US sets up Afghan relief fund with frozen central bank money

WASHINGTON (AP) — The U.S. and Swiss governments and Afghan economics experts said Wednesday they will transfer $3.5 billion in frozen funds from Afghanistan's central bank to use for the country's people as hunger grips every province there.

Notably, the Taliban government will not be a part of the new Afghan Fund, which will maintain its account with the Bank for International Settlements in Switzerland.

In the interim, Afghanistan's central bank, which in February had $7 billion in frozen funds, “must demonstrate that it has the expertise, capacity, and independence to responsibly perform the duties of a central bank,” the U.S. Treasury and State departments said Wednesday in a joint statement. “Robust safeguards have been put in place to prevent the funds from being used for illicit activity."

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 2021 following the U.S. military's withdrawal.

In February, President Joe Biden issued an executive order that called for banks to provide $3.5 billion of the frozen money to a trust fund for distribution through humanitarian groups for Afghan relief and basic needs.

The other $3.5 billion will 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, prompted by claims brought by family members of people killed on Sept 11, 2001.

“The Afghan Fund will help mitigate the economic challenges facing Afghanistan while protecting and preserving $3.5 billion in reserves from Da Afghanistan Bank (DAB), Afghanistan’s central bank, for the benefit of the people of Afghanistan,” Treasury Deputy Secretary Wally...