Review Found Afghan Central Bank Lacks Independence From Taliban – US Watchdog

WASHINGTON (Reuters) – A U.S.-funded evaluation of Afghanistan’s central financial institution discovered that it lacks independence from the Taliban administration and satisfactory safeguards in opposition to cash laundering and terrorism financing, a U.S. watchdog instructed Congress on Tuesday.

Reuters final month reported that the evaluation, whose conclusions had not been made public on the time, didn’t win Washington’s backing for a return of central financial institution property held in a $3.5 billion Swiss-based belief fund.

The U.S. Particular Inspector Normal for Afghanistan Reconstruction (SIGAR), in a quarterly report back to Congress, disclosed that the evaluation discovered flaws with the administration of the central financial institution, generally known as Da Afghanistan Financial institution, or DAB.

The DAB “lacked independence from the Taliban regime and had deficiencies in anti-money laundering and countering the financing of terrorism,” SIGAR mentioned the evaluation confirmed.

The U.S. Company for Worldwide Growth funded the assessment by an out of doors contractor.

The discovering that DAB lacks independence from the Taliban, which returned to energy after the August 2021 U.S. troop pullout, apparently referred to the three Taliban officers who oversee the financial institution and are beneath U.S. and U.N. sanctions.

Issues in Washington and different capitals in regards to the financial institution’s management and anti-money laundering safeguards are on the coronary heart of a standoff over the Taliban’s demand for the return of DAB money frozen in different international locations since their takeover.

Half of about $7 billion frozen within the U.S. Federal Reserve Financial institution of New York was positioned within the Swiss-based belief fund. The remaining is being sought in lawsuits in opposition to the Taliban introduced by households of victims of the Sept. 11, 2001, assaults on the US. The Taliban harbored al Qaeda militants who plotted the assaults.

A U.S. Treasury official instructed Reuters final month on situation of anonymity that Washington is not going to assist a return to DAB of Swiss-based belief fund property till the financial institution exhibits it’s free “from political affect and interference.”

It additionally should show “satisfactory” controls in opposition to cash laundering and terrorism financing, the official mentioned.

(Reporting by Jonathan Landay; modifying by Grant McCool)

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