The Taliban takeover of Afghanistan – and resulting fall off of the country’s already dire humanitarian situation – has kicked off a debate about what to do with billions of dollars of frozen Afghan government assets held abroad, predominantly in the United States.
Following the takeover, a group of families of about 150 US victims of the September 11 attacks entered the arena, saying they were owed about $7bn in frozen assets held by the Federal Reserve of New York. They were awarded the sum by a federal judge in 2012 following a default judgement against an array of defendants – including the Taliban, al-Qaeda, Osama bin Laden, and Iran – who never showed up in court.
With the Taliban back in power in Afghanistan, families in the so-called “Havlish case” – named after plaintiff Fiona Havlish, whose husband worked on the 101st floor of the South Tower – have argued they finally have the ability to enforce the ruling. They subsequently convinced a federal judge to begin the process of seizing the money.
A US marshal served the Federal Reserve of New York with a “writ of execution” in September, in a series of moves first reported by The New York Times.
However, the US government intervened in the case, requesting a series of delays so it could give its position on the matter.
Meanwhile, several other groups of 9/11 plaintiffs, who have separate cases either against the Taliban or other involved entities, have since joined the fray, arguing in court filings that they, too, have a right to the frozen Afghan funds.
The deadline for the government’s response – which could offer a window into the Biden administration’s thinking on the legally and diplomatically complex issue – is Friday.
“The government may say, ‘we’re taking all [the money]’ and then there’s gonna be litigation over that,” Andrew Maloney, a lawyer representing a group of 9/11 families in a case referred to as the “Ashton case”, told Al Jazeera.
“Or they might say, ‘we’ll give it all to you,’ and then we’re happy and we go to the next stage of how to distribute it. Or they might do something in between – like half the money can go to victims and the other half is going to go to humanitarian aid for Afghanistan,” he said.
“That will be very telling, and we’ll go from there,” he said.
Debate about Afghan funds
The Taliban’s lighting-fast offensive across Afghanistan, in which they seized Kabul on August 15, 2021, prompted governments and international institutions to swiftly freeze Afghan Central Bank assets abroad, totalling about $10bn.
The World Bank and International Monetary Fund also froze about $1.2bn in aid money earmarked for the now-overthrown government in Kabul.
With all Western governments refusing to officially recognise the Taliban as Afghanistan’s legitimate government, and some, like the US, legally prohibited from transferring funds to what it considers a “terrorist organisation”, that money has remained in limbo.
In October, the Taliban sent a letter to the US Congress urging the release of the funds, with Amir Khan Muttaqi, who serves as the group’s top diplomat, writing that the frozen assets remain at the root of the “fundamental challenges” facing the country, and warning of a new migrant crisis from Afghanistan as citizens face widespread hunger and insecurity.
Others, including prominent rights groups, have called for the frozen funds to be distributed through humanitarian channels that bypass the Taliban.
That position has gained momentum on Capitol Hill, with 40 US legislators urging the Biden administration to release a “substantial share” of the funds to relevant UN agencies, arguing (PDF) the worsening hunger crisis could be exploited by The Islamic State in Khorasan Province, ISKP (ISIS-K), the local ISIL (ISIS) affiliate in Afghanistan.
They wrote in a letter to the administration, “That dreadful scenario will be made more likely if we fail to address the heart-wrenching humanitarian situation unfolding there today.”
Still others, like Shah Mehrabi, an economics professor at Montgomery College in Maryland and a board member of the Afghan Central bank predating the Taliban takeover, have argued that completely bypassing the Taliban will create unsustainable parallel institutions that would tank the Afghan Central Bank.
Mehrabi has suggested a gradual and independently monitored release of funds to the Taliban government – in the range of $100m to $125m a month.
What has the US government said?
The US government has said that releasing frozen funds to the Taliban is currently a legal impossibility.
The Biden administration has, however, provided nearly $782m to humanitarian aid agencies and sought to relax some restrictions, including allowing money flows to some emergency services and allowing cash remittances to non-sanctioned Afghans.
Meanwhile, lawyers for the 9/11 victims and Biden administration, according to the New York Times and individuals familiar with the situation, have been discussing splitting the $7bn in question between three parties: the 9/11 plaintiffs; humanitarian aid agencies; and to families of 9/11 victims who do not have claims, but did not receive money from a special compensation fund allocated by Congress.
Unresolved, still, are potentially intractable legal obstacles.
It remains unclear if the money can be seized if Washington continues to not recognise the Taliban as the legitimate government in Afghanistan, which undermines the Taliban’s ownership of the funds.
What do the 9/11 families want?
At the same time, the various groups of 9/11 victims are far from unified on who they see as having a rightful claim to the funds.
Lawyers for the Havlish case have argued that the other cases – save a 2016 federal case brought former Department of State contractors in Texas – do not currently have enforceable final rulings against the Taliban, and therefore lack a legal pathway to seize the money.
Representatives for the Havlish plaintiffs declined to comment to Al Jazeera on the situation pending the government’s Friday response.
Other groups, notably plaintiffs in several of the other 9/11 cases – including the Ashton case, have said they are also entitled to the funds based on a 2006 default ruling against the Taliban, regardless of whether they had already been awarded damages.
“I think all the 9/11 families that have a default judgement against the Taliban should be treated the same. That’s simple,” said Maloney, the lawyer representing families in the Ashton case.
He estimated about 80 percent of the families of the 2,977 people killed on September 11 already have those default judgements.
Meanwhile, Lawyers for the O’Neill case, which represents a group of 9/11 victims who do not have default judgements against the Taliban, have filed paperwork (PDF) supporting the government’s review, arguing it could yield a wider dispersal of the funds to families.
The O’Neill case, originally filed in 2004, does not specifically identify the Taliban or Afghanistan as defendants.