Finance Minister and U.S. Treasury Secretary sign MoU on financial capacity building and technical assistance

23 March 2015: Afghanistan Finance Minister Eklil Hakimi and U.S. Treasury Secretary Jacob Lew exchange copies of a memorandum of understanding during talks at Camp David March 23, 2015 in Camp David, Maryland. The MoU solidifies American support for a financial program that will set Afghanistan on a path toward stability and independence. The MoU is in the following:

Whereas the Governments of the Islamic Republic of Afghanistan (Afghanistan) and the United States of America (the United States) (together, the Participants) seek to enhance cooperation on capacity building and technical assistance in public financial management and sight of the financial sector: 

Reaffirming our commitment to a sovereign, prosperous, and stable Afghanistan;

Recognizing the importance of supporting Afghanistan’s economic reform initiatives and sending a strong signal of sustained U.S. support;

The Governments of Afghanistan and the United States hereby affirm their desire to achieve the following:

  1. The U.S. Department of the Treasury, in coordination with U.S. Embassy Kabul, working closely with the Afghan Ministry of Finance, Da Afghanistan Bank, and other counterpart ministries and institutions, intends to develop capacity -building and technical assistance programs in the following areas:
  1.  Programs to strengthen Afghanistan's system of public financial management by enhancing Afghan government capacity, including in the following areas:
  • budget formulation and execution;
  • cash management;
  • pension system review and reform;
  • liability management and risk mitigation;
  • funding strategy and fiscal planning:
  • revenue generation and management;
  • national and sub -national fiscal relations; and
  • use of digital channels, including mobile technology, to make government
  • payments and collections.
  1. Technical assistance to Da Afghanistan Bank designed to enhance supervision and oversight in the financial sector, including by:
  • strengthening bank supervision;
  • risk -based auditing;
  • building capacity to resolve problem banks;
  • developing implementing regulations for Afghanistan's new banking law; and
  • Building capacity to oversee provision of digital payments and related financial Services ("e -money").

3.  Technical assistance to Afghanistan’s financial Intelligence unit (“Fin TRACA”) that will facilitate the development of:

  • Fin TRACA’s capacity to perform its core functions as a financial intelligence unit:
  • Efforts to increase awareness of Anti-Money Laundering/combating Financing of Terrorism (AML/CFT) responsibilities with various government stakeholders, including prosecutors and judges; and
  • Fin TRACA,s capacity to engage with the financial sector, including Money service providers (MSPs)

4.   In addition, the U.S. Department of the treasury intends o facilitate the identification of other U.S Government agencies or multilateral institution that may be able to provide assistance to support Afghanistan’s goals in the following areas:

  • Customs and border management and administration to address issues such as false invoicing and trade-based money laundering.
  • Criminal asset for feature and recovery: and
  • Privatization of state –owned enterprises.

The U.S Department of the Treasury intends to identify how its expertise in providing technical assistance in areas such as financial law enforcement and commercial banking sector development could help further these important goals.

II. The Participants intends to engage in consultations regarding the design and development of these capacity – building and technical assistance efforts in an expeditious manner; with a view towards finalizing Terms of Reference to  govern such efforts between the U.S Department of the Treasury; and the ministry of finance ; Da Afghanistan Bank ; or other Afghan ministries or entities; as appropriate.

This Framework for Cooperation is signed in Washington; D.C on March 23: 2015

Original copy of the MoU