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Bloomberg
President Joe Biden was to issue an executive order to transfer shift the $7 billion in Afghan central bank assets frozen in the US so it can be used to compensate victims of the Sepember 11 terrorist attacks and support aid efforts in Afghanistan, a person familiar with the matter said.
The order will direct US financial institutions to move Afghan central bank funds into a consolidated account held at the Federal Reserve Bank of New York, with the US seeking to tap $3.5 billion for assistance to the Afghan people, said the person, who spoke on condition of anonymity.
The other $3.5 billion would remain in the US, pending ongoing litigation brought by the victims of the Sept. 11 attacks.
The move is aimed at freeing up financial support to meet the needs of the Afghan people without providing the Taliban access to the assets, the person said. Taliban officials had sought access to the funds after seizing control of Afghanistan last year, but existing counterterrorism sanctions make financial transactions with the political movement illegal.
Earlier this month, the Treasury Department said that international banks were allowed to transfer money to Afghanistan for humanitarian purposes, despite those sanctions. The US also detailed how nongovernmental organizations could pay teachers or healthcare workers employed by the Afghanistan government without violating the law.
In the wake of its withdrawal from Afghanistan in August, the U.S. has been working with the United Nations to ensure aid groups have the necessary liquidity to provide humanitarian assistance to the Afghan people.
Late last month, United Nations Secretary-General Antonio Guterres said the nation was “hanging by a thread†and called on countries to suspend rules blocking aid operations.
“We need to give financial institutions and commercial partners legal assurance that they can work with humanitarian operators without fear of breaching sanctions,†Guterres told the U.N. Security Council.
The US in August froze nearly $9.5 billion in assets belonging to the Afghan central bank and stopped shipments of cash to the nation. Besides the just over $7 billion in reserves held in the United States, the rest are largely in the UK, Germany, Switzerland, the person said. Friday’s announcement comes after months of deliberation within the administration, as officials weighed various legal options and political concerns. In addition to the litigation from Sept. 11 victims, the move from the Biden administration risks discouraging other governments from storing their money in the US for fear their assets also could be seized.
Ultimately, Biden may utilize a provision of the International Emergency Economic Powers Act to “direct and compel†that the foreign assets are moved to a segregated account, according to the New York Times, which first reported the decision.
Officials alternatively have also discussed using a provision of the Federal Reserve Act that allows the disposal of property belonging to the central bank of a foreign nation if an “accredited representative†of that government approves. Under that scenario, the US would likely seek permission from a representative of the prior government of Afghanistan.