Afghanistan open for business – IN Magazine

by | Jun 6, 2018 | Advice, Industry News, Info

David Frend, barrister and consultant for Proelium Law has been featured in this month IN magazine and has given 7 tips for setting up a new venture in Afghanistan.

Afghanistan is primed for business. Extraction and mining is growing again. Kabul is playing its role in the revived Silk Road hub. Logistics, building and construction, infrastructure and ancillary businesses are all thriving. NGOs continue to run significant development projects.

“If you do your due diligence, always put security first and spend time establishing trusted relationships, Afghanistan is a great place to do business.”

You can read the article online here

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Anti Money Laundering and Counter Terrorist Financing are two subjects often linked but misunderstood.

Some quick distinctions to understand - the activity of money laundering is where cash raised from criminal activities is made to look legitimate and re-used in the financial system.

The activity of terrorist financing is less focused on the source of the funds, but interested in what those funds are used for.

The Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) legislation is important to your business, particularly if your business is engaged in legitimate activities in overseas or high risk jurisdictions. In the UK for instance you need to establish if Money Laundering Regulations apply to your business or not. See here for guidance.

Importantly, on 10th January 2020, new legislation was enacted in UK in the form of the 5th EU AML Directive. Amongst other areas, brings cyptocurrency into the purview of legislation and places obligations on business owners to make checks in respect of identifying beneficial owners and when enhanced due diligence is required. For the legislation click here. For a easier to understand guide click here.

What do I need to do ?

Making sure you know the source of any funds and where any funds you are giving out are going, is very important. Ensure you have a due diligence process in place if you are engaging with local suppliers and check the backgrounds of locally employed staff. You can only do so much to ensure you don't fall foul of the legislation but remember - the UK legislation has extra territorial reach, which means as a UK firm operating in a foreign country, you could still be prosecuted for offences under the legislation in UK. See here for guidance

The issues raised here may seem somewhat off putting for you to even engage in business. Ensuring you comply with the requirements (or at least establishing whether you need to) and then implementing systems to do so, will be a huge boost to your company management systems.

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