US to use half of $7bn frozen Afghan funds for 9/11 victims

GBNEWS24DESK//

US President Joe Biden signed an executive order on Friday unfreezing $7 billion in assets in the United States belonging to Afghanistan’s central bank.

The White House is freeing up the funds for humanitarian aid to Afghanistan and for compensation to the victims of the attacks of September 11, 2001. The latter will remain in the US as lawsuits brought by the September 11 victims make their way through the courts.

Biden’s executive order requires US financial institutions to transfer any Afghan central bank assets that they hold into a new consolidated account at the Federal Reserve Bank of New York.

Why is the US unfreezing Afghan assets now?

Last month, a US judge gave the White House until Friday to draft a plan for how it wished to handle the billions in Afghan assets frozen in the United States.

Members of Congress and the United Nations had called on the administration to free up the funds to address Afghanistan’s extreme economic crisis.

Ahead of Friday’s announcement, one US government source told Reuters news agency that the Afghan funds would be released for “the benefit of the Afghan people and for Afghanistan’s future.”
Why were the Afghan central bank’s assets frozen?

Afghanistan’s central bank holdings in the US were frozen in August after the fall of Kabul to the Taliban. The Taliban’s rapid takeover of Afghanistan came after the chaotic US and NATO withdrawal from the country after nearly 20 years.

Almost 80% of the national budget for Afghanistan prior to the Taliban takeover came from the international community. With that funding absent, the country’s economy nosedived.