In response to a request by the US House Foreign Affairs Committee for information on the oversight and management of the Afghan Fund, which holds $3.5 billion of Afghanistan’s frozen funds, the US Special Inspector General for Afghanistan Reconstruction (SIGAR) said there are currently no specific controls in place to ensure funds are not diverted to or misused by the Islamic Emirate.

SIGAR chief John F. Sopko stated that as of September last year, the Fund had made no disbursements for activities intended to benefit the Afghan people. The US “Treasury and State are not currently willing to support a return of funds to DAB (Afghanistan’s central bank),” Sopko’s report read.

SIGAR also stated “the Taliban (IEA) are not part of the Afghan Fund, and robust safeguards have been put in place to prevent [Fund monies] from being used for illicit activity.”

However, the report stated that “the fund’s articles of association do not explicitly refer to the Taliban, and there are currently no specific controls in place to ensure funds are not diverted to or misused by the Taliban.”

SIGAR also stated that the US Treasury has reported that “a compliance program to prevent funds from being provided to sanctioned or criminal individuals, including members of the Taliban, was under development.”

The report also stated that neither the US Treasury nor State Department was currently “willing to support a return of funds to DAB.”

The report however pointed out that one of the Fund’s trustees is also a member of DAB’s governing body, the Supreme Council. “It is not clear whether this constitutes a conflict of interest in the form of competing fiduciary responsibilities. It is also unclear who determines whether a conflict of interest exists or how it is defined,” read the report.

In addition, Sopko reported that the “State was unaware that one of the individuals it selected to be a fiduciary of DAB’s assets was fired from a previous position for misrepresenting his credentials, raising questions about the adequacy of State’s vetting process through which this individual became a co-fiduciary of $3.5 billion of DAB assets.”

The Afghan Fund is a Swiss-based foundation capitalized with $3.5 billion of the approximately $7 billion of Afghan central bank assets deposited in US financial institutions after the former Afghan government collapsed in August 2021.

The Islamic Emirate has repeatedly asked the international community to unfreeze Afghanistan’s foreign exchange reserves.