues have lengthened in front of banks as people try to withdraw money before the collapse. In early September, the Taliban allowed banks to reopen, but strict withdrawal limits were imposed.
In this context, Western Union has announced the resumption of its activities in the territory and has decided to offer transfer fees for two weeks, until September 17. "We understand the urgent needs of our customers and are committed to supporting them," explains the American company.
For its part, MoneyGram stresses that money transfers play "a central role in the livelihoods and daily needs of the Afghan people". Restarting the business is one way of supporting this.
According to the World Bank, remittances amounted to $789 million in 2020 for an estimated GDP of $19.8 billion, or around 4%. It has to be said that many Afghans depend on payments sent by family members who have fled abroad. Although most of these payments are sent from Iran or Saudi Arabia, regular financial flows also come from the USA, Germany and Great Britain.
Operations subject to the new regime
In a statement, Western Union and MoneyGram said they had ensured that the resumption of transfers would not pose a problem of compliance with the economic sanctions imposed by the United States on Afghanistan.
According to Tyler Hand, Head of Operations Compliance at Western Union, personal money transfers to Afghanistan can be handled by financial institutions. The company has been in regular contact with the U.S. government since the withdrawal of U.S. troops from Afghanistan, and says that "humanitarian activities, including remittances, are consistent with U.S. policy".
So, how long remittances can continue to flow will depend essentially on how the international community reacts to the new regime.
In the meantime, the question of how to handle transfers to Afghanistan, a country that has passed into the hands of terrorists, is worrying specialists in the fight against the financing of terrorism and the laundering of money by global banks. Indeed, individuals targeted by the UN as terrorists have become close to the official government. This situation has put American and foreign intelligence agencies on high alert.