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Taliban-controlled central bank fails US audit for release of frozen funds

AT News

KABUL – Afghanistan’s central bank under Taliban control has reportedly failed a US-funded to ascertain whether the bank meets the stipulated US criteria for the unfreezing and return of a portion of Afghanistan’s $3.5 billion in blocked funds.

According to a report from a US Treasury official, a meticulous audit funded by the United States could not secure Washington’s endorsement for the retrieval of bank assets from a $3.5 billion trust fund based in Switzerland. The fund had been established last year and holds around half of the approximately $7 billion in central bank assets that were frozen in August 2021 at the Federal Reserve Bank of New York. This action was taken after the Taliban assumed control of Afghanistan, marking the end of two decades of foreign military involvement.

The U.S. Treasury official emphasized the necessity for Da Afghanistan Bank (DAB) to demonstrate its independence “free from political influence and interference.” This implies the requirement for proficient bankers to replace the three Taliban officials overseeing the bank, all of whom are currently subject to sanctions by the United States and the United Nations.

Moreover, the official highlighted that the bank must satisfy stringent conditions, including instituting effective measures against money laundering and terrorism financing. Additionally, the bank is mandated to appoint a credible, impartial monitor to oversee its operations.

Despite the audit, the U.S. Treasury maintains its stance that the central bank must undergo substantial reforms before the department can endorse disbursements from the Afghan Fund to Da Afghanistan Bank (DAB). An anonymous U.S. Treasury official stated this standpoint, underscoring the importance of comprehensive changes to ensure the bank’s integrity and compliance with international standards.

It’s pertinent to note that the U.S. House of Representatives has introduced an amendment to the National Defense Authorization Act. This amendment aims to prevent any relaxation of sanctions on entities connected to the Taliban unless sanctioned by an act of Congress. The proposed legislation is currently under consideration in the Senate, signifying a heightened focus on oversight and accountability.

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