Biden Orders Frozen Afghan Funds Split Between Aid to Afghanistan and 9/11 Victims

Biden Orders Frozen Afghan Funds Split Between Aid to Afghanistan and 9/11 Victims

President Joe Biden signed an executive order Friday that will steer frozen assets from Afghanistan’s central bank toward both addressing the ongoing humanitarian crisis in the country and compensating Sept. 11 victims.

The funds were frozen and held in the United States in the wake of the U.S. troop withdrawal and subsequent collapse of the government in Kabul in August.

The order requires the U.S. financial institutions holding the funds to transfer them into a consolidated account held at the Federal Reserve Bank of New York.

The total $7 billion—largely made up of donations by the United States and other nations to Afghanistan—will then be split in half, with $3.5 billion of those assets meant for the benefit of the Afghan people. The other $3.5 billion will remain in the United States and go toward a pending judicial decision on whether U.S. 9/11 victims should be compensated by the Taliban—who have been in de facto control of Afghanistan since shortly after the U.S. troop withdrawal.

There are still several different things that need to occur across the U.S. government for the first half of the funds to reach Afghanistan, a senior administration official told reporters ahead of the order being signed. This includes a third party that would administer the funds for their intended uses.

The White House said in a statement that the order “is designed to provide a path for the funds to reach the people of Afghanistan, while keeping them out of the hands of the Taliban and malicious actors.”

The other half of the funding is meant for a trust fund the Biden administration is still working to set up. It will then require actions from the courts where U.S. citizens have filed claims against the Taliban for those citizens to be compensated from the other $3.5 billion.

Taliban political spokesman Mohammad Naeem criticized the Biden administration for not releasing all the funds to Afghanistan.

The Biden administration pushed back against criticism that all $7 billion should go to Afghanistan, arguing that the 9/11 claimants have a right to their day in court.

“Some of this money can be used for the benefit of the Afghan people while respecting the legal process,” said a senior administration official.

In addition to the $7 billion frozen in the United States, there is another $2 billion from the Afghanistan central bank frozen largely in Germany, the United Arab Emirates, and Switzerland.

U.N. officials have warned of a looming humanitarian crisis in Afghanistan. Nearly 80 percent of the previous government’s budget came from the international community. That money, now cut off, financed hospitals, schools, factories, and government ministries.

The United States has given more than $516 million in humanitarian aid to Afghanistan since it ended a more than 20-year war in the country.

The Associated Press contributed to this report.

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Nick Ciolino covers the White House.

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