President Joe Biden on Friday was expected to issue an executive order that would move $7 billion of the Afghan Central Bank’s assets frozen in the US banking system, according to an American official familiar with the decision.
This money will be used to fund humanitarian relief in Afghanistan and compensate victims of the 9/11 attacks, the official told AP.
The order will require US financial institutions to allow access to $3.5bn of assets for the Afghan relief and basic needs. The other $3.5bn would remain in the US and be used to fund ongoing litigation by US victims of terrorism, the official said.
Mr Biden’s expected announcement pre-empts a deadline for the US Justice Department, which has until Friday to submit an opinion detailing what it considers to be the national security interests of the US in handling the frozen reserves. A federal judge last year extended the department’s deadline to until January 28 to give the Biden administration time to sort through the complex legal and geopolitical issues at play.
Handing the reserves to the Taliban could be interpreted as a US recognition of their rule, while continuing to withhold them could further exacerbate the economic and humanitarian crises in the country. International funding to Afghanistan was suspended and billions of dollars of the country’s assets abroad, mostly in the US, were frozen after the Taliban took control of the country in mid-August.
The country’s troubled economy has been in a tailspin since the Taliban takeover. Nearly 80 per cent of Afghanistan’s previous government’s budget came from the international community. That money, now cut off, financed hospitals, schools, factories and government ministries. Desperation for basic necessities has been further exacerbated by the Covid-19 pandemic, healthcare shortages, drought and malnutrition.
The official noted that US courts where 9/11 victims have filed claims against the Taliban will also have to take action for the victims to be compensated. The executive order is expected to be signed by Mr Biden on Friday. The New York Times first reported on the coming order.
The Taliban have called on the international community to release funds and help stave off a humanitarian disaster. Afghanistan has more than $9bn in reserves — including the $7bn in the US. The Taliban are certain to oppose the split. In January, the group managed to pay salaries of its ministries but was struggling to keep employees at work.
They have promised to open schools for girls after the Afghan new year at the end of March, but humanitarian organisations say money is needed to pay teachers. Universities for women have reopened in several provinces, with the Taliban saying the staggered opening of all universities will be completed by the end of February.