Biden Moves to Split $7 Billion in Frozen Afghan Funds

President Joe Biden will clear the legal path for victims of the Sept. 11 terrorist attacks to pursue $3.5 billion from assets that Afghanistan’s central bank had deposited in New York before the Taliban took the country over. 

Biden will also issue an executive order invoking emergency powers to consolidate and freeze all $7 billion in assets that the Afghan central bank kept in New York. Biden too will ask a judge for permission to now move the $3.5 billion to a trust fund, and use that fund to pay for humanitarian relief efforts and additional immediate needs in Afghanistan. 

The moves are highly unusual. They are meant to address a cluster of issues stemming across political, legal, foreign policy and humanitarian crises, all stemming from the Sept. 11 attacks in 2001, and from the end of a two decade war in Afghanistan. 

When the Taliban overtook Afghanistan in August, and the Afghan government dissolved in its wake, it left behind around $7 billion in central bank assets on deposit at the Federal Reserve Bank in New York. This is because it was no longer clear who had the legal authority to access the account, if anyone at all could. So the funds became unavailable for withdrawal. 

The Taliban instantly put a claim to the money. But a fight has broken out amongst lawyers in the U.S. representing different groups of victims of the Sept. 11 attacks over who can attempt to seize the billions as well. There have been various lawsuits in the past filed by groups of victims filed against Al Qaeda and others they said provided support to terrorists to execute the attacks. The defendants did not appear in court, so therefore the victims’ families won default judgments. But there was also no way to collect money from the defendants. So judgments that said they were liable for the losses the plaintiffs had suffered felt only symbolic in nature. Now that there’s billions in a bank in New York, there could potentially be funds. 

Victims and families will reportedly be able to receive this money when Biden announces his executive order, meaning the $3.5 billion will be able to go to them. 

The other half is going to fund humanitarian causes. In Afghanistan, the economy is collapsing. Mass starvation is creating a destabilizing new enormous wave of refugees. There is a clear need for extensive humanitarian relief. 

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