SIGAR

ECONOMIC AND SOCIAL DEVELOPMENT
• The “agreed loans against collateral” merely represents an agreement by
an identified group of debtors to repay their loans. Actual repayments
have been limited and many have not kept to the agreed-upon
schedule. Of the 34 signed repayment agreements, only $13.3 million of
$45.6 million has been repaid; $32.3 million remains outstanding.
• “Interest waived” by the previous and current governments
($112.3 million collectively) represent accounted-for losses, not
recoveries. Waivers were given as incentive to enter repayment
agreements.
• The $47 million in total “assets in the United Arab Emirates” were only
identified, not recovered. The Dubai courts deem Afghanistan’s court
decisions on the Kabul Bank case to have no legal merit. 643
No money has been recovered this quarter from convicted ex-Kabul
Bank chairman Sherkhan Farnood and CEO Khalilullah Ferozi. Their assets
are hidden under other people’s names, according to the DOJ. This follows
a pattern of the Afghan government’s being unable to compel full repayment
from the main architects of the fraud, both of whom are in jail, as of
December 2016. According to the KBR, Farnood still owes $336.2 million;
Ferozi owes $175.9 million. Both amounts include principle and interest. 644
The KBR found an increasing number of debtors defaulting on their
required payments in 2016, with collections declining significantly. 645 The
IMF recently reported that the collections process was “losing steam”
with diminishing chances of success for claims against assets located in
foreign jurisdictions. 646 In December 2016, the KBR reported that 10 major
debtors with combined debts of almost $7.9 million have defaulted on their
repayment plans. Four minor debtors owing $182,142 combined have also
defaulted. The cases of these 14 debtors have been referred to the AGO, but
again, no action has been taken. 647
OTA Funding: USAID provided $2 million
in April 2016 to support OTA assistance
in budget, banking, and revenue through
September 30, 2019. State provided
$178,437 in September 2016 to help combat
economic crimes through May 30, 2017.
Source: Treasury, response to SIGAR data call, 12/30/2016.
U.S. Treasury Assistance
The U.S. Treasury’s Office of Technical Assistance (OTA) continued implementing
its March 2015 agreement with Afghanistan’s Ministry of Finance
(MOF) to develop technical-assistance and capacity-building programs. 648
OTA assistance is focusing on: 649
• Budgeting: developing baseline budgets and out-year estimates,
and reviewing fiscal performance-management-improvement plans.
In November, OTA completed an in-depth peer review of the MOF’s
biannual fiscal performance- and management-improvement plans. As
a result, OTA has been asked to organize a meeting with key donors to
present its findings and encourage similarly constructive feedback to
the MOF’s public financial-management team. There was no technical
assistance in developing baseline budgets and forward estimates this
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION