Biden signs executive order to try to release frozen Afghan assets for aid

President Biden has signed an executive order to take the first steps in an attempt to release some $3.5 billion in frozen Afghan assets held in the United States to be used for humanitarian assistance in Afghanistan.

But because the Taliban controls the country – and has been sanctioned as a terrorist organization – the US government is seeking to create a third-party trust fund to administer and distribute aid.

Some $7 billion in assets of the former Afghan central bank are frozen in US banks. Some families of victims of the September 11 attacks have sued for damages from the funds.

The Biden administration says it wants to respect the victims’ lawsuits as well as the legal process, so it plans to allocate only half of the frozen assets to humanitarian aid.

The administration says that a new court order will be needed to allow the transfer of the assets for humanitarian purposes, since the families have obtained deeds of seizure of the assets.

“This is a step forward in a process. No funds will be transferred until the court issues a decision,” a senior administration official said. “A notion that we could simply ignore the litigation in New York is simply wrong.”

The administration cited Afghanistan’s grim economic challenges to justify the order. He said that even before the rocky withdrawal of US forces from the country last August, Afghanistan faced poverty rates above 50%, grants from international donors financed 75% of public spending and a drought two years had reduced many crops to 40% of their usual yields.

The $7 billion has been frozen since the collapse of Afghanistan’s central government, when the president and acting central bank governor fled the country. The US Federal Reserve then acted to keep the money out of the hands of the Taliban.

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