Watchdog: Cash not being monitored leaving Kabul airport

By Jeremy Herb - 12/11/12 05:15 PM ET

Afghan officials at the Kabul airport are not recording the cash that leaves Afghanistan through the airport, an U.S. watchdog said Tuesday.

A new report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) found that Afghan officials were not properly using bulk currency counters provided specifically to monitor cash leaving the country. The machines were powered up but were not connected to the Internet or servers to send tracking data, the investigation found.

The SIGAR report also raised concerns about VIPs who go through different security procedures avoiding a bulk currency counter, as well as a “Very Very Important Persons (VVIP)” lounge recently built that also bypasses the counters.

“The persistent delays in instituting basic anti-money laundering procedures” by the Afghan government at the Kabul airport “are deeply troubling,” the report says.

“Although proper controls to monitor cash flows are important for any country to institute, they are particularly critical for a country fraught with corruption, narcotics trafficking, and insurgent activity.”

The report said that while Afghanistan is a cash-based economy where large movements of money are typical, bulk cash flows raise the risk of money laundering and smuggling, tools used to finance terrorism and narcotics activities.

Afghanistan had an estimated $4.5 billion taken out of the country in 2011, according to the Congressional Research Service.

Corruption in Afghanistan is a major concern as the country transitions to its own security and reconstruction when NATO troops are slated to leave in 2014. The international community has pledged to commit funding to the Afghan reconstruction, but some of those funds could disappear if corruption issues are not properly addressed.