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Feature 12th May 2021

Asset recovery as a route to reconciliation in Afghanistan

Corruption pervades Afghanistan’s social, political and economic fabric. It has been disempowering generation after generation, creating a system where corruption reproduces and perpetuates itself. When looking into the endemic corruption of a country like Afghanistan, where the greed of the corrupt seems insatiable, one may begin to wonder: how much is enough?

By Roberta Falvo, Senior Project Officer for Transparency International UK

For over two decades, a number of scandals have emerged in Afghanistan, uncovering the complex networks that facilitate illicit financial flows in and out of the country. Perhaps the most prominent is the Kabul Bank scandal[1]. While the intricate corrupt web started in the late 1980s, it was only in 2010 that the truth was uncovered. It was discovered that almost $1 billion dollars[2] was lost to corruption through illegal loan schemes and fraudulent banking, intertwined with a number of other corrupt behaviours, such as international bribery. Following the 2001 US invasion, after the 9/11 attacks, the international community provided massive amounts of aid to Afghanistan. However, as the aid grew, so did the predation. Many government networks benefitted from the large amounts of money and aid poured into the country, such as the Karzai family, who was often accused of embezzling large sums to build their fortune[3] by kick-starting real estate companies and infrastructure development, but rigorously keeping their money outside the country, rather in the United States, Dubai or Turkey. In fact, whilst brothers of the President Karzai were shareholders of Kabul Bank, they did not received prosecutions, and are now denying any wrongdoing. The international community has, in fact, not been putting enough pressure on politicians to operate with integrity and create the necessary conditions for international aid money not to be wasted and misused.

The surge of scandals resulting in vast amounts of money being funnelled out of Afghanistan triggered the international community to begin discussions about fighting illicit financial flows. Concepts like asset recovery and beneficial ownership transparency started to gain traction, linked to conditions of international loan and grant agreements, and the Afghan government pledged to build a framework to tackle illicit finance across several fora. It was these themes that formed the basis for the more than twenty promises made by the Afghan government at the 2016 London Anti-Corruption Summit.

Shortly after the Summit, Transparency International UK realised that all these commitments would have remained nebulous words without a monitoring mechanism to ensure transparency and accountability. As a result, in 2018, we developed the global pledge tracker, a tool to monitor the status of over 170 commitments made by over 20 countries at the London Summit.  Progress, or lack thereof, is tracked every six months with the support of partners in each country. To complement this tracking exercise, we started engaging in active accountability in various countries, including Afghanistan, where we work with Integrity Watch, a civil society organisation committed to the same values as Transparency International. Integrity Watch then provided local expertise which is key to ensure the Afghan government would keep its promises.