WASHINGTON — President
Joe Biden will start to clear a legal
path for certain relatives of victims of the Sept. 11, 2001, attacks to pursue
$3.5 billion from assets that Afghanistan’s central bank had deposited in New
York before the Taliban takeover, according to officials familiar with internal
deliberations.
اضافة اعلان
At the same time, Biden will issue an executive order invoking
emergency powers to consolidate and freeze all $7 billion of the total assets
the Afghan central bank kept in New York and ask a judge for permission to move
the other $3.5 billion to a trust fund to pay for immediate humanitarian relief
efforts in Afghanistan, the officials said.
The highly unusual set of moves, expected to be announced
Friday, is meant to address a tangled knot of legal, political, foreign policy
and humanitarian problems stemming from the attacks and the end of the 20-year
war in Afghanistan.
When the Afghan government dissolved in August — with top
officials, including its president and the acting governor of its central bank,
fleeing the country — it left behind slightly more than $7 billion in central
bank assets on deposit at the Federal Reserve Bank in New York. Because it was
no longer clear who — if anyone — had legal authority to gain access to that
account, the Fed made the funds unavailable for withdrawal.
The Taliban, now in control of Afghanistan, immediately claimed
a right to the money. But a group of relatives of victims of the Sept. 11
attacks, one of several sets who had won default judgments against the group in
once seemingly quixotic lawsuits years ago, sought to seize it to pay off that
debt.
Meanwhile, the economy in Afghanistan has been collapsing,
leading to mass starvation that is in turn creating an enormous and
destabilizing new wave of refugees — and raising a clear need for extensive
spending on humanitarian relief.
Against that backdrop, the White House’s National Security
Council led months of deliberations on the central bank funds involving top
officials from departments including Justice, State and Treasury, according to
people who spoke on the condition of anonymity to discuss a sensitive matter
that has not yet been made public.
The money belonging to the Afghan central bank — known as Da
Afghanistan Bank — includes assets like currency, bonds and gold.
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 to generate that
activity. Alex Zerden, a former top Treasury Department official in
Afghanistan, characterized the central bank reserves as a kind of rainy day
fund for the Afghan people.
In addition, about half a billion dollars of the bank’s assets
correspond to the reserves of commercial banks in Afghanistan, which by law
must keep a certain amount of their deposits — including the savings of
ordinary Afghan people — at the central bank. Those assets are owned by Da
Afghanistan Bank, but it owes the same amount to the commercial banks.
After the Taliban took over Afghanistan, they appointed their
own official to lead the central bank and demanded the immediate release of the
money held in New York. But under long-standing counterterrorism sanctions
imposed by the United States, it is illegal to engage in financial transactions
with them.
Another option has been to let the assets sit untouched,
gathering interest for what is likely to be years before the Taliban perhaps
again lose power and a more normal government arises.
But in September, a group of about 150 relatives of Sept. 11
victims, who years ago won a default judgment after suing targets like al-Qaida
and the Taliban in a case known as Havlish, persuaded a judge to dispatch a
U.S. Marshal to serve the legal department of the Federal Reserve of New York
with a “writ of execution” to seize the money.
After The New York Times reported on the matter in November, a
number of other Sept. 11 groups who filed similar lawsuits after the attacks
stepped forward to ask for a share of the Afghan bank assets.
By then, the Biden administration had intervened in the Havlish
litigation, invoking a law that permits it to step into lawsuits to inform the
court what is in the national interest. It has postponed the deadline for it to
make that statement until Friday.
Biden has decided that the government will not object to any
court decision to devote half of the money for the Sept. 11 claims. The Justice
Department is instead expected to tell the court that victims of the attacks
should have a full opportunity to have their claims heard, according to people
familiar with the matter.
But if the judge agrees to partly lift the writ of execution,
Biden will seek to direct the remainder toward a trust fund to be spent on food
and other assistance in Afghanistan — while keeping it out of the hands of the
Taliban, according to people briefed on the decision. Setting up that fund and
working out the details is expected to take several months, the people said.
It is highly unusual for the U.S. government to commandeer a
foreign country’s assets on domestic soil. Officials are said to have discussed
a two-part legal process for Biden to engineer that outcome.
First, he would use emergency powers under a provision of the
International Emergency Economic Powers Act to “direct and compel” that a
foreign country’s assets in the United States be moved to a segregated account.
That would block them, but the Afghanistan central bank would still own them.
Second, officials have discussed then using a provision of the
Federal Reserve Act that permits disposing of property belonging to the central
bank of a foreign nation — so long as it has the blessing of someone the
secretary of state has recognized as being “the accredited representative” of
that foreign country.
But deciding who qualifies as such a person, at a time when
Afghanistan’s former government no longer exists, has raised significant
complications. It remained unclear what solution Biden administration officials
had settled on and whether the name of any person or people they deem as such
would be disclosed for security reasons, like possibly endangering family
members still in Afghanistan.
Further complicating matters, the United States does not
recognize the Taliban as the legitimate government of Afghanistan, raising the
question of whether funds belonging to the Afghan central bank are really the
Taliban’s and so can be used to pay off the Taliban’s judgment debts.
But the Biden administration has come under domestic political
pressure to tell the court that it thinks the bank’s money is sufficiently
linked to the Taliban now that they control that country and its institutions,
making the funds seizable.
The administration’s move will further cripple Afghanistan’s
already paralyzed central bank; draining most of the bank’s capital — it also
has about $2 billion scattered across Germany, Switzerland, the United Arab
Emirates and Qatar — makes it even less likely that the bank will be able to
resume its efforts to stabilize the value of Afghan currency and prices in that
country, including by regularly auctioning millions of U.S. dollars for Afghan
cash.
In recent weeks, a longtime member of the bank’s board, Shah
Mehrabi, had argued that the U.S. government should instead let Da Afghanistan
Bank try to restart some of that work and carefully watch to make sure the
funds did not reach the Taliban.
In an interview, Mehrabi — who is also an economics professor at
Montgomery College in Maryland — contended that the central bank should be seen
as independent of the now Taliban-led Afghan government. He said that many
civil servants there knew how to run the bank, and that depriving the bank of
the funds it needed to maintain price stability would lead to runs on
commercial banks, mass defaulting on loans and ultimately broader disaster.
“You’re talking about moving toward a total collapse of the
banking system,” he said. “I think it’s a shortsighted view.”
But an administration official familiar with the government
deliberations argued that the “sad reality” was that even if the central bank
regained access to the assets in New York and moved them all into Afghanistan
for one last injection of capital, it would not solve the deeper structural
problems that have sent the country’s economy spiraling into ruin.
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