Misunderstanding of Afghanistan sanctions crippling local businesses: Report

Lack of awareness on sanctions against Afghanistan is crippling local businesses and the country’s economy, the Norwegian Refugee Council (NRC) said in report published on Wednesday.

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Since the Taliban returned to power in 2021, governments across the world have pursued political and economic isolation policies towards Afghanistan, in reaction to the Taliban’s increasingly restrictive governance, such as banning women from working in NGOs.

But misconceptions of sanctions and over-compliance in the banking sector has led to “severe obstacles” for Afghan businesses, especially those that import and export food and other essential goods, the NRC said.

“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,” Neil Turner, NRC Country Director in Afghanistan said in a statement.

There are exemptions to the sanctions that should mean people in the country can transfer money from inside and outside of Afghanistan, so the basic economic needs of the Afghans can be met, the report said.

Instead “banks continue to restrict businesses’ access to financial services despite the exemptions in place,” the report said.

Afghan businesses told the NRC that payment instructions for any international bank transaction that mention Afghanistan get blocked, even for transactions for food shipments via the United Nations.

One European bank reportedly needed 40 to 50 staff members to facilitate one financial transaction to Afghanistan.

“Concrete steps must be agreed to address the barriers faced by critical private sector actors in Afghanistan, including challenges in accessing financial services,” Turner said.

He added: “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.

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