Biden freezes $7 billion of Afghan funds

Half of the funds will be available to the Sept. 11 families who sued the Taliban, and the rest will go to Afghan humanitarian aid.

Biden freezes $7 billion of Afghan funds

WASHINGTON -- Friday's executive order by President Joe Biden froze $7 billion of Afghan funds. The money will be used to provide humanitarian assistance to the Afghan people as well as potential legal payouts for victims of the Sept. 11, 2001 attacks.

According to the administration, the decision was the first in a long legal process to establish a trust fund and transfer money from the Afghan central banks to the Federal Reserve Bank of New York. The courts will approve transfer of funds. Half of the funds will be available to families of Sept. 11, who are pursuing legal claims against Taliban, and the rest will go to humanitarian aid for Afghans.


 

Biden will use his International Emergency Economic Powers Act power to freeze foreign assets in a highly unusual move. According to the official, the money was mainly derived from international assistance that had been given over the years to Afghanistan and was being held by the Afghan government in America before the Taliban took control of the country in august.

A senior administration official stated that $7 billion in assets are held by a country which is not recognized as a sovereign nation. "I believe we are doing our best to make sure that some of that money is used for the benefit of the citizens of the country."

Families of victims of terror attacks and Sept. 11 have sued Taliban in federal court. They are now seeking the funds in the U.S. According to a senior administration official, because some funds have been tied up in legal proceedings, it will be up for a court to decide if any of the money is going to victims.

Official said that the $3.5 billion set aside for Afghan humanitarian assistance would not be part of the larger U.S. efforts to assist Afghanistan. Since August, $516 million has been donated by the United States to Afghanistan via international aid organizations.

Last month, the U.N. warned that 23 million Afghans are in desperate need of aid and launched a more $5Billion funding appeal to help them. U.N. World Food Program states that 8.7 millions are at risk of starvation. Millions of girls aren't enrolled in school and food prices are increasing.
The court must approve the transfer of funds. It will take at least several months for the money to become available. This official stated, noting that the Biden administration has already spent hundreds of hours determining what to do about the assets.

A third party would oversee the money if the asset transfer is approved to a trust account. However, who and how the third party would allocate the funds are still unknown, according to the senior administration official.

While there are $2 billion more in Afghan funds in other countries than Afghanistan, no government has attempted to freeze these funds.

"We're taking heed to bipartisan calls from Congress for the use of the reserves to mitigate Afghanistan's serious and ongoing crisis," stated the official. "While at the same time, we recognize the importance of continuing efforts by victims and their families to pursue other claims in courts."

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