US to start using $3.5 billion 'Afghan fund' Biden seized from Afghanistan

The Biden administration has announced the establishment of a platform to begin spending USD 3.5 billion to benefit the people of Afghanistan, using funds that Biden seized from Afghanistan's bank

The Biden administration has announced the establishment of a platform to begin spending USD 3.5 billion to benefit the people of Afghanistan, using funds that President Joe Biden had frozen and seized from Afghanistan's central bank after the Taliban took over the country last year.

The Switzerland-headquartered 'Afghan Fund' established by the US on Wednesday in association with its international partners, the government of Switzerland and Afghan economic experts will facilitate the use of certain Afghan central bank reserves for the benefit of the people of Afghanistan without benefiting the Taliban.

In February, President Biden set a policy of enabling USD 3.5 billion worth of Afghan central bank reserves to be used for the benefit of the people of Afghanistan.

With the Afghan fund, the US and our partners are following through with that commitment with a concrete step toward ensuring that these additional resources will contribute to helping relieve hardship and suffering in Afghanistan. In particular, we would like to thank the Swiss government for its partnership to ensure this effort would be possible, State Department Spokesperson Ned Price told reporters at his daily news conference on Wednesday.

This fund, he said, will protect and preserve the Afghan central bank reserves while making targeted disbursements to help stabilise Afghanistan's economy, and ultimately support its people and work to alleviate the worst effects of the humanitarian crisis. The Afghan fund will maintain its account with the Bank for International Settlements (BIS) based in Switzerland, he said.

An external auditor will monitor and audit the Afghan fund as required by Swiss law. The Taliban are not a part of this financing mechanism, and resources disbursed will be for the benefit of the Afghan people with clear safeguards and auditing in place to protect against diversion or misuse, Price said.

In addition to our leadership to facilitate the establishment of this fund, the United States continues to be the largest donor of humanitarian assistance to the Afghan people, he said, adding that this effort has proceeded along multiple tracks, including working with the World Bank and the Asian Development Bank to make available more than USD1 billion in humanitarian assistance and support for their basic needs, in addition to over USD814 million in US humanitarian assistance to the Afghan people.

With these measures, we will help the people of Afghanistan, as the economy of Afghanistan faces serious structural issues that no amount of external support and resolve on its own. And the US has made clear to the Taliban that the onus is on them to make key reforms, which we have outlined repeatedly, Price said.

Price said the US need to disburse the funds that are currently located in the United States to the Afghan fund that's based in Switzerland.

That will take a little bit of time. We're of course working as quickly as we can to do that. But the other key point is that the Afghan fund is explicitly not intended to make humanitarian disbursements, he said.

The Afghan fund itself is to facilitate macroeconomic stability inside Afghanistan. So, we will remain the largest humanitarian donor for the Afghan people, he added.

This fund is to provide macroeconomic stability in Afghanistan that will enhance the effectiveness of humanitarian assistance from the United States and other donors, he said.

The people of Afghanistan face humanitarian and economic crises born of decades of conflict, severe drought, COVID-19, and endemic corruption, said Wendy Sherman, United States Deputy Secretary of State.

Today, the United States and its partners take an important, concrete step forward in ensuring that additional resources can be brought to bear to reduce suffering and improve economic stability for the people of Afghanistan while continuing to hold the Taliban accountable.

The Afghan Fund will help mitigate the economic challenges facing Afghanistan while protecting and preserving USD 3.5 billion in reserves from Da Afghanistan Bank (DAB), Afghanistan's central bank, for the benefit of the people of Afghanistan, said Wally Adeyemo, United States Deputy Secretary of the Treasury.

The Taliban's repression and economic mismanagement have exacerbated longstanding economic challenges for Afghanistan, including through actions that have diminished the capacity of key Afghan economic institutions and made the return of these funds to Afghanistan untenable. Through this Fund, the United States will work closely with our international partners to facilitate use of these assets to improve the lives of ordinary people in Afghanistan.