Foreign Affairs

Biden Administration Preparing To Send Billions More To Afghanistan

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The Biden administration has moved $3.5 billion in frozen Afghan money to a dedicated fund for eventual transfer to Afghanistan if the country’s central bank can demonstrate independence from the Taliban.

The Biden administration plans to return billions in financial assets, frozen when the Taliban overran Afghanistan and ousted the central government, through a special “Afghan Fund” through Swiss financial organization, according to a joint statement from the U.S. Treasury Department and State Department. However, officials say that U.S. will not release funds any time soon because there is yet no institution in Afghanistan who can be trusted to distribute the money to its rightful recipients, CNN reported.

“We do not have that confidence today,” a senior US official told CNN.

Funding could help the Afghanistan government finance critical imports and repay debts to international financial organizations, according to the Treasury Department.

A letter from the U.S. Treasury Department to the Afghanistan Central Bank (DAB) this week reiterated the requirements for the institution to avoid falling to Taliban “influence and interference,” according to CNN. The country’s main financial institution must also show that is has “instituted adequate anti-money laundering and countering the financing of terrorism controls” and and bring in “reputable third party monitoring.”

The Biden administration discounted the possibility of routing funds through the DAB after revelations earlier in August that notorious terrorist leader Ayman al-Zawahiri was living in Kabul, fearing the money could fall into Taliban hands, The Wall Street Journal reported on Aug. 15. The U.S. had suspended talks on releasing the funds.

U.S. officials previously said that recapitalization of the DAB is “not a near-term option,” according to the WSJ.

Earlier in 2022, President Joe Biden signed an executive order to release a total of $7 billion in frozen assets to alleviate the dire economic situation in Afghanistan and potentially offset legal fees for the families of 9/11 victims, according to CNN. Congressmembers have urged the Biden administration to release the funding as Afghanistan runs out of money to keep basic government functions running.

Roughly 70% of Afghans report not having enough money to pay for basic living expenses, according to the Treasury Department.

“The United States and its partners take an important, concrete step forward in ensuring that additional resources can be brought to bear to reduce suffering and improve economic stability for the people of Afghanistan while continuing to hold the Taliban accountable,” Deputy Secretary of State Wendy Sherman said in a statement Wednesday.

She added that “robust safeguards” have been established to prevent the Taliban from obtaining the funds and using them for illicit ends.

Today, OFAC issued 7 new Frequently Asked Questions to provide clarity and further facilitate humanitarian aid and commercial activity in Afghanistan.

Read more:https://t.co/wDin1lMJhu

— Treasury Department (@USTreasury) February 2, 2022

However, the U.S. has an open line of communication with the Taliban for “pragmatic engagement,” a senior U.S. official told CNN.

“We want to see these funds … into the pockets of the Afghan people as quickly and effectively as we can manage, and we’re continuing to work with international partners to devise a way to do that,” State Department Spokesman Ned Price said in August.

The DAB did not immediately respond to the Daily Caller News Foundation’s request for comment.