US Sanctions Regime in Afghanistan Seeks to Preserve Funds for Afghan People

As part of its ongoing efforts to address the humanitarian and economic crisis in Afghanistan, President Biden has signed an Executive Order aimed at enabling certain US-based assets belonging to the country’s central bank, Da Afghanistan Bank (DAB), to be used to benefit the Afghan people.

Preserving Assets for the Benefit of the Afghan People

The order will block property held by DAB in the United States by US financial institutions and require them to transfer this property into a consolidated account held at the Federal Reserve Bank of New York. The administration plans to facilitate access to $3.5 billion of these assets for the benefit of the Afghan people, pending a judicial decision.

Ongoing Litigation

However, some US victims of terrorism have brought claims against the Taliban and are pursuing DAB assets in federal court, with writs of execution currently in place against these assets. The court will need to issue a further decision regarding the scope of these writs. Despite this development, more than $3.5 billion in DAB assets would remain in the United States and be subject to ongoing litigation by US victims of terrorism. Plaintiffs will have a full opportunity to have their claims heard in court.

US Efforts to Authorize Transfer of Funds

This move is part of the US effort to authorize the transfer of a significant portion of Afghanistan’s funds to meet the needs of its people, while keeping them out of the hands of the Taliban and malicious actors. The US has sanctions in place against the Taliban and the Haqqani network for activities that threaten American citizens, including holding them hostage.

Challenging Economic Situation

Afghanistan faces economic challenges exacerbated by the Taliban’s takeover. Prior to August 2021, Afghanistan’s economy was already on the brink, with poverty rates above 50 percent and a two-year drought reducing crop yields by 40 percent. The Taliban’s takeover has worsened the situation, with the International Monetary Fund estimating an economic contraction of 30 percent.

US Commitment to Supporting the Afghan People

In response to these challenges, the US will continue to work with the international community to ensure that humanitarian assistance and other support flows to the people of Afghanistan. Over the past several months, the US has acted urgently to support the Afghan people, providing more than $516 million in humanitarian aid since mid-August and announcing a new contribution of over $308 million last month.

Collaboration with the United Nations

The US is also collaborating closely with the United Nations on mechanisms to ensure UN agencies and NGOs have the liquidity needed to support critical humanitarian assistance programs. The Department of the Treasury has provided broad authorizations that facilitate the continued provision of aid and support to the Afghan people by NGOs, international organizations, and the US government.

Ongoing Efforts

The US remains committed to supporting the Afghan people and will continue to consider all options available to achieve this goal.