KABUL, Afghanistan – United States President Joe Biden’s administration will press ahead with talks on releasing billions of dollars in Afghanistan’s foreign-held assets, according to sources, after continued pressures by the international community.
The decision to pursue the initiative to help stabilize Afghanistan’s collapsed economy underscores growing concern in Washington over a humanitarian crisis, as the United Nations warns that nearly half the country’s 40 million people face “acute hunger”.
At the core of the US-led effort, as Reuters reported last month, is a plan to transfer billions in foreign-held Afghan central bank assets into a proposed Swiss-based trust fund. Disbursements would be made with the help of an international board and bypass the Taliban, many of whose leaders are under US and UN sanctions.
Earlier this month the US State Department and Treasury officials they will pursue the talks despite frustration with the pace, saying US government is committed to setting up the international trust fund and it is “working with the same speed and alacrity”.
Afghanistan’s economic and humanitarian crises deepened when Washington and other donors halted aid that funded 70% of the government budget following the Taliban’s seizure of Kabul on Aug. 15, 2021, as the last U.S.-led foreign troops departed after 20 years of war, as Reuters reported.
Washington also stopped flying in hard currency, effectively paralyzing Afghanistan’s banking system, and froze $7 billion in Afghan assets in the US Federal Reserve Bank of New York. In February, Biden ordered half the sum set aside “for the benefit of the Afghan people.”
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Last week, at least 77 family members of victims of 9/11 in a letter to United States President Joe Biden wrote “the Afghanistan central bank funds currently being kept in New York belong to the Afghan people,” arguing the pending court’s decision is “morally wrong” if decided otherwise.
The letter wrote that any use of the $7 billion to pay off 9/11 family member judgments is “legally suspect” and “morally wrong.”
“We ask you to use your executive power to modify your recent order and commit to the only legally and morally correct approach – affirming that all $7 billion of the Afghan central bank funds being kept in New York belong to the Afghan people,” the letter reads, as TOLOnews quoted.
The US State Department spokesman Ned Price at a recent press conference said that $3.5 billion in Afghan central bank reserves were preserved for the benefit of the Afghan people, seeking a mechanism that will ensure transparency throughout the process.
“What we are focused on right now are the ongoing efforts to enable those funds, the $3.5 billion in licensed Afghan central bank reserves, to be used for the benefit of the Afghan people,” Price told the press conference.
“And we’re seeking to find the best mechanism to ensure that those funds can go to the Afghan people in a way that doesn’t risk their diversion from the Taliban or other forces, including to potentially terrorist groups or terrorist actors.”
In February, President Biden signed an executive order to free $7 billion in Afghan assets now frozen in the US, splitting the money between humanitarian aid for poverty-stricken Afghanistan and a fund for families of 9/11 victims still seeking relief for the attacks that killed thousands.
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.