Thursday, March 23, 2023

Afghan Trust Funds in Swiss Makes $8.5M in Interest: Reports

Immigration News

Arif Ahmadi
Arif Ahmadihttps://www.khaama.com/
Arif Ahmadi holds a B.A. degree in Journalism. He works as an Editor & Content Writer for Khaama Press.
A former member of the Afghan Central Bank’s supreme council Shah Mehrabi. (Photo: social media)

KABUL, Afghanistan – A former member of the Afghan Central Bank’s supreme council Shah Mehrabi said that the $3.5 billion in Afghan assets transferred to the Bank for International Settlements has made $8.5 million in interest, according to sources.

It came at a time the Taliban’s foreign affairs ministry in September condemned the United States’ decision to transfer Afghan central bank reserves into a Swiss-based trust, saying it was against international norms.

Mehrabi, who is also a member of the trust fund, said the decision regarding disbursement of the funds has not yet been made by the officials. 

“Since November 2022, when the reserves were transferred to the BIS (Bank for International Settlements), $8.5 million in interest has been earned, Mehrabi said, as TOLOnews quoted. “The decision regarding disbursement of fund has not been made.”

According to Mehrabi, Afghanistan’s reserves of $3.5 billion – including the roughly $36 million in interest – was transferred to BIS on November 7, 2022, where the revenue was earned prior to the transfer to the international settlement. 

Local economist encourage transparency and proper management of the funds, saying standard reports should be developed every year to monitor and control the budget.

“They (BIS officials) should provide their reports quarterly about the interest of the Afghanistan’s assets,” said Seyar Qureshi, an economist. 

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Meanwhile, the Ministry of Economy said the Afghan assets should be transferred to the caretaker government in Afghanistan.

“The Afghan assets and the interest earned from the $3.5 billion should be given to the Islamic Emirate,” said Abdul Latif Nazari, deputy Minister of Economy, as local media quoted.

The US in cooperation with the Swiss authorities have established a trust fund for the $3.5 billion Afghan assets, which is half of the $7 billion in reserve of the New York Banks.

The board of trusties include two Afghans: Shah Mahmood Mehrabi, who is also a member of Da Afghanistan Bank’s supreme council; and former Minister of Finance, Anwar ul-haq Ahady, as well two representatives from the US and Swiss.

In September, the Biden administration moved to establish a foundation for managing $3.5 billion in frozen Afghan funds, skirting Taliban in their efforts to having hands on what is known to be the last shot to stabilize country’s economy.  

The U.S. decision “to transfer a part of the reserves of the Central Bank of Afghanistan to Switzerland and use it for targeted disbursement without any input by Afghanistan as unacceptable and a violation of international norms,” spokesperson Abdul Qahar Balkhi said in a statement, as Reuters quoted.

“If the reserves are disbursed without taking into consideration legitimate demands of the Afghans, the Islamic Emirate will be forced to impose fines against, and ban activities of, all individuals, institutions and companies that facilitate this illegal venture and seek to misuse central bank reserves for humanitarian and other purposes,” he said.

Though U.S. officials have had talks for months with Taliban and Afghan central bank officials, Washington has said no money would go to the bank until it is “free of political interference”.

Now, with several international partners, the US government announced the creation of a foundation based in Switzerland that will use the money help address the unfolding economic and humanitarian crisis in Afghanistan.

“Pursuant to Executive Order (E.O.) 14064, President Biden set a policy of enabling $3.5 billion of Afghan central bank reserves to be used for the benefit of the people of Afghanistan while keeping them out of the hands of the Taliban and other malign actors,” said US Treasury department in statement.

“The Afghan Fund will protect, preserve, and make targeted disbursements of that $3.5 billion to help provide greater stability to the Afghan economy,” the statement further said.  

But the Afghan Ministry of Economy asked the US government to hand over the frozen assets of Afghanistan to the Da Afghanistan Bank (Central Bank). This way, they will be able to prioritize best for what is needed in the country.

“No one has the right to place conditions on how and by whom these funds should be used,” said Abdul Latif Nazari, deputy of the ministry, as local media quoted.

Da Afghanistan Bank (also known as the Afghan central bank) funds have been frozen in thirteen banks and eight countries since the collapse of former government, paralyzing its operations that regulate all banking and money handling in Afghanistan. 

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