SIGAR

ECONOMIC AND SOCIAL DEVELOPMENT
November 2014 and the Supreme Court’s final judgment in December 2014
make enforcement problematic. Much of the property and assets purchased
with the stolen Kabul Bank funds are located in the United Arab Emirates
(UAE), but the Dubai courts view the language—particularly regarding the
identification and seizure of properties and assets—as “conditional” and
lacking “legal certainty or legitimacy.” A KBR representative said the entire
judgment/decision is not legally enforceable in Afghanistan either. It is
therefore unclear how the Afghan government should address violations. 631
“Sincere efforts to recover funds continue to be impeded by intimidation
of those attempting to do their jobs,” according to a U.S. Institute of
Peace report. 632 In at least one instance this quarter, debt-collection efforts
were directly hindered. According to DOJ, the Kabul Bank Court of First
Instance, created to address the cases of individuals involved in the scandal,
undermined an order of the higher court and tried to preclude attempts to
collect assets from identified companies and individuals. DOJ said this will
encourage other debtors to also try to undermine their existing judgments
by appealing their assessed liabilities to the Special Court. 633
Although President Ghani has asked SIGAR to help detect and retrieve
Kabul Bank assets in foreign countries, 634 Afghan authorities have not
pursued all options for international assistance in their Kabul Bank recovery
effort. In April 2015, DOJ received a one-page diplomatic note from
the Afghan government requesting its assistance in seizing the U.S. bank
accounts of two Afghan debtors. The accounts presumably belonged to
ex-Kabul Bank chairman Sherkhan Farnood and CEO Khalilullah Ferozi. In
its May 2015 response, DOJ noted several deficiencies in the request, along
with the corrective actions needed to move forward. As of December 2016,
the Afghan government has not responded or corrected the deficiencies. 635
Additionally, since much of the stolen money was laundered to Dubai
and subsequently invested in real estate there, the Afghan government
prepared and signed an official request to United Arab Emirate authorities
in June 2016 to “identify, locate, provide documents and records, and conduct
a search and seizure of any and all records and balances associated
with the bank accounts listed.” However, it was not delivered until August
2016. It was resubmitted in September 2016 after the UAE said it could not
read the original copy. The UAE has not responded to the request, as of
November 2016. 636
The Afghan government’s approach so far has had no apparent consequences,
even though the current basis of donor support, the Self-Reliance
through Mutual Accountability Framework (SMAF), includes a general
“zero-tolerance” corruption policy and calls for transparent and accountable
governance. 637 Meanwhile, U.S. government officials have said in
meetings with Afghan officials that the United States will hold the Kabul
government to its promises to address endemic corruption, including taking
action against those responsible for Kabul Bank’s near collapse. 638
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION