Norway unfreezes aid to Afghanistan fund

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09:20 CEST+02:00
Norway on Thursday said it would restart contributions to the Afghanistan Reconstruction Trust Fund (ARTF), nearly two months after it announced a freeze on aid over corruption.

The country will give up to 280 million kroner ($51.6 million) in aid to ARTF this year, the foreign ministry said in a statement.

Like other contributors to the fund, Oslo on September 6th said it would withhold payments until the International Monetary Fund (IMF) and Afghan authorities reached an agreement resolving the crisis plaguing Kabul Bank.

Afghanistan's biggest private bank had been engulfed by a corruption scandal after its management embezzled funds, putting the bank on the verge of bankruptcy.

Several bank executives, including Mahmood Karzai, the brother of Afghanistan's President Hamid Karzai, have been accused of taking out large loans that were never repaid, totalling some $900 million, sources close to the case have said.

Norway's foreign ministry however said on Thursday that Afghan authorities had satisfied several of the demands from donors, and especially the IMF, which had asked for the bank to be recapitalised.

Other demands included legal proceedings against those involved in corruption, that the embezzled money be returned and that an audit be carried out at another bank where irregularities may have occurred.

"Norway will also going forward consider blocking funds if similar situations arise," deputy foreign minister Espen Barth Eide said in a statement.

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"We cannot accept corruption nor irregularities without reacting," he said.

Afghanistan is the world's third most corrupt country, according to a 2010 report by the watchdog group Transparency International.

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