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The Killid Group

Money smuggled out of Afghanistan

Written by Mohammad Reza Gulkohi and Nematullah Taneen
Sunday, 04 March 2012 11:18

Money smuggled out of Afghanistan Widespread corruption is behind the 4.6 milliard dollars suspected to have been taken out illegally in 2011 by top officials and the mafia. The year before the money smuggled was estimated at 2.3 milliard USD.
On paper no one can take more than 1 million Afghani or 20,000 USD outside the country without informing the authorities. However, billions of dollars have been sent over the last decade through hawala transactions and others to safe havens like Dubai by top officials and their relatives, the drug mafia and extortionists including the Taleban.
More than 3 billion USD in cash - packed into suitcases - have been legally flown out of the country according to Afghan and US officials. General Baz Mohammad Ahmadi, deputy minister of interior affairs, says the Afghanistan  Bank, the central bank, has focused only on money flying out of Kabul airport. "Other air and border points are ignored. The (amount of) illegal transfers would only increase if these were also checked," he told Killid.
In 2011 an amount of 4.6 milliard USD (1 milliard is equal to 100 million USD), double the amount from the previous year, was estimated to have been lost to the country from billions of dollars that came in, some of it from US and European contracts to provide security, supplies and reconstruction work for foreign troops in Afghanistan. NATO spent about 14 billion USD in 2011 alone, according to a report in the Wall Street Journal newspaper.
Under Article 6 of the banking law on money transfers no one can transfer more than one million or equivalent foreign currency by cash or through cheque, post or messenger or other means without previously informing the authorities. The law lays down a stringent punishment. "In case of conviction the money and the related documents will be confiscated and the person will be fined the equivalent of the mentioned amount." 

Why is money leaving the country?
Tawfeeq Dawari in the Commerce and Industry Chamber believes the huge sums of money leaving the country indicates a lack of faith in the government's ability to restore peace. "Political stability relates to economic stability," he explains. "Capital needs stability to flourish. Unfortunately this has not been provided." According to him, every year roughly 10 million USD are stashed illegally or invested in banks in Dubai for instance. The chief of Afghanistan Bank and other officials did not respond to several attempts to interview them.
Yunus Negah, media consultant in the Commerce and Industry Chamber, says the flight of capital has long-term negative results which cannot be blamed on capital alone. "We should know good governance as well as proper rules and laws prevent the anarchies  and ensure high investments," he adds. "The implications for the future are disastrous," he warns.
Negah thinks the mafia including drug traffickers and Taleban elements use the hawala and other means to take money out of the country. "The illegal transfers mostly serve the mafia bands than people," he told Killid. More money is taken legally out of the country than collected in taxes by the government each year.
There are calls for tighter monitoring of hawalas, which are legal operations but have to submit monthly reports of every transfer made to the central bank and suspicious activity reports in case they suspect illicit transfers. But the hawalas operate on an honour system, and compliance would be against the custom.
"Unless laws and regulations are put into practice nothing will change," says Dawari.
Officials in the government admit there is a problem, but are quick to pass the buck. Aziz Shams, spokesman in the Ministry of Finance, blames the big contracting companies for siphoning off funds, and sending it abroad, but does not give names or figures. He chooses to reply in generalities. "There is a law (regarding transfer of funds)  but it relates to Afghanistan Bank, how to implement the law and how to supervise the transfer of the money." According to him, "Unfortunately proper supervision is not taking place in the airports on money transfer." He suggests that stricter laws and regulations should be set to prevent these instances.

What happens to the money?
Finance Ministry spokesman Shams says there is no follow-up on "whether the money has returned back or not, or where it is spent".
The spokesman believes a parallel currency market is a problem. He points fingers at the Sharay-e-Shahzada market, the main currency market in Kabul. Here Afghan money dealers can send money within minutes or hours while through the banks it could take days. Also bank charges are more than hawala transactions.
Shams accuses the hawala agents of transferring money for the opium mafia, a charge denied by the Tellers Union.
Najeebullah Akhtari who heads the union in Shahzada Market says, "Our customars are common people as well as trading community. The money we are transferring is just for importing goods into the country." He says those who are sending out millions of dollars are "mafia". Ordinary people do not have such large sums of money, he adds.
Economist and lecturer at Kabul University, Dr.Ruhullah Amin, says the government is weak, and has not been able to go after the mafia, and political heavyweights who are to blame. "Until there are punishments and action taken for illegal activities, people should expect the situation to worsen," he says.

Comments (1)

  • Saturday, 07 April 2012 06:58 | ahmed
    No LAWS and no punishments are going to cure this problem. One can read such unacceptable news as : " عده از زنان فقیر که در سرک های کابل مصروف گدایی اند از تجلیل از روز جهانی زن بی خبر اند و می گویند که برای پیدا نمودن لقمه نانی در سرک ها سرگردان اند. این زنان در صحبت با رادیو آزادی گفتند که طی سال های اخیر پول های زیاد به عنوان کمک به زنان افغان در افغانستان سرازیر شده اند، اما نهاد های مسوول این کمک ها را به زنان مستحق نرسانیده اند. «مجبور استم گدایی کنم،نان ندارم هیچکس ندارم که کار کند و برای ما نان بی آورد،برای ما برنج و روغن ومواد غذایی بدهند اگر گدایی نکنیم می میریم،هیچ چیز نداریم، دولت به ما هیچ کمک نکرده است. اسم من عالم بی بی است طفل ام را همراهم به گدایی می گردانم، اگر بنام ماهم کمک شود به ما نمی رسد، مسوولین خود آنرا می گیرند،ما اگر گدایی نکنیم چی کنیم مجبور هستیم باید به ما مواد خوراکی کمک شود تا حالی هیچ کمک با ما صورت نگرفته اگر نه چرا دست به گدایی بزنیم، گدایی کاری خوبی نیست.» {{ What can one say about this gap between the haves and the have-nots ? it is immoral !!!}}

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