February 11, 2022

Spurning Demand by the Taliban, Biden Moves to Split $7 Billion in Frozen Afghan Funds

Featuring Alex Zerden

Source: The New York Times

Journalist Charlie Savage

President Biden is starting to clear a legal path for relatives of victims of the Sept. 11, 2001, attacks to pursue $3.5 billion that Afghanistan’s central bank had deposited in New York before the Taliban takeover, while also seeking to steer a roughly equal amount toward spending to aid the Afghan people.

Beginning that process, Mr. Biden issued an executive order Friday morning invoking emergency powers to consolidate and freeze all $7 billion of the total assets the Afghan central bank kept in New York. The administration said it would ask a judge for permission to move $3.5 billion to a trust fund it would set up to support the needs of the Afghan people, like for humanitarian relief.

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Much of it came from foreign exchange funds that accumulated over the past 20 years — a time when the United States and other Western countries were donating large sums to Afghanistan, helping generate that activity. Alex Zerden, a former top U.S. Treasury Department official in Afghanistan, characterized the central bank reserves as a kind of rainy day fund for the Afghan people.

Read the full story and more from The New York Times.

Authors

  • Alex Zerden

    Adjunct Senior Fellow, Energy, Economics, and Security Program, Founder and Principal, Capitol Peak Strategies LLC

    Alex Zerden is the founder and principal of Capital Peak Strategies LLC, a FinTech, digital asset, and emerging technologies advisory firm. As a regulatory lawyer, economic po...