US to move $3.5bn in Afghan assets to Swiss-based trust

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Housed in the Bank for International Settlements, the new Afghan fund will be managed by an international board of trustees.

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The United States says it will transfer $3.5bn in Afghan central bank assets to a new Swiss-based trust fund – part of the reserves it confiscated after the Taliban came to power in August last year.

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The new Afghan fund, managed by an international board of trustees and shielded from the Taliban, could pay for important imports such as electricity, cover loan payments to international financial institutions and fund the printing of the new currency.

“The Afghan Fund will protect, preserve and make targeted disbursements of that $3.5 billion to help provide greater stability to the Afghan economy,” the US Treasury said in a statement on Wednesday, according to Reuters news agency.

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The creation of the new trust fund comes after months of talks between US President Joe Biden’s administration, Switzerland, other parties and the Taliban seeking to return billions of dollars in Afghan central bank assets held in the US and elsewhere.

There was no immediate comment from the Taliban. In June, a Taliban government source, speaking on condition of anonymity, told Reuters that the group did not reject the concept of a trust fund, but that they opposed third-party control of the fund, which returned reserves. Will keep and distribute.

US officials said no money would go to the Afghan central bank, known as the DAB, unless it was “free from political interference” – diplomatic language to replace the bank’s top Taliban officials, including Two of them are under US and UN sanctions with banking professionals. – And anti-money laundering safeguards have been established.

“Unless these conditions are met, sending assets to the DAB would put them at unacceptable risk and endanger them as a source of support for the Afghan people,” US Deputy Treasury Secretary Wally Adamio told Reuters. Seen said in a letter to the Supreme Council of the central bank. ,

The new fund is kept in the Bank for International Settlements (BIS), which provides financial services to central banks. In a statement on Wednesday, BIS said it is “establishing customer relationships” with the new fund.

“The role of the BIS is limited to providing banking services and executing the directions of the Fund’s Board of Trustees without being involved in the Fund’s governance or decision-making. BIS will comply with all applicable restrictions and regulations.”

It will not solve the serious problems driving the severe economic and humanitarian crises, which threaten to worsen as winter approaches. According to the United Nations, nearly half of Afghanistan’s 40 million people suffer “acute hunger”.

US officials said the fund would be overseen by a board representative of the US government; a Swiss government representative; Anwar-ul-Haq Ahadi; a former Afghan central bank chief and former finance minister; and Shah Mahrabi, an American academic who remains on the DAB Supreme Council.

The Taliban’s biggest financial challenge is developing new revenue to offset the financial aid, which provides up to 75 percent of government spending eliminated by the US and other donors after the Taliban takeover.

Economic crises are also fueled by decades of war, drought, the COVID-19 pandemic, endemic corruption and central bank cuts from the international banking system.

US President Joe Biden in February confiscated $3.5 billion in DAB assets to be transferred to a new trust fund “for the benefit of the Afghan people”.

Another $3.5bn is being fought in lawsuits against the Taliban stemming from the September 11, 2001 attacks on the US. Courts can decide to release the money, which can be deposited into the new trust fund.

About $2 billion in Afghan central bank assets held in European and Emirati banks could also end up in the fund.

Credit: www.aljazeera.com /

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