President Joe Biden issued an executive order on February 11 declaring that he intends to split $7 billion of Afghan money currently held in the US Federal Reserve in New York between humanitarian aid for Afghanistan and compensation for the families of 9/11 victims. Biden, though, had no authority to do this. The $7 billion legally belongs to Afghanistan’s central bank, Da Afghanistan Bank, but has been frozen by the Fed since the Taliban took over Afghanistan’s governance in August 2021. The United States does not recognize the leadership of the Taliban, making it difficult to decipher who can legally access the money. Now, Biden has attempted to unfreeze the funds to spend $3.5 billion on humanitarian aid and allow the New York District Courts to determine how the other $3.5 billion is distributed to families of 9/11 victims. However, the legality behind the Biden administration’s decision to unfreeze Afghanistan’s money is ambiguous at best, and doing so sets a dangerous precedent for the use of foreign exchange currency as a political tool.
The money was collected by the former Afghan government over the past 20 years by selling coal and minerals, collecting taxes, and receiving foreign aid. It is legally owned by Afghanistan’s central bank which, like over 250 other central banks, governments, and international institutions, deposited the money in the Federal Reserve. This type of fund is a common safety net through which nations hold large sums of foreign currency in other countries, ensuring that their central banks can maintain steady exchange rates to the dollar and have access to liquidated money weighed against other currencies. In cases of economic crisis and inflation, a country’s central bank can use its backup reserves to circulate more money into the economy and manufacture some stability.
Afghanistan, currently in a state of economic disarray, desperately needs a strong central bank. In August, the Taliban seized control of Afghanistan’s government. Refusing to recognize the Taliban as a governmental entity, the United States imposed sanctions on Afghanistan, ensuring that states and organizations worldwide would halt their foreign aid. Both the World Bank and the IMF, which had committed $800 million in aid for 2021 and nearly $460 million in emergency currency reserves respectively, refused to allocate funding to Afghanistan. A Polish company is contracted to print Afghanistan’s currency but, due to international sanctions, only delivered one batch of the banknotes in February 2021 and refuses to fulfill the rest of the contract. These sanctions, along with the already-strenuous impact of Covid-19 and crippling cash shortage, have left Afghanistan’s economy on the brink of collapse. The government cannot print more money, and humanitarian aid organizations within the country have been unable to access their funds in the bank, where withdrawals from NGO accounts have been capped at $25,000 per month. Now, these organizations pay their employees informally, if they do at all. 98 percent of the country does not have enough to eat, and most lack even the most basic necessities.
The Fed claims that, because of antiterrorism sanctions placed on the Taliban, it is unable to endorse Da Afghanistan Bank’s claim to the funds. Though the Taliban has technically assumed control of it, Afghanistan’s central bank is still run separately with its own board, many of whom were members before the Taliban takeover. The international community achieves nothing productive by refusing to acknowledge the necessity of Da Afghanistan Bank in this crisis; instead, it exacerbates soaring rates of inflation and extreme poverty in the country. Allowing Afghanistan to succumb to economic turmoil does not stop Taliban rule or secure human rights. If anything, it will further Afghan animosity toward the rest of the world. The Biden administration proposed that $3.5 billion of the funds go to humanitarian aid; however, many Afghan activists have criticized this approach as a short-term solution to a long-term problem. In order for any aid to have an effect, Afghanistan needs a functioning economy, job security, and a central bank that is not bankrupt. Humanitarian aid alone cannot permanently feed the 4.7 million people facing malnutrition, but a functioning economy would help get the country back on its feet.
The other $3.5 billion, according to Biden’s plan, would not leave the United States and would instead be used, as determined by New York District Courts, to settle a 16-year-old lawsuit from the families of 9/11 victims. Though the families have already received billions of dollars from the US government, many also won a lawsuit against the Taliban and al-Qaeda which promised them a payout for their losses. Consequently, these families have been guaranteed money and now have the opportunity to receive it; they argue that they have had a right to these assets for years. The lawsuit, though, took place in an American court ruled by an American judge, so plaintiffs also only won by default, since the defendants (the Taliban and al-Qaeda) did not appear in court. Moreover, the money held by the Fed belongs to Afghan people entirely uninvolved in 9/11, not the Taliban or al-Qaeda. It would be those innocents paying the families rather than the guilty party.
One lawyer, representing 150 of the 9/11 families, did try to claim that the Afghan people should have done more to stop the Taliban, saying “the Afghan people didn’t stand up to the Taliban when they had the opportunity to. They bear some responsibility for the condition they’re in.” The Afghan people neither elected the Talibannor carried out the attacks of 9/11 (in fact, none of the 19 plane hijackers were even from Afghanistan). Further, the Afghan people have been paying for 9/11 for decades. Over 45,000 Afghan civilians have died from the US War on Terror, a significantly conservative figure when considering more indirect impacts like disease. The plaintiffs demand retribution where it is not needed and from those who have nothing to pay for.
The United States has no legal claim to the Afghan money yet is attempting to seize sovereign funds from a suffering nation. If a country can freeze or even commandeer another’s foreign reserves because it refuses to recognize their government, the door opens for an international abuse of reserves everywhere. For example, the United States holds $250 billion of assets in other countries. It has also sent its military into 191 of 193 UN recognized nations. By Biden’s logic, if any of those 191 nations hold US assets, they would be reasonable in freezing and keeping them as reparations for US intervention from however many years ago. And while the US government would actually be the perpetrator in those instances, there are no official ties between 9/11 and Afghanistan.
Biden’s executive order represents a hypocrisy we would not tolerate from any other nation in our place. His decision reflects a longstanding US attitude that the Afghan people are somehow responsible for the actions of individuals they have no connection to. While the order might be legally ambiguous, it still advances an immoral and unethical agenda that does little to actually prevent terrorism and instead allows a global hegemon to wrongfully seize $7 billion from a historically imperialized state. The United States is not only turning its back on millions of innocent people in crisis, but also actively robbing them under the guise of counterterrorism.