WASHINGTON — President Joe Biden signed an order Friday to free $7 billion in Afghan assets now frozen in the U.S., splitting the money between humanitarian aid for poverty-stricken Afghanistan and a fund for Sept. 11 victims still seeking relief for the terror attacks that killed thousands and shocked the world.
No money would immediately be released. But Biden’s order calls for banks to provide $3.5 billion of the frozen amount to a trust fund for distribution through humanitarian groups for Afghan relief and basic needs. The other $3.5 billion would stay in the U.S. to finance payments from lawsuits by U.S. victims of terrorism that are still working their way through the courts.
International funding to 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 as the U.S. military withdrew.
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.”
Biden’s plan aims to resolve a complex situation in which the U.S. is sitting on billions owned by a country where there is no government it recognizes, with competing appeals for the money for the crying needs of the Afghan people and families still scarred by the 2001 attacks.
Brett Eagleson, whose father, Bruce, died in the attack on the World Trade Center, said that though victims' families support the distribution of a large portion of the funds to the Afghan people, the remaining funds should be distributed fairly among the families.
“Anything short of equitable treatment for and among the 9/11 families as it relates to these frozen assets is outrageous and will be seen as a betrayal" by the government, Eagleson said in a statement.
The Justice Department had signaled months ago that the administration was poised to intervene in a federal lawsuit filed by 9/11 victims and families in New York City. The deadline for that filing had been pushed back until Friday.
The families in that case won a U.S. court judgment in 2012 against the Taliban and some other entities. But other victims’ relatives also have ongoing lawsuits over the attacks, and a New York-based lawyer for about 500 families urged Friday that all be on equal footing for the fund.
“It’s going to take a lot of funds to provide monetary compensation, but we’ll never make these people whole. Never," said attorney Jerry S. Goldman.
Afghanistan's long-troubled economy has been in a tailspin since the Taliban takeover. Nearly 80% of the previous government’s budget came from the international community. That money, now cut off, financed hospitals, schools, factories and government ministries. Desperation for such basic necessities has been further exacerbated by the COVID-19 pandemic as well as health care shortages, drought and malnutrition.
Aid groups have warned of a looming humanitarian catastrophe. State employees, from doctors to teachers and administrative civil servants, haven’t been paid in months. Banks have restricted how much money account holders can withdraw.
U.S. courts where 9/11 victims have filed claims against the Taliban will have to take additional action for victims and families to be compensated from the $3.5 billion, deciding if they have a claim, according to senior administration officials who brief reporters.
The Biden administration is still working through details of setting up the trust fund, an effort the White House says will likely take months.
Because victims have ongoing legal claims on the $7 billion in the U.S. banking system, the courts would have to sign off before half the money for humanitarian assistance could be released to Afghanistan, the officials said.
The U.S. launched the war in Afghanistan more than 20 years ago after then-Taliban leader Mullah Omar refused to hand over al-Qaida leader Osama bin Laden following the 9/11 attacks on the United States. Bin Laden, who was born in Saudi Arabia but had his citizenship revoked, relocated to Afghanistan after being expelled from Sudan in 1996.
Taliban political spokesman Mohammad Naeem criticized the Biden administration for not releasing all the funds to Afghanistan.
“Stealing the blocked funds of Afghan nation by the United States of America and its seizure (of those funds) shows the lowest level of humanity . . . of a country and a nation," Naeem tweeted on Friday.
The Taliban have called on the international community to release funds and help stave off a humanitarian disaster.
The Biden administration pushed back against criticism that all $7 billion — largely derived from donations by the U.S. and other nations to Afghanistan — should be released to Afghanistan, arguing that the 9/11 claimants under the U.S. legal system have a right to their day in court.
Afghanistan has more than $9 billion in reserves, including just over $7 billion in reserves held in the United States. The rest is largely in Germany, the United Arab Emirates and Switzerland.
As of January the Taliban had managed to pay salaries of their ministries but were struggling to keep employees at work. They have promised to open schools for girls after the Afghan new year at the end of March, but humanitarian organizations say money is needed to pay teachers. Universities for women have reopened in several provinces with the Taliban saying the staggered opening will be completed by the end of February when all universities for women and men will open, a major concession to international demands.
In recent months, Afghans have been able to withdraw only $200 weekly and that only in Afghanis, not in U.S. currency. Afghanistan’s economy has teetered on the verge of collapse.
The United Nations last month issued an appeal for nearly $5 billion, its largest ever appeal for one country, estimating that nearly 90% of the country’s 38 million people were surviving below the poverty level of $1.90 a day. The U.N. also warned that upward of 1 million children risked starvation.
David Miliband, head of the International Rescue Committee, urged release of the funds to prevent famine, at a Senate Judiciary subcommittee hearing on the matter Wednesday.
“The humanitarian community did not choose the government, but that is no excuse to punish the people, and there is a middle course — to help the Afghan people without embracing the new government,” Miliband said.