KABUL: Millions of dollars of Saudi Arabian money have flowed into Afghanistan over the past four years, the country's intelligence officials say, and the sponsorship of terrorism is its most likely use.
According to members of Afghanistan's financial intelligence unit FinTraca, the funds, totalling more than pound stg. 920 million ($1.5 billion), enter from Pakistan where they are converted into rupees or dollars, the favoured currency for terrorist operations.
"We can trace it back as far as an entry point in Waziristan," said Mohammed Mustafa Massoudi, FinTraca's director-general in Kabul. "Why would anyone want to put such money into Waziristan? Only one reason – terrorism."
The revelations illuminate the difficulties in dividing the Taliban from al-Qa'ida influence and the involvement of Saudi donors in sponsoring the insurgency. The continued flow of Arab funds to the Taliban poses a strategic obstacle to the counter-insurgency campaign.
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Although Saudi Arabia – the home of the bin Laden family – is considered a key ally in the war on terror, a US government report last year said that private Saudi backers were the chief source of finance for the Taliban.
Moreover, the influx of Saudi money is on the increase. The pound stg. 920m, or five billion Saudi riyals, monitored by FinTraca since 2006 has accelerated, peaking this year. Most of it entered Afghanistan through the Pakistani tribal area, in particular North Waziristan, which is infamous as al-Qa'ida's heartland.
Officials would not disclose the precise route the Saudi money takes before arriving in North Waziristan.
Mr Massoudi said the Saudi riyals were moved from Waziristan to Peshawar, capital of the Northwest Frontier Province, where Pakistani nationals were used to exchange the cash for local currency or dollars. Exactly what happens to this cash is unclear, given the murky nature of the transactions and the absence of controls on money leaving or entering Afghanistan. The riyals, in the hands of Pakistani money-changers, are recycled back into regular cash channels, also through Afghanistan.
"Pakistan has strict financial regulations so the riyals cannot simply be removed from Pakistan after they've been exchanged," Mr Massoudi said.
FinTraca was established four years ago with British and US help as a semi-autonomous institution within the Central Bank of Afghanistan. To fight money-laundering and the funding of terrorism, it monitors Afghan banks and informal brokers as well as working with the Afghan intelligence service, the NDS and international organisations.