As part of our ongoing work to address the humanitarian and economic crisis in Afghanistan, President Biden signed an Executive Order (EO) to help ensure custody of certain US-based assets of Afghanistan’s central bank, the Da Afghanistan Bank (“DAB”) can be used to help the Afghan people. The EO will freeze ownership of DAB held in the United States by US financial institutions and require US financial institutions to transfer such ownership to a consolidated account maintained with the Federal Reserve Bank of New York. The government will seek to facilitate access to these $3.5 billion in assets for the benefit of the Afghan people and for Afghanistan’s future, pending a court decision.
Many US terror victims, including family members of victims who died in the September 11, 2001 terrorist attacks, have filed lawsuits against the Taliban and are suing in federal courts over DAB assets. Because some of these plaintiffs currently have writs of execution against the DAB assets, the court must make a further determination as to the scope of those writs. Even if funds were transferred for the benefit of the Afghan people, more than $3.5 billion in DAB assets would remain in the United States and be the subject of ongoing litigation by US victims of terrorism. Plaintiffs have full opportunity to have their claims heard in court.
This is another step in the United States’ efforts to authorize the transfer of a significant portion of the funds to meet the needs of the Afghan people. The EO aims to provide a route for the funds to reach the people of Afghanistan while keeping them out of the hands of the Taliban and malicious actors. The United States has imposed sanctions on the Taliban and the Haqqani network, including for activities that threaten the safety of Americans, such as taking our citizens hostage.
While this EO will help preserve a significant portion of Afghan reserves for the benefit of the Afghan people, we understand that there are no easy solutions to Afghanistan’s economic challenges, exacerbated by the country’s forced Taliban takeover:
- Even before the events of last August, Afghanistan’s economy was on the brink. Afghanistan faced poverty rates of over 50 percent. Grants from international donors financed about 75 percent of public spending and 50 percent of the national budget. A two-year drought had reduced many crops to 40 percent of their usual yields, and Afghanistan had one of the world’s least developed financial systems — only 10 to 20 percent of adults held bank accounts. Rampant corruption paralyzed sectors that should have been profitable.
- The forced takeover by the Taliban worsened an already ailing economy. The IMF estimates that Afghanistan faces a 30% economic contraction, and many of the senior officials and technical experts needed for sound economic governance have fled the country as a result of Taliban actions.
- These issues reflect long-standing structural problems that existed prior to the August 2021 events and have been exacerbated by uncertainty and perceived risk related to the Taliban’s ability to run the economy. This includes the ability to implement measures to combat money laundering and the financing of terrorism.
Against this challenging backdrop, the United States will continue to work tirelessly with the international community to ensure humanitarian and other assistance flows to the people of Afghanistan. Over the past few months, we have acted urgently to support the Afghan people:
- The United States remains the largest single donor of humanitarian assistance to Afghanistan. Just last month, the United States announced a new contribution of more than $308 million in humanitarian assistance to the people of Afghanistan, and we have committed more than $516 million since mid-August. Humanitarian assistance flows through independent humanitarian organizations and helps provide lifesaving shelter and shelter, basic health care, winter relief, emergency food aid, water, sanitation and hygiene services in response to growing humanitarian needs, exacerbated by COVID-19 and health shortages. Drought, malnutrition and the winter season.
- The United States recently provided the people of Afghanistan with one million additional doses of COVID-19 vaccine through COVAX, bringing our total donation to 4.3 million doses.
- In December 2021, the United Nations Security Council passed a United States-backed resolution establishing an exemption for humanitarian assistance and activities in support of basic human needs in the 1988 UN sanctions regime to ensure much-needed assistance can reach the Afghan people. The United States is also working closely with the United Nations on mechanisms to ensure that UN agencies and NGOs have the liquidity needed to support critical humanitarian assistance programs.
- As of September 2021, the Treasury Department has issued broad approvals facilitating the continued provision of aid and assistance to the Afghan people by NGOs, international organizations and the US government. In December, the World Food Program, with support from USAID, reached 8 million people across Afghanistan with food aid. This was facilitated by licenses issued by the US Treasury Department.
- The United States worked closely with the United Nations when the World Bank transferred $280 million from the Afghanistan Reconstruction Trust Fund (ARTF) to UN agencies. We are proud to be the largest donor to UN operations in Afghanistan and the lead donor to the ARTF.
The United States is committed to assisting the Afghan people, and we continue to evaluate all options available to us to achieve that goal.