US frees half of $7 billion in frozen Afghan funds for aid

Gulf Today Report

President Joe Biden signed an executive order to deal with the threat of an economic collapse in Afghanistan, setting wheels in motion for a complex resolution of competing interests in the Afghan assets.

Biden’s order is splitting the money between humanitarian aid for poverty-stricken Afghanistan and a fund for Sept. 11 victims still seeking relief for the terror attacks that killed thousands and shocked the world.

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No money would immediately be released. But Biden’s order calls for banks to provide $3.5 billion of the frozen amount to a trust fund for distribution through humanitarian groups for Afghan relief and basic needs. The other $3.5 billion would stay in the US to finance payments from lawsuits by US victims of terrorism that are still working their way through the courts.

Biden's unusual action saw the conflicting, highly sensitive issues of a humanitarian tragedy in Afghanistan, the fundamentalist Taliban fight for recognition, and the push for justice from families impacted by the September 11, 2001 attacks collide, with billions of dollars at stake.

Rescuers make their way through the rubble at the World Trade Centre in New York on Sept.11, 2001. File/AP

International funding to Afghanistan was suspended and billions of dollars of the country’s assets abroad, mostly in the United States, were frozen after the Taliban took control of the country in August as the US military withdrew.

The White House said in a statement that the order "is designed to provide a path for the funds to reach the people of Afghanistan, while keeping them out of the hands of the Taliban and malicious actors.”

Biden’s plan aims to resolve a complex situation in which the US is sitting on billions owned by a country where there is no government it recognizes, with competing appeals for the money for the crying needs of the Afghan people and families still scarred by the 2001 attacks.

Brett Eagleson, whose father, Bruce, died in the attack on the World Trade Center, said that though victims' families support the distribution of a large portion of the funds to the Afghan people, the remaining funds should be distributed fairly among the families.

"Anything short of equitable treatment for and among the 9/11 families as it relates to these frozen assets is outrageous and will be seen as a betrayal" by the government, Eagleson said in a statement.

The order "is designed to provide a path for the funds to reach the people of Afghanistan."

The families in that case won a US court judgment in 2012 against the Taliban and some other entities. But other victims’ relatives also have ongoing lawsuits over the attacks, and a New York-based lawyer for about 500 families urged on Friday that all be on equal footing for the fund.

"It’s going to take a lot of funds to provide monetary compensation, but we’ll never make these people whole. Never," said attorney Jerry S. Goldman, according to The Associated Press.

Afghanistan's long-troubled economy has been in a tailspin since the Taliban takeover. Nearly 80% of the previous government’s budget came from the international community. That money, now cut off, financed hospitals, schools, factories and government ministries. Desperation for such basic necessities has been further exacerbated by the COVID-19 pandemic and health care shortages, drought and malnutrition.

Aid groups have warned of a looming humanitarian catastrophe. State employees, from doctors to teachers and administrative civil servants, haven’t been paid in months. Banks have restricted how much money account holders can withdraw.