Biden to redirect frozen Afghan assets to families of 9/11 victims

The US President intends to use his emergency powers to split $7 billion in frozen Afghan central bank funds, allocating $3.5 billion to compensate 9/11 families and $3.5 billion for humanitarian relief.

AP

US President Joe Biden is expected to sign an executive order today that would split $7 billion in frozen Afghan reserves held by the US and make it accessible to families of 9/11 victims.

According to officials speaking to the New York Times, Biden will block $7 billion in Afghan central bank funds under his emergency powers and clear a legal path for relatives of victims of the 9/11 attacks to pursue $3.5 billion of those assets.

Biden will also ask a judge for permission to direct the remaining $3.5 billion into a trust fund for humanitarian relief spending in Afghanistan.

“It is highly unusual for the United States government to commandeer a foreign country’s assets on domestic soil,” the Times wrote.

The previous Afghan government had deposited over $7 billion assets – including currency, bonds and gold – on deposit at the Federal Reserve Bank in New York before the Taliban took over Afghanistan in August 2021. Since then, the Fed has made those funds unavailable for withdrawal.

Complicating matters is that the US does not recognise the Taliban government as legitimate and is legally prohibited from transferring funds to what it considers a “terrorist organisation”, raising the question of whether funds belonging to the Afghan central bank are the Taliban’s.

Additionally, the Biden administration has come under domestic pressure to tell the court that it recognises the Fed’s funds as being linked to the Taliban, making it seizable and kicking off a debate about what to do with the frozen assets.

Shortly after their takeover, the Taliban immediately laid claim to the funds. But a group of about 150 relatives of 9/11 victims in the so-called Havlish case also claimed that they were owed around $7 billion in frozen assets held by the New York Fed.

Arguing that they could enforce the ruling, a federal judge was persuaded to dispatch a US Marshal to serve the Fed with a “writ of execution” in September, in a series of moves reported by the Times.

The US government intervened in the case, requesting it to be delayed until it could give its position on the matter by February.

Several other groups of 9/11 plaintiffs, who have separate cases either against the Taliban or other entities, also joined the fray, arguing in court filings that they too have a right to the frozen Afghan funds.

Lawyers in the Havlish case had earlier proposed an arrangement to split the assets between paying off the Taliban’s judgement debt to their clients and humanitarian relief – similar to what Biden is expected to go ahead with.

But not all relatives of 9/11 victims are on board with the decision.

One of them, Barry Amundson, whose brother was killed in the Pentagon on 9/11, believes the money should be used for the benefit of Afghans.

“I can’t think of a worse betrayal of the people of Afghanistan than to freeze their assets and give it to 9/11 families,” Amundson said.

“While 9/11 families are seeking justice for their loss through these suits, I fear that the end result of seizing this money will be to cause further harm to innocent Afghans who have already suffered greatly.”

Biden’s decision would come at a time when Afghanistan is experiencing an avalanche of hunger and destitution.

According to the UN, more than half of the country’s 38 million people face acute food shortages, as its fragile economy teeters on the brink of collapse with food and fuel prices and other basic staples rising rapidly out of reach.

The Taliban has warned of mass refugee exodus from Afghanistan unless the US and other countries unfreeze more than $9 billion of the country’s assets held abroad and end other financial sanctions against Kabul.

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