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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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‘Media freedom is increasingly restricted’ in Afghanistan: Gagnon

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Georgette Gagnon, Deputy Secretary-General’s Special Representative for Afghanistan, stated in her latest report to the UN Security Council that Media freedom in Afghanistan has become increasingly restricted.

In her report, released on the occasion of International Human Rights Day, Gagnon said: “Media freedom is increasingly restricted. Journalists face intimidation, detention, and censorship, reducing the space for public debate and public participation with people excluded from decisions on their own future.”

According to Gagnon’s report, the people of Afghanistan continue to face multiple crises, and their situation requires urgent attention and broader support from the international community.

She added: “Women and girls continue to be systematically excluded from almost all aspects of public life. The ban on secondary and tertiary education for girls persists now into its fourth year, depriving Afghanistan of female doctors, entrepreneurs, teachers, and leaders critical to the country today and for its future.”

Meanwhile, the Islamic Emirate has repeatedly emphasized that media in the country can operate freely according to Islamic principles and national interests, and that citizens’ rights, especially those of women are safeguarded within the framework of religion.

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Bertrand assures Muttaqi of continuation of EU assistance to Afghanistan

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The Ministry of Foreign Affairs of the Islamic Emirate said in a statement on Wednesday that Gilles Bertrand, the newly appointed EU Special Envoy for Afghanistan, has assured the IEA of the continuation of EU assistance to the country.

Bertrand made these remarks during a meeting with Amir Khan Muttaqi, the Minister of Foreign Affairs.

Bertrand has praised the Islamic Emirate for their four-year achievements in areas of stability, security and economy, assuring continued EU assistance and calling for expanded cooperation to attract major foreign investment to the country.

The statement added that Bertrand praised the IEA as well for accommodating millions of returning Afghan migrants.

He also noted the EU’s increased attention and cooperation in the economic sector, particularly regarding Afghanistan’s private sector and called for further collaboration between the two sides to attract investment from major international companies.

During the meeting, Muttaqi expressed appreciation for the work of the EU’s previous envoy for Afghanistan within the framework of humanitarian cooperation.

Muttaqi also highlighted major projects launched by the Islamic Emirate of Afghanistan over the past four years and called on the European Union to take positive steps toward Afghanistan’s development in various areas.

In conclusion, both sides emphasized the continuation of cooperation and such meetings.

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Regional powers intensify mediation as Kabul–Islamabad tensions escalate

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Tensions between Kabul and Islamabad continue to rise, prompting renewed concern among regional stakeholders and pushing mediation efforts into a critical phase.

With relations worsening and no signs of a breakthrough, diplomatic actors are ramping up attempts to steer both sides toward dialogue and de-escalation.

Diplomatic sources say political engagement remains the only viable path to resolving the current standoff. Qatar, Türkiye, Iran, and China have all stepped in to facilitate communication, each seeking to create conditions that could pave the way for direct talks between the Islamic Emirate and Pakistan.

Iran is reportedly working to convene a dedicated regional meeting focused on jump-starting dialogue — an initiative that follows earlier mediation efforts by Qatar and Türkiye, both of which are currently on hold. China has also reiterated its support for negotiations, stating that Beijing stands ready to help ease tensions and strengthen bilateral ties.

Meanwhile, Saudi Arabia is expected to host a fresh round of talks between Kabul and Islamabad in the coming weeks. Riyadh previously facilitated discussions between delegations from both countries, though those meetings ended without tangible progress.

Analysts caution that regional diplomacy, however active, can only succeed if both Kabul and Islamabad demonstrate the political will to resolve their disputes. Effective mediation, they say, could restore stability to one of South and Central Asia’s most strained bilateral relationships — but the window for a peaceful settlement may be narrowing.

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