Few Americans have kept abreast of the catastrophic consequences that the US withdrawal from Afghanistan and the subsequent Taliban takeover have had for that country. Prior to the Taliban conquest, 80% of Afghanistan’s annual budget was provided by Western donors, with the lion’s share coming from the United States. Kabul’s foreign creditors have been much more reluctant to continue paying its new rulers, and the international community has also refused to allow the Taliban access to previous government funds abroad. Of the approximately 9 billion dollars stored abroad by “Da Afghanistan Bank” (DAB), the Afghan central bank, more than 7 billion dollars are held in the United States. The United States has refused to hand it over to the Taliban for the past six months, refusing to recognize it as the legitimate government of Afghanistan.

The Taliban’s historic record of hostility against the United States meant that the decision to withhold the funds was not initially controversial. But the decision has rightfully come under scrutiny as the near-bankrupt country has slid into a horrific humanitarian crisis. The Taliban-led government, tasked with maintaining the remnants of bureaucracy from the previous administration with a pitiful fraction of its budget, is struggling to pay the salaries of ministers and civil servants, including teachers. This has been a major obstacle to its promised reopening of all schools in March. The government has also been unable to pay for food and electricity imports, leading to power outages and hunger across the country. Today, nine out of ten Afghans live below the poverty line. The United Nations – certainly no friend of the Taliban – has warned that one million Afghan children could starve to death in the coming year without urgent humanitarian aid. In January, the UN requested $5 billion for Afghanistan, the largest funding appeal in its history, and warned that unless immediate action is taken, it may need $10 billion. dollars to avert a greater catastrophe in 2023.

Despite the tumult of the past year and the continuing famine, the fundamentals of the Afghan economy are sound. The country has an agricultural base sufficient to avoid widespread starvation if properly distributed, and benefits from a wealth of precious metals and minerals for future foreign investment. Afghanistan’s current problem is a liquidity crisis: due to a combination of capital flight, international sanctions and an unwillingness to engage with the morally questionable Taliban government, there is very little Western currency left in Kabul. . To unfreeze the country’s economy, Western governments and international organizations must distribute money, renew circulation and restore economic confidence.

The sticking point of any aid program is the fear that it might come to the aid of the Taliban, who, for better or for worse, are now firmly established as the de facto government. This is the crux of the matter: if there are ways to provide this aid without allowing Taliban members to enrich themselves through corruption, the United States has a moral imperative to take them. But if Washington is unable to provide aid in a way that prevents Taliban officials from lining their pockets, it could arguably be justified in continuing to withhold aid. Fortunately, there are options to help Afghans independent of the Taliban. Humanitarian groups such as the Red Cross continue to operate in the country and funds can flow directly to them. The United States has also eased its sanctions policies against Afghanistan in recent months, giving aid organizations limited authority to transfer money into the country for benign purposes — paying teachers’ salaries, for example. To help unlock aid, the US government can establish a trust fund, requiring an audit of disbursements and reserving the right to change the fund’s policies if it becomes clear that the money is ending up in the hands of the Taliban.

The US government understands these procedures. On Friday, President Joe Biden signed an executive order consolidating the $7 billion in ATM funds into a single account at the Federal Reserve Bank of New York. Of the money to be raised in that account, the president said half – about $3.5 billion – would be transferred to a regulated trust fund set up to provide humanitarian aid.

There are still clear criticisms to be made of Biden’s use of these funds. As David Miliband, CEO of the International Rescue Committee and former British Foreign Secretary, pointed out to the Senate, no amount of foreign aid can replace a functioning economy. Some observers have predicted that the money will mainly be used to provide basic aid, such as grain and cooking oil, rather than foreign currency to boost Afghanistan’s trade sector. Since the trust fund is administered from Washington rather than Kabul, it is also likely that most of the funds will be spent on US-based aid groups, which means some of the money will stay with United States as overhead. Even so, the program is likely to quickly save lives and help unfreeze Afghanistan’s frozen economy.

However, the Biden administration’s decision to withhold the other half of the DAB money – also $3.5 billion – for damages to victims of the 9/11 attacks is of dubious legality, openly immoral and certain to negatively impact Washington’s broader goals by aiding an Afghan uprising.

The popular description of Biden’s decision as a “robbery” in Afghanistan isn’t entirely accurate. For now, the money remains in the Federal Reserve Bank account. His final dispensation will not be decided by the Biden administration, but by a judge after further legal proceedings. He will likely remain tied to the litigation for several years to come, regardless of Biden’s subsequent actions. Fortunately, the legal case to return the funds from the ATM account to 9/11 victims is far from settled and will likely be subject to further scrutiny in the upcoming legal proceedings.

The basis for the asset seizure is a default judgment in a 2012 lawsuit, Havlish v. Osama bin Laden and. Al., which awarded $7 billion to a group of approximately one hundred and fifty family members of 9/11 victims from assets of Osama bin Laden, al-Qaeda and the Taliban. The Taliban and al-Qaeda don’t have US bank accounts, so the judgment was essentially an empty promise – until September 2021, when Havlish and. Al. convinced a judge to issue a writ of execution seizing the DAB funds, on the grounds that the Taliban now formed the Afghan government and the funds were therefore within his right to take.

The Biden administration’s decision on Friday was essentially an indication that the U.S. government would not oppose any court order disbursing half of the DAB funds to the families of 9/11 victims. But there is a logical inconsistency here: the United States has never recognized the Taliban government and therefore does not consider it to have any authority over DAB. How, then, can a US court legally confiscate ATM money from the Taliban, if the US government does not acknowledge (and allow) Taliban control over the ATM?

According to New York Times, the Biden administration has sought to justify the seizure based on Section 25b of the Federal Reserve Act, which allows the U.S. central bank to take possession of a foreign country’s funds with the authorization of a “representative accredited” of this country. But here is the same catch: there can be no “accredited representative” of the Taliban in the United States, because the United States does not recognize the Taliban. If the United States could find an accredited representative of the DAB from the previous administration, it would amount to admitting that DAB funds do not actually belong to the Taliban. The US government cannot have it both ways.

These fights are likely to continue in the courts for some time. Regardless of the outcome of the court ruling, however, there are strong moral arguments against using DAB funds to compensate 9/11 victims – a moral argument that has been voiced by several 9/11 victims themselves. Basically, despite the presence of ATM assets within the Federal Reserve Bank, the money does not rightfully belong to the United States, but to the Afghan people, and taking it represents a form of theft.

This is a view represented by the DAB in Afghanistan, which is now led by a member of the Taliban, as good as by the designated representative of the Taliban at the UN. But it is also the view of countless non-Taliban Afghans and former President Hamid Karzai, who observed that Afghans themselves had been victimized by al-Qaeda and the Taliban long before and long after the September 11 attacks.

The seizure could perhaps be justified if the funds had simply been provided to DAB by US aid in the first place. Instead, however, they mostly entered the account through third-party foreign currencies. During the US-led war in Afghanistan, whenever US dollars were exchanged for Afghans, the dollars were deposited into ATM’s account. In turn, the Afghan government could use those dollars to buy other commodities, as other central banks often do. Alex Zerden, a former Treasury Department official, called the reserves of the New York Times as a “bad weather fund for the Afghan people”.