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US eases sanctions to allow regular transactions with Afghan government

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US eases sanctions to allow regular transactions with Afghan government

WASHINGTON — The Biden administration issued a measure Friday to ease sanctions that have contributed to the collapse of Afghanistan’s economy since the Taliban takeover in August, making clear that people can legally ally with the Afghan government in most circumstances. may engage in transactions.

The measure, known as a general license and announced by the Treasury Department’s Office of Foreign Assets Control, states that people can legally transfer money to civil servants in government agencies – including those now led by Taliban officials. Ministries are also included. The move includes taxes, duties, import duties and transactions such as purchase or receipt of permits, licenses or public utility services.

In a statement, the Deputy Treasury Secretary, Wally Adeyemo, portrayed the move as part of a larger effort by the United States to support the flow of humanitarian aid to Afghanistan, but also to facilitate commercial and financial activity there. which could allow the economy to run smoothly – without directly benefiting Islamist extremists.

“In light of this grave crisis, it is essential that we address concerns that sanctions impede commercial and financial activity, while we continue to deny financial resources to the Taliban, the Haqqani network and other malicious elements,” he said. are,” he said.

The measure appeared to be aimed at making it harder to blame United States government sanctions for the economic disaster unfolding in Afghanistan. The economic situation is creating a humanitarian crisis, including widespread starvation, prompting a large wave of migrants to leave the country.

A senior Biden administration official, speaking on condition of anonymity at a background briefing for reporters, cautioned that several other factors were contributing to the economic collapse in Afghanistan. These include sudden cuts to government salaries and large amounts of Western foreign aid paid for infrastructure projects, as well as the exodus of technical experts and others with specialized expertise after the Taliban came under control.

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In a statement describing the move, the Treasury Department also emphasized that topic.

“While sanctions relief may not reverse the flight of technical and government experts due to long-standing structural challenges and the Taliban’s mismanagement, it can ensure that sanctions do not stifle economic activity on which the people of Afghanistan rely on it to meet your most basic needs,” it said.

The general license does not cover doing business with any entity that has the majority of the Taliban or the Haqqani network. 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 under the measure. The central bank formerly raised the value of the Afghan currency by regularly auctioning the United States dollar.

That activity has stopped, and the value of the Afghan currency has plummeted – buying food too expensive for many poor Afghans. Also, the currency crunch has raised the limit on how much money Afghans who have bank accounts can withdraw from them.

Several officials of the bank fled in August, and the Taliban have installed their own leaders to oversee it. But at the briefing, a senior administration official said the government is exploring the idea of ​​restarting some central bank activities with controls to prevent money laundering and third-party verification, if it is made truly independent. can go.

Notion of a possible attempt to revive Afghanistan’s central bank is under some tension this month after the Biden administration deposited nearly $7 billion into the Federal Reserve Bank in New York by the central bank, money whose fortunes have been a major focus of the Taliban. acquisition of.

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When the government of Afghanistan was dissolved, the bank made those funds unavailable for withdrawal. The Taliban have since claimed authority over them, while also seeking to seize money to pay off the Taliban’s default judgment debt from lawsuits brought against the Taliban, al Qaeda and others, relatives of those killed in the September 11 attacks. trying. ,

11, the Biden administration went on to split those funds in half — in a way that would potentially decapitalize the bank. Mr Biden called for emergency powers to try to move $3.5 billion into a fund that would be used to benefit the Afghan people. The administration left the remaining money on September 11 for the plaintiffs to continue their pursuit in court.

It will be up to a judge to decide whether those funds can legally be used to pay off the Taliban’s decision loans, a question that raises many thorny and unresolved legal issues.

The Treasury Department noted that according to Mr Biden’s recent action nothing in the new general license “affects the assets or interests of Da Afghanistan Bank that are protectively blocked”.

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