Up to 5 billion U.S. dollars were smuggled last year alone into Iran from Afghanistan where an annual influx of American taxpayer funds is helping the Islamic Republic weather the storm from the historic wave of crippling United States sanctions, the Afghanistan Times (AT) reported Monday, echoing other local news outlets.
U.S. sanctions are designed to shut Iran out of the global banking system, making it difficult for the Islamic Republic to obtain the American dollars required for international transactions.
The Afghanistan Times noted on Monday:
A reliable source revealed that some four to five billion dollars were smuggled to Iran from Afghanistan through official channels in 2018.
The amounts were smuggled through borders in western Herat province. The source added the local officials were aware of the smuggling.
The western borders have been the channels for drug smuggling and human trafficking, but now dollar finds its way to Iran.
In an interview with the Afghanistan Times, Anwar Shah Yousufi, the head of Western Zone Banks, accused border customs officials of turning a blind eye to cash trafficking into Iran.
Amid the unprecedented wave of crippling U.S. sanctions, Iran has become increasingly desperate for dollars. Neighboring Afghanistan, with lax regulations on what the U.S. State Department describes as a “partially dollarized” economy and a porous border with Iran, is an “obvious source,” Reuters noted at the end of June 2018.
To get its hands on much-needed U.S. dollars, Iran is now relying on human and drug traffickers eager to participate in the reportedly lucrative cash smuggling activities.
The bordering regions between Afghanistan and Iran [have] long been used for the smuggling of human and drugs but the smugglers have also resorted to smuggling of Dollars during the recent years.
“A person said that he had carried 30,000 USD to Iran and had profited 100 to 150 USD,” the Afghanistan Times added.
The Afghanistan Times learned from a money exchanger in Herat that smugglers traffic the American dollar into Iran through air and land corridors.
In June 2018, Reuters identified Herat province as one of the top areas of illegal cross-border activity involving the uncontrolled flows of dollars out of Afghanistan.
Afghan smugglers are injecting millions of U.S. dollars into the Iranian economy each day, a move that allows Tehran to circumvent American President Donald Trump’s sanctions.
Citing the Federation of Money Changers of Herat, Reuters reported at the end of June 2018 that as much as $2 million to $3 million are smuggled daily into the Islamic Republic from the three Afghan provinces that sit alongside the Iranian border — Herat, Farah, and Nimruz.
“Every day, as much as 2 million USD [is] smuggled to Iran,” the unnamed money exchanger told the Afghanistan Times, echoing the federation.
Afghanistan is one of the top recipients of U.S. foreign aid.
The United States, which has devoted nearly $1 trillion to the war in Afghanistan since it broke out in October 2001, is the largest source of funding to Afghan government operations, according to the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR), a congressionally created watchdog agency.
The U.S.-funded nation-building efforts alone have reached $133 billion since 2001.
Afghanistan has reportedly banned the transportation of more than 10,000 U.S. dollars in cash without proper trade documents.
Citing a new regulation by Afghanistan’s Central Bank, the Afghanistan Times pointed out, “Individuals do not need permission to carry up to 10,000 USD outside of the country.”
Iran is no stranger to finding ways to keep the flow of American dollars coming into the Islamic Republic amid U.S. sanctions.
In April 2018, SIGAR found that the American military in Afghanistan was unwittingly purchasing fuel for the Afghan security forces from Iran in violation of United States sanctions.
Corruption throughout the Afghan fuel industry and the country more broadly may even benefit the Taliban and other insurgent or terrorist organizations by supplying funds and fuel to those organizations.
Since 2008 alone, the Pentagon has spent at least $16 billion on fuel for the Afghan security forces and U.S. military operations.
Cash smuggling from Afghanistan into Iran has hurt the Afghan economy, leading to a drop of the Afghani value against the U.S. dollar, the Afghanistan Times determined.