WASHINGTON. On Friday, the Biden administration decided to ease sanctions that contributed to the collapse of the Afghan economy following the Taliban takeover in August, with a measure that makes it clear that people can legally engage in transactions with the Afghan government in most cases.
Known as a general license and announced by the Treasury Department’s Office of Foreign Assets Control, the measure states that people can legally transfer money to civil servants in government offices, including ministries now run by the Taliban. This step covers transactions such as taxes, fees, import duties, and the purchase or receipt of permits, licenses, or utilities.
In a statement, Deputy Treasury Secretary Wally Adeyemo described the move as part of a broader United States effort to not only support the flow of humanitarian aid to Afghanistan, but also to promote commercial and financial activities there that could allow the economy to function without bringing direct benefits for Islamist extremists.
“In light of this terrible crisis, it is important that we respond to concerns that sanctions are hindering commercial and financial activities while we continue to deny financial resources to the Taliban, the Haqqani network and other malign actors,” he said.
The measure appears to have been intended to make it harder to blame US government sanctions for the unfolding economic disaster in Afghanistan. The economic situation is creating a humanitarian crisis, including widespread famine, which is prompting a huge wave of migrants to leave the country.
A senior Biden administration official, speaking at a press briefing on condition of anonymity, warned that many other factors contributed to Afghanistan’s economic collapse. These include the abrupt end to massive amounts of Western foreign aid that went to pay government salaries and infrastructure projects, and the exodus of technocrats and other experts with specialized knowledge after the Taliban seized power.
In a statement describing the move, the Treasury also highlighted this theme.
“While easing sanctions alone cannot solve long-standing structural problems and the flight of technocrats and government experts due to Taliban mismanagement, it can ensure that sanctions do not interfere with the economic activities that the people of Afghanistan rely on to meet their most basic needs.” says in the document. said.
The general license precludes doing business with any entity in which the Taliban or the Haqqani network owns a majority stake. It also does not allow payments related to luxury goods or services.
The Afghan central bank, known as Da Afghanistan Bank or DAB, is among the governing institutions that will face fewer hurdles from the measure. Previously, the central bank supported the Afghan currency by regularly auctioning US dollars.
These activities ceased and the value of the Afghan currency plummeted, making food too expensive for many poor Afghans. At the same time, the lack of currency has led to a limit on the amount that Afghans with bank accounts can withdraw from them.
Many officials from the bank fled in August, and the Taliban placed their leaders to watch him. But at the briefing, a senior administration official said the government was exploring the idea of resuming some of the central bank’s activities if it could be made truly independent, with anti-money laundering controls and third-party scrutiny.
The idea of a potential attempt to resuscitate Afghanistan’s central bank is somewhat at odds with the Biden administration’s move this month for some $7 billion the central bank deposited with the Federal Reserve Bank in New York, money whose fate has been in the spotlight ever since. like a Taliban takeover.
When the Afghan government collapsed, the bank made these funds unavailable for withdrawal. The Taliban have since laid claim to them, while relatives of the people killed in the 9/11 attacks are trying to raise funds to pay back the Taliban’s default debts owed to them in lawsuits they filed against the Taliban, “Al- Qaeda” and others. .
On February 11, the Biden administration decided to split these funds in half – in such a way that the bank could potentially be decapitalized. Mr. Biden has invoked emergency powers to try to move $3.5 billion into a fund to be used for the benefit of the Afghan people. The administration left the remaining money to the plaintiffs on 9/11 to continue the trial.
The judge will have to decide whether the funds can legally be used to pay off the Taliban’s legal debts, a question that raises several thorny and unresolved legal issues.
The Treasury Department noted that nothing in the new general license “affects the property or interests in the property of Da Afghanistan Bank, which are blocked for protection” in line with Mr. Biden’s recent actions.