The United States establishes an Afghan relief fund with frozen funds for the central bank

By Fatima Hussain, The Associated Press

The US and Swiss governments and Afghan economists said on Wednesday that they would transfer $3.5 billion in frozen funds from the Afghan Central Bank to be used for the country’s people to control hunger in every province there.

Notably, the Taliban government will not be part of the new Afghan fund, which will maintain its account with the Bank for International Settlements in Switzerland.

Meanwhile, the US Treasury and State Department said on Wednesday that the Central Bank of Afghanistan, which in February had $7 billion in frozen funds, “must demonstrate that it possesses the expertise, capacity and independence to perform central bank duties responsibly.” In a joint statement. “Strong safeguards have been put in place to prevent funds from being used for illegal activities.”

International funding for 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 2021 following the withdrawal of the US military.

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In February, President Joe Biden issued an executive order calling on banks to provide $3.5 billion in frozen funds into a trust fund to be distributed through humanitarian groups for relief and basic needs for Afghanistan.

Another $3.5 billion will remain in the United States to fund payments from lawsuits by American victims of terrorism still making their way in the courts, prompted by lawsuits brought by family members of people killed on September 11, 2001.

“The Afghan Fund will help mitigate the economic challenges facing Afghanistan while protecting and maintaining $3.5 billion in reserves from Da Afghanistan Bank (DAB), the central bank of Afghanistan, for the benefit of the Afghan people,” said Deputy Treasury Secretary Wali Adeemo.

He said the Taliban’s “repression and economic mismanagement” had exacerbated Afghanistan’s long-standing economic challenges, which made the return of funds not possible.

Human Rights Watch said in August that the humanitarian crisis in Afghanistan cannot be effectively addressed unless the United States and other governments ease restrictions on the country’s banking sector to allow for economic activity and humanitarian assistance.

The World Food Program said nearly half of the Afghan population – 18.9 million people – was acutely food insecure between June and November 2022. All of the country’s 34 districts face some level of crisis or emergency levels of acute food insecurity.

Deputy Secretary of State Wendy Sherman said the people of Afghanistan face humanitarian and economic crises born of “decades of conflict, severe drought, COVID-19 and endemic corruption.”

“Today, the United States and our partners are taking an important and tangible step forward in ensuring that additional resources can be used to reduce suffering and improve economic stability for the people of Afghanistan while continuing to hold the Taliban accountable,” Sherman said.

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