An escalating dispute between the Afghan government and the United States over customs procedures has halted the flow of U.S. military equipment across Afghanistan’s borders, forcing commanders to rely more heavily on air transport, which has dramatically increased the cost of the drawdown, according to military officials.
The Afghan government is demanding that the U.S. military pay $1,000 for each shipping container leaving the country that does not have a corresponding, validated customs form. The country’s customs agency says the American military has racked up $70 million in fines.
If left unresolved, the disagreement could inflate the price tag of the U.S. military drawdown by hundreds of millions, if not billions, of dollars because of the higher cost of shipping by air — an unwelcome expenditure at a time when the Pentagon is scrambling to cope with steep congressionally mandated budget cuts and the White House is attempting to jump-start negotiations over a long-term security cooperation deal with Kabul.
The Afghan government’s demand for payment is part of a broader dispute over Kabul’s authority to tax entities from the United States, its chief benefactor. As the war economy that for years bankrolled Afghanistan’s political elite starts to deflate, the government is increasingly insisting that U.S. defense contractors pay business taxes and fines for a range of alleged violations.
The latest fight has added a new irritant to negotiations over a bilateral security agreement that will address the possibility of a residual U.S. military force in Afghanistan after 2014, when the NATO combat mission formally concludes. Washington and Kabul remain at odds over several details of the security deal, including the types of taxes and customs fees that would be imposed on the force and its contractors.
The Special Inspector General for Afghanistan Reconstruction warned in a letter to Congress last month that Afghan ministries were seeking to collect nearly $1 billion in business taxes and fines from U.S. contractors — an effort that some American officials see as a massive shakedown in one of the world’s most corrupt countries. U.S. funds intended to rebuild Afghanistan, inspector general John. F. Sopko said in his June 28 letter to lawmakers, are increasingly being used to “pay the cost of doing business in Afghanistan.”
Afghan officials dispute the charge. They say that U.S. contractors and government officials have flouted Afghan tax and customs regulations, citing operating agreements drafted shortly after the 2001 invasion. Those agreements gave the U.S. government vast leverage and protections.
A familiar dispute
Eager to boost the country’s aid-
dependent economy, Afghan officials have spent years trying to collect more tax and customs revenue from the international community, particularly the U.S. government. They have closed the border to U.S. cargo in the past during similar spats that neither government acknowledged publicly.
For the most part, the Americans have managed to resolve those impasses without paying large fines — a position they have taken because they fear that paying up would open the door to even bigger fines.