MM News

WASHINGTON: The Biden administration was planning to free up half of $7 billion in frozen Afghan reserves on its soil to help the Afghan people, pending a judicial decision, while holding the rest to satisfy lawsuits against the Taliban from victims of terrorism.

According to the White House, President Joe Biden signed an executive order declaring a national emergency to deal with the threat of a deepening economic collapse in Afghanistan.

The move comes hours before the US Justice Department is due to present a plan to a federal judge on what to do with the frozen funds amid urgent calls from US lawmakers and the UN for them to be used to address the dire economic crisis.

Senior administration officials said they would work to ensure access to $3.5bn of the assets — which stem mainly from aid provided to Afghanistan over the past two decades — to benefit the Afghan people.

They said Washington would set up a third-party trust in coming months to administer the funds but details were still being worked out on how that entity would be structured and how the funds could be used.

The multi-step plan calls for the other half of the funds to remain in the US, subject to ongoing litigation by US victims of terrorism, including relatives of those who died in the September 11, 2001 hijacking attacks, the officials said.

Washington froze the Afghan funds held in the US after the Taliban’s military takeover in August, but has faced mounting pressure to find a way to release the funds without recognising the Taliban, who say the money is theirs.

However, some September 11 victims and their families have filed lawsuits seeking to cover unsatisfied court judgments related to the attacks that killed nearly 3,000 people.

Afghanistan has another $2bn in reserves, held in countries including Britain, Germany, Switzerland and the United Arab Emirates. Most of those funds are also frozen.

US officials said they had been in touch with allies about their plans, but Washington was the first to offer a plan for how to use the frozen assets to help the Afghan people.

The US, the largest single donor of humanitarian aid in Afghanistan, also plans to keep working with the UN and humanitarian aid groups on separate US aid flows, the officials said, adding that they expected significant multilateral engagement in creation of the new trust fund.