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Watchdog: Follow the Money

Corruption, kidnappings hurt $200m U.S. effort to help Afghanistan collect customs revenue

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Watchdog,Michal Conger,Afghanistan,Foreign Aid,USAID,Inspectors General,Accountability,Follow the Money,SIGAR

Nearly $200 million in U.S. tax dollars and five years of effort to fight corruption in Afghanistan's customs system may be "irrevocably lost" when the U.S. leaves the country, according to a new report by an internal government watchdog.

Afghanistan relies heavily on customs revenue, which makes up almost half of its annual $2 billion domestic revenue.

But customs revenue could double if corruption were eliminated, according to the Special Inspector General for Afghanistan Reconstruction.

"Corruption is the biggest factor that could undermine the success of U.S. efforts to develop the capacity of the Afghan government to assess and collect customs revenues," the SIGAR report said. The report was released Tuesday.

The country also loses an estimated $60 million each year to commercial smuggling, the report said.

Afghanistan needs all the money it can get as international donors wind down their assistance. Its annual domestic revenue doesn't cover the cost of maintaining the Afghan National Security Force, which costs about $4.1 billion each year. Without international help, the country can't even pay its bills.

The U.S. Agency for International Development and Customs and Border Protection have spent at least $198 million on strengthening the customs process since 2009.

Those expenditures covered everything from implementing an electronic payment system to training customs officers.

But as U.S. presence in Afghanistan dwindles and USAID and CBP employees leave, there's little guarantee any of it will leave a lasting impact, according to SIGAR.

"While the amount of corruption was somewhat lowered by the presence of U.S. personnel working at the border and mentoring directly with [Afghan Customs Department] personnel, it may rise as U.S. forces withdraw from the country and financial assistance decreases in the near future. Gains made over the past few years may be irrevocably lost," the report said.

Corruption is a cultural problem that can't be eliminated simply by stronger controls, according to SIGAR. U.S. officials told inspectors that eradicating corruption could take a generation.

Even where U.S. training has helped strengthen the system and reduce corruption among officers and officials, Afghan officers who properly collect revenue are kidnapped and intimidated.

Cultural problems in ACD extend beyond corruption, too. Some U.S. reforms that have helped collect more money or keep officers safe, like the electronic payment system designed to keep employees from traveling long distances with large amounts of cash, may be abandoned because they're costly or take more work to maintain.

"USAID and [Trade Accession and Facilitation for Afghanistan] officials told us that without continued international support and assistance, programs such as the electronic payment system are unlikely to move forward," the report said.

"CBP, USAID, and TAFA program officials all noted that without U.S. pressure, decisions to reform processes within the ACD are often delayed or halted due to cultural and institutional roadblocks within the Afghan government," the report said.

There's little the U.S. can do to address that problem. U.S. officials helping with the USAID and CBP programs are withdrawing along with the troops, leaving about one third of the current program officials in the country.

"Regardless of the amount of funds expended or the number of programs and initiatives implemented, revenue collection at Afghanistan’s borders will continue to be subject to graft and pilferage unless the government is fully committed to anti-corruption measures," SIGAR said.

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