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Updated Saturday, December 15, 2012 at 10:46 PM

As gold is spirited out of Afghanistan, officials wonder why

By MATTHEW ROSENBERG
The New York Times

KABUL, Afghanistan — Packed into hand luggage and tucked into jacket pockets, roughly hewed bars of gold are being flown out of Kabul with increasing regularity, confounding Afghan and U.S. officials who fear money launderers have found a new way to spirit funds from the country.

Most of the gold is being carried on commercial flights destined for Dubai, United Arab Emirates, according to airport-security reports and officials. The amounts carried by single couriers are often heavy enough that passengers flying from Kabul to the Persian Gulf emirate would be well advised to heed warnings about the danger of bags falling from overhead compartments.

One courier, for instance, carried nearly 60 pounds of gold bars, each about the size of an iPhone, aboard a flight in mid-October, according to an airport-security report. The load was worth more than $1.5 million.

The gold is fully declared and legal to fly. Some, if not most, is legitimately being sent by gold dealers seeking to have old and damaged jewelry refashioned into new pieces by skilled craftsmen in the Persian Gulf, said Afghan officials and gold dealers.

But gold dealers in Kabul and current and former Kabul airport officials say there has been a surge in shipments since early summer. The talk of a growing exodus of gold from Afghanistan has been spreading among the business community in Kabul, and in recent weeks has caught the attention of Afghan and U.S. officials.

The officials are puzzling over the origin of the gold — very little is mined in Afghanistan — and why so much appears to be heading for Dubai.

"We are investigating it, and if we find this is a way of laundering money, we will intervene," said Noorullah Delawari, governor of Afghanistan's central bank.

Finances hard to track

Figuring out what is happening in the Afghan economy remains as difficult as ever. Nearly 90 percent of the financial activity takes place outside formal banks. Written contracts are the exception, receipts are rare and statistics are often unreliable. Money laundering is commonplace, Western and Afghan officials say.

As a result, with the gold, "Right now you're stuck in that situation we usually are: Is there something bad going on here or is this just the Afghan way of commerce?" said a senior U.S. official who tracks illicit financial networks.

There is reason to be suspicious: The gold shipments track with the far larger problem of cash smuggling. For years, flights have left Kabul almost every day carrying thick wads of bank notes — dollars, euros, Norwegian kroners, Saudi Arabian riyals and other currencies — stuffed into suitcases, packed into boxes and shrink-wrapped onto pallets.

Last year alone, Afghanistan's central bank says, roughly $4.5 billion in cash was spirited out through the airport. Efforts to stem the flow have had limited impact, and concerns about money laundering persist, according to a report released last week by the U.S. Special Inspector General for Afghanistan Reconstruction.

The unimpeded "bulk cash flows raise the risk of money laundering and bulk-cash smuggling — tools often used to finance terrorist, narcotics and other illicit operations," the report said.

Dubai: a hiding spot

The cash and now the gold are most often taken to Dubai, where officials are known for asking few questions. Many wealthy Afghans park their money and families in the emirate, and gold dealers say more middle-class Afghans are sending money and gold — seen as a safeguard against economic ruin — to Dubai as talk of a postwar-economic collapse persists.

But given Dubai's reputation as a haven for laundered money, an Afghan official said the "obvious suspicion" is that at least some of the apparent growth in gold shipments to Dubai is tied to the myriad illicit activities that have come to define Afghanistan's economy.

There are also indications that Iran could be dipping into the Afghan gold trade. It is already buying up dollars and euros to circumvent U.S. and European sanctions, and it may be using gold for the same purpose.

Before officials can say whether the gold shipments are part of an illicit financial scheme, they first have to figure out how much gold is going out — or coming in.

It is a task easier said than done. The Finance Ministry, which is supposed to collect taxes on each shipment, did not have figures, said Wahidullah Tawhidi, a spokesman for the ministry. He suggested the Commerce Ministry would know. The Commerce Ministry did not, and officials there said to contact airport customs officials.

At the airport, a reluctant customs official, who spoke on condition of anonymity, brushed aside concerns of uptick in gold shipments out of Afghanistan.

He ended the conversation with the cryptic promise to one day share "the real story of what is happening to the gold."


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