Millions of dollars of Saudi Arabian money have flowed into Afghanistan over the past four years, the countrys intelligence officials say, with the sponsorship of terrorism its most likely use. According to members of the Afghan financial intelligence unit, FinTraca, the funds, totalling more than 920 million, enter from Pakistan, where they are converted into rupees or dollars, the favoured currency for terrorist operations. We can trace it back as far as an entry point in Waziristan, said Mohammed Mustafa Massoudi, the director-general of FinTraca in Kabul. Why would anyone want to put such money into Waziristan? Only one reason terrorism. The revelations illuminate the difficulties in dividing the Taliban from al-Qaeda influence and the continuing involvement of Saudi donors in sponsoring the insurgency. Authorities have demanded that Afghan insurgents renounce their relations with al-Qaeda as a precondition for any integration into the political process. Direct al-Qaeda involvement in southern Afghanistan is seen as minimal. Coalition intelligence officers recently told The Times that only half a dozen foreign voices had been detected among 13,000 intercepted conversations in the area in April. However, the flow of Arab funds to the Taliban poses a strategic obstacle to the counter-insurgency campaign. It also suggests that al-Qaeda in the Arabian Peninsula, the offshoot, still has a potent and far-reaching financial ability. Although Saudi Arabia the home of the bin Laden family is considered a key ally in the war against terror, a US government report last year said that private Saudi backers were the chief source of finance for the Taliban. Moreover, the influx of Saudi money is on the increase. The 920 million, or five billion Saudi riyals, monitored by FinTraca since 2006 has accelerated, peaking this year. Most of it entered Afghanistan through the Pakistani tribal area, in particular North Waziristan, which is infamous as al-Qaedas heartland. Officials would not disclose the precise route that the Saudi money takes before arriving in North Waziristan a repeated target of US drone attacks on al-Qaeda operatives and members of the Afghan Haqqani network. That is a question for Pakistan to answer, a FinTraca official said. Mr Massoudi said that the Saudi riyals were moved from Waziristan to Peshawar, capital of the North West Frontier Province, where Pakistani nationals were used to exchange the cash for local currency or dollars. Exactly what happens to this cash is unclear, given the murky nature of the transactions and the absence of controls on money leaving or entering Afghanistan. The riyals, in the hands of Pakistani money-changers, are recycled back into regular cash channels, also through Afghanistan. Pakistan has strict financial regulations so the riyals cannot simply be removed from Pakistan after theyve been exchanged, Mr Massoudi said. Kabuls international airport is where most of the riyals are declared officially, bound this time for Dubai and conversion into dollars. FinTraca was established four years ago with British and American help including input from the Serious Organised Crime Agency as a semi-autonomous institution within the Central Bank of Afghanistan. To fight money laundering and the funding of terrorism, it monitors Afghan banks and informal hawala brokers as well as working with the Afghan intelligence service, the NDS, and international organisations. Afghanistan has no foreign exchange controls and no restrictions on amounts in any denomination coming in or out, providing that it is declared. Although rules have been introduced to control the activities of hawala brokers whose services are technically illegal in Pakistan the insurgency allows them to operate without regulation in several Afghan provinces. Kabul airport, which is constantly monitored by the Afghan authorities and intelligence officials, has offered a glimpse into the countrys financial traffic. Three Chinese nationals were recently detained there after they tried to carry 810,000 (688,000) in undeclared currency out of the country in suitcases. Last year a courier was found trying to enter Afghanistan from Saudi Arabia with hundreds of thousands of dollars stashed in his luggage.(The Times)