Important regulatory update: FCA warning on transactions with Afghanistan

Amid the growing crisis in Afghanistan and the Taliban takeover of the country, on August 31 the UK’s Financial Conduct Authority (FCA) issued important warning for regulated business dealings with Afghanistan.

British regulators expect firms to have strong systems and controls to identify and assess transactions with Afghanistan, which may carry increased risks of money laundering and terrorist financing. It also expects UK businesses to review transactions against HM Treasury list of sanctionswhich includes the names of Taliban members on the United Nations blacklist.

With reports are coming in that the adoption of Bitcoin in Afghanistan could surge amid the turmoil there, cryptoasset companies and financial institutions in the UK and elsewhere will need to be vigilant about any transactions they conduct with other parties in Afghanistan.

Cryptoasset exchanges should already be aware of the need to disclose transactions with high-risk countries.

Regulators previously warned about the increased risk of financial crime in doing business with countries such as, for example Iran, North Koreaand Venezuela. Urging the private sector to carry out enhanced due diligence in doing business with Afghanistan, the FCA has made it clear that it will not tolerate compliance failures by firms that fail to detect high-risk activities.

To meet these regulatory expectations, any cryptoasset or financial institution should have a strong blockchain analytics capability.

Elliptic’s industry-leading package solutions for blockchain analytics enables regulated firms in the UK and beyond to identify high-risk transactions with countries such as Afghanistan.

How Elliptic helps you stay fit

Ours configurable country risk rules allow you to assign risk scores to transactions with counterparties in Afghanistan, ensuring you can take appropriate action and demonstrate your risk-based procedures to your regulator.

You can also use Elliptic screen solutions wallets and transactions against sanctions lists maintained by the UK and other governments so you can prevent dealings with blacklisted parties in Afghanistan.

Contact us today for a demonstration of our solutions and to learn more about how Elliptic’s risk rules can help you ensure the detection of transactions with Afghanistan and other high-risk countries.