U.S. allows personal remittances to flow to Afghanistan (updated)

MoneyGram International

02/09/2021 18:13

(Adds U.S. Treasury guidance, details of which institutions
affected)
    By Andrea Shalal
    WASHINGTON, Sept 2 (Reuters) - The United States has told
financial institutions that they may process personal
remittances https://www.reuters.com/world/what-leverage-do-us-allies-have-over-taliban-afghanistan-2021-09-02
 to Afghanistan, a Treasury Department spokesperson said on
Thursday, a move taken in tandem with steps to ensure the
continued flow of humanitarian aid.
    The decision to allow money transfers could provide some
relief for the Afghan economy, which is nearing collapse after
moves by the United States and other countries to halt foreign
aid and freeze some $9 billion in Afghan assets after the
Taliban takeover on Aug. 15.
    Many Afghans rely heavily on payments from migrant workers
overseas. The remittances amount to an estimated $789 million in
2020, or just over 4% of Afghanistan's gross domestic product,
according to World Bank data.
    Western Union https://www.reuters.com/business/western-union-suspends-services-afghanistan-2021-08-19
  WU.N , the world's largest money transfer firm, and MoneyGram
both suspended such services after the Taliban takeover,
shutting off a major source of funds that many families rely on
to pay for food.
    The U.S. Treasury's guidance from its Office of Foreign
Assets Control in response to queries over the past week paved
the way for those service providers to resume operations in
Afghanistan, but also applies to other banks and financial
institutions, the spokesperson said.
    Western Union said on Thursday it is resuming https://www.reuters.com/world/asia-pacific/exclusive-western-union-resuming-services-afghanistan-senior-exec-2021-09-02
 money transfer services to Afghanistan, saying the decision was
in line with a U.S. push to allow humanitarian activity to
continue.
    Treasury on Aug. 25 issued a license https://www.reuters.com/world/asia-pacific/exclusive-us-treasury-issued-new-license-ease-flow-aid-afghanistan-2021-09-01
 authorizing the United States and its partners to continue to
facilitate humanitarian aid, including the delivery of food and
medicine, despite U.S. sanctions on the Taliban.
    Typically, most of the payments sent to Afghanistan by
migrant workers have come from Iran, Saudi Arabia, Britain,
Germany and the United States.
    Afghanistan's economy is heavily dependent on cash and there
are few banks, which makes remittances so important. Sanctions
in place against the Taliban could make broader financial
institutions reluctant to handle private remittances, despite
the Treasury guidance, financial experts said.

 (Reporting by Andrea Shalal; Editing by Angus MacSwan and Grant
McCool)
 ((andrea.shalal@tr.com; +1 202-815-7432;))