Misunderstanding of Afghanistan sanctions crippling local businesses: NRC report

Over-compliance and misconceptions about the scope of international sanctions have led to severe obstacles for the Afghan business community, including for businesses that import and export food and other essential goods, the Norwegian Refugee Council (NRC) said in a report released Wednesday.

The report calls on the international community to improve awareness about sanctions and reduce over-compliance. It argues that concrete steps must be taken to address the crippled Afghan economy and ongoing unprecedented humanitarian crisis.

“Humanitarian aid alone cannot meet the needs of the millions of Afghans who have lost their jobs and been forced to take on huge debts and sell their possessions just to be able to buy food needed for survival,” said Neil Turner, NRC’s country director in Afghanistan. “We must reverse this devastating economic disaster. A stable economy, thriving private sector, and the reintroduction of development programmes are important to complement the work of humanitarian organizations.”

Since the Islamic Emirate returned to power in 2021, international actors have pursued political and economic isolation policies towards Afghanistan. More than 28 million people are now on the brink of survival, according to the report.

NRC said that there are comprehensive exemptions to the sanctions that should enable the transfer of money in and out of Afghanistan for activities designed to address the basic needs of the population, but banks continue to restrict businesses’ access to financial services despite the exemptions in place. Afghan businesses highlighted that payment instructions for any international bank transaction that mention Afghanistan get blocked, even for transactions for food shipments via the United Nations.

“We need to educate overseas companies and banks that Afghanistan itself is not under sanctions. There is a real lack of understanding about this – particularly among key sectors in our main export and import markets,” said an executive of a large agricultural firm in Afghanistan.

To address the complex political, economic, and social changes since IEA’s return to power, NRC called on major governments, financial institutions, UN agencies and relevant regional actors to urgently convene to establish measures to stabilize and support Afghanistan’s economy for the benefit of all the Afghan people.

“Concrete steps must be agreed to address the barriers faced by critical private sector actors in Afghanistan, including challenges in accessing financial services. On top of this, it’s vital that mechanisms are stepped-up to provide technical assistance to the Afghanistan Central Bank to support its resumption of core functions that are critical to support the Afghan economy, private sector actors, and ultimately the Afghan people who have already endured so much,” added Turner.