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Audit fails to win U.S. backing for release of Afghan central-bank funds

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A U.S. funded audit of Afghanistan's Islamic Emirate-run central bank has failed to win Washington's backing for a return of bank assets from a $3.5 billion Swiss-based trust fund, said two U.S. officials and a former U.S. official, a move that would help ease the country's financial crisis, Reuters reported.

The audit has not changed the U.S. Treasury's view that the bank must make reforms before the department will support disbursements from the Afghan Fund to Da Afghanistan Bank (DAB), said a U.S. Treasury official on condition of anonymity.

The Swiss-based Afghan Fund was set up last year with half of about $7 billion in central bank funds that were frozen in the Federal Reserve Bank of New York in August 2021 after IEA took control of the country as the last foreign forces withdrew following two decades of war.

DAB must show that it is free "from political influence and interference," said the Treasury official, referring to the need for professional bankers to replace the three IEA officials who oversee the bank and are under U.S. and U.N. sanctions.

It also must prove that it has "adequate" controls against money-laundering and terrorism financing and install a "reputable" independent monitor, said the Treasury official.

"Our assessment of DAB remains unchanged,” said one of the U.S. officials. Reuters quoted the two officials and the former U.S. official, who has knowledge of the U.S. position, spoke on condition of anonymity because of the confidentiality of the matter.

The IEA administration spokesman and a spokesperson for the Afghan central bank did not respond to request for comment.

Concerns in Washington and other capitals about the bank's leadership and anti-money laundering safeguards are at the heart of a standoff over the IEA's demand for the return of DAB cash frozen in the United States and other countries after the Islamic Emirate return.

Because the four-member board that oversees the trust fund must approve disbursements unanimously, the support of its U.S. government representative is essential.

Afghanistan remains mired in grave humanitarian and economic crises that some experts say has been worsened by U.S. restrictions hampering DAB's ability to perform key central bank functions, such as ensuring stable exchange rates and prices, read the report.

The audit, funded by the U.S. Agency for International Development (USAID) and conducted by an outside contractor, examined DAB's controls against money laundering and terrorism financing, and its banking oversight and payments departments, according to an April report by the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR).

The findings have not been made public, Reuters reported.

Calling the audit, a "preliminary assessment," the Treasury official said its "limitations" suggested that "more comprehensive third-party assessment efforts may be needed."

Shah Mehrabi, an Afghan-American economics professor who is on DAB's governing board and co-chairs the Afghan Fund board, said the audit - which he has not seen - was completed in March and currently is with the State Department.

The State Department declined to comment.

Mehrabi and his co-chair, Anwar ul-Haq Ahady, a former DAB governor and former finance minister, told Reuters that they would consider the findings once they are available.

Mehrabi said use of the Afghan Fund's assets should focus on stabilizing prices and ensuring banks had enough liquidity, as the entire financial system was at risk from declining foreign donor funds to Afghanistan.

The other $3.5 billion in DAB assets frozen in US is being sought in lawsuits against the IEA brought by families of victims of the Sept. 11, 2001, attacks on the United States. A U.S. judge in February ruled against the plaintiffs who are appealing.

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Afghanistan’s wheat production for this year up by 10%

This increase is welcomed by officials, whose aim it is to encourage farmers to grow the cereal in order for the country to become self-sufficient

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Afghanistan's National Statistics and Information Authority (NSIA) says this (solar) year’s production of wheat totalled 4.83 million metric tons across the country, an increase of about 10% against last year. 

NSIA says the total area cultivated with wheat in Afghanistan this year is 12.2 million hectares. 

The directorate said in total, about 70 percent of cultivated agricultural land in the country is being used for wheat.

Officials said the main reason for the good harvest was timely rains and the switch from poppy farming to wheat. 

This increase is welcomed by officials, whose aim it is to encourage farmers to grow the cereal in order for the country to become self-sufficient. 

Currently Afghanistan needs a total of almost 7 million metric tons of wheat a year in order to cover the population’s needs. 

In order to determine the amount of wheat grown in the country, NSIA analyzed satellite images from the time of cultivation to harvest. 

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BRICS summit gets underway in Kazan, Russia

The two-day summit, which got underway on Tuesday will bring together presidents of Russia, China, India, Brazil, Egypt and Iran along with other leaders.

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Despite the Islamic Emirate’s (IEA) request to attend this year's BRICS summit in Kazan, in Russia, Afghanistan has not been invited to attend.

The two-day summit, which got underway on Tuesday will bring together presidents of Russia, China, India, Brazil, Egypt and Iran along with other leaders.

So far the IEA has not commented on its absence but in May this year, an Islamic Emirate spokesman confirmed they had asked to attend the next meeting.

He said at the time, Afghanistan had good economic relations and trade exchanges with BRICS countries and hoped to participate.

However, Zamir Kabulov, Russia's special representative for Afghanistan affairs, said earlier this month that an invitation to the meeting would not only be dependent on Russia but also on the other member countries.

Although the caretaker government of Afghanistan has not yet been officially recognized by any country, it has good relations with the founding countries of BRICS, including China and Russia.

BRICS, which is an economic organization, was established in 2009 at the initiative of Russia. Brazil, Russia, India and China were its first members, while South Africa joined a year later.
More recently, Iran, United Arab Emirates, Egypt and Ethiopia also joined.

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Absence of special envoy seen as Islamabad’s ‘reluctance’ to engage with IEA

The Pakistani government removed Durrani amid tensions with Kabul. No official explanation was provided.

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Questions have been raised over Pakistan’s failure to appoint a new special envoy for Afghanistan after Asif Durrani, a retired diplomat, was removed from the post almost six weeks ago.

Sources familiar with the issue told Pakistan’s Express Tribune that Islamabad’s reluctance to appoint a new envoy “reflects Pakistan's strategy to avoid extensive engagement with the Taliban (Islamic Emirate) government due to its ongoing support for the banned TTP (Tehreek-e-Taliban Pakistan)”.

The Tribune reported that the government's hesitation stems from the ineffectiveness of the role, given the minimal diplomatic engagement between Pakistan and Afghanistan, adding that “officials at the Foreign Office believe they can manage Afghan affairs without needing a retired diplomat in the position”.

Regional countries and other stakeholders have typically appointed special representatives to address concerns and coordinate with international partners over issues relating to Afghanistan.

However, on September 10, the Pakistani government removed Durrani amid tensions with Kabul. No official explanation was provided.

The Tribune reports however, that tensions are running high, with Pakistan continuing to accuse the Islamic Emirate of not taking steps against the TTP in Afghanistan.

The Islamic Emirate meanwhile has repeatedly denied providing sanctuary to the militant group and has also urged Pakistan on numerous occasions to find a political settlement to the problem.

Pakistan, initially, did talk to the TTP at the request of the Islamic Emirate, but the talks soon collapsed and Pakistan saw an uptick in TTP attacks.

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