February 23, 2022
Afghanistan Central Bank Reserves
According to the United Nations, Afghanistan has been
corruption, and decades of conflict. The country’s economy
“descending into the worst humanitarian crisis in the world”
has contracted sharply since the Taliban’s August 2021
since the Taliban’s August 2021 return to power. A U.S.
takeover, exacerbating the humanitarian situation. Along
hold on assets of the Afghan central bank (Da Afghanistan
with other factors, including the cessation of international
Bank, or DAB) deposited in the United States has attracted
development assistance and U.S. and international sanctions
particular scrutiny from some observers who describe this
on the Taliban, the U.S. hold on Afghanistan’s central bank
as one of the most important factors impacting the
assets has arguably contributed to the economic breakdown.
humanitarian and economic situations in Afghanistan.
Members of Congress have expressed a range of views on
The former U.S.-backed government relied heavily on
how to proceed with the assets, including whether to
international development assistance. Foreign donors
continue holding or utilizing them for economic assistance
financed more than half of the government’s $6 billion
or other purposes. In February 2022, the House considered,
annual budget and as much as 80% of total public
but rejected, a measure that would have required the
expenditures. Between 2002 and 2021, the United States
Administration to submit an assessment to Congress on the
provided over $17 billion to the Afghan government in on-
humanitarian impact in Afghanistan of both sanctions and
budget assistance—funds that went directly, or indirectly
the U.S. hold on DAB assets.
through multilateral trust funds, to Afghan government
entities. That aid and other support for Afghanistan helped
According to the International Monetary Fund (IMF), total
raise the country’s per capita gross domestic product (GDP)
international DAB reserves are $9.76 billion, as of the end
from $179 in 2002 to $508 in 2020. Afghanistan’s central
of 2020, the most recent data available. Of this amount, $2
bank reserves grew from just under $7 billion in 2013 to
billion is deposited in financial institutions in the United
$9.8 billion at the end of 2020 (Figure 1).
Kingdom, Germany, Switzerland, and the United Arab
Emirates. The remaining funds are deposited at the Federal
Figure 1. Afghanistan Central Bank Reserves (Billions
Reserve Bank of New York.
of current USD)
On February 11, 2022, President Biden signed Executive
Order 14064 to block U.S.-held Afghanistan central bank
reserves, and stated his intention to disburse $3.5 billion of
the $7 billion currently held in the U.S. Federal Reserve
Bank “for the benefit of the Afghan people.” The Biden
Administration is currently exploring possible avenues,
including humanitarian relief efforts, possibly through a
separate trust fund or by providing support through the
United Nations or some other enabling organization.
Alternatively, the $3.5 billion could contribute toward “the
potential recapitalization of a future central bank [in
Afghanistan] that is recognized and the recapitalization of a
financial system,” according to Tom West, the State

Department’s Special Representative for Afghanistan.
Source: International Monetary Fund.

E.O. 14064 comes in the context of ongoing litigation
brought by some victims of the September 11, 2001 (9/11)
The United States held the DAB assets days after the
terrorist attacks to use the Afghan assets to satisfy their
Taliban entered Kabul, to prevent the group from accessing
judgments against the Taliban. Many of the Afghan assets
the bank’s resources. That decision has contributed to
held in the Fed are subject to writs of attachment by the
instability in Afghanistan’s currency, the afghani (which
plaintiffs in these cases, who would be able to seize the
has lost considerable value since August 2021), and a
assets, if a U.S. court grants permission. After setting aside
severe liquidity crisis. Afghanistan is a highly cash-
half of the Afghan assets for humanitarian or economic
dependent society; according to the World Bank, 85% of
assistance, E.O. 14064 would leave the remaining $3.5
Afghans did not have a bank account as of 2020. Moreover,
billion unavailable until these legal challenges are resolved.
Afghanistan does not have the technical capability to print
its own currency. In at least some parts of the country, food
Economic Impact in Afghanistan
is available, but many Afghans can’t pay for it, illustrating
Afghanistan’s economy has been hamstrung by a number of
the impact of the country’s financial crisis on the broader
factors, including a lack of natural resources, rampant
humanitarian and economic conditions.
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Afghanistan Central Bank Reserves
Taliban and International Response
before, as the ultimate disposition of assets may serve as
The Taliban appear to view the U.S. hold on DAB assets as
leverage to influence the behavior of foreign actors. Several
one of their most pressing policy priorities and have sought
Presidents and Congresses have each at times determined
to marshal domestic Afghan and international pressure on
the ownership of and rights to assets to further foreign
the United States to get the funds released. In a November
policy goals. Presidents have used frozen foreign assets as a
2021 open letter to Congress, the Taliban’s acting foreign
bargaining tool during foreign policy crises, in some
minister wrote, “Currently the fundamental challenge of our
instances, by returning the assets to the sanctioned foreign
people is financial security and the roots of this concern
government, or by channeling them to successor
lead back to the freezing of assets of our people by the
governments, as occurred after the break-up of Yugoslavia.
American government,” calling on the United States both to
In some cases, a President has made frozen assets available
lift the hold on DAB assets and end sanctions on the
to opposition governments, as occurred in the case of
Taliban. The Taliban also allowed a December 2021 march
Panama and Venezuela. Sometimes a portion of frozen
in Kabul, at which protesters called for the release of DAB
assets has serviced the debts of the foreign government. In
assets. A number of regional states with which the Taliban
the case of Iraq after the First Gulf War, a President has
have relations, including U.S. adversaries China, Russia,
directed some blocked assets toward humanitarian relief or
and Iran, as well as U.S. partners Uzbekistan and Pakistan,
to finance the United Nations Compensation Commission.
have also called on the United States to release the assets.
The United States retained the remaining Iraqi assets until
vesting (taking title to) them in 2003 to provide
Potential Impact of 9/11 Litigation on
humanitarian assistance and to assist in reconstruction.
U.S.-Held DAB Assets
Congress has in some cases directed that frozen foreign
Several groups of 9/11 victims—including those injured,
assets be used to pay terrorism judgments owed by a
the estates of those killed, and spouses and other family
foreign government designated under U.S. law as a state
members of victims—who have or are seeking judgments
sponsor of terrorism, including Cuba and Iran.
against the Taliban for their role in supporting the 2001
terrorist attacks are reportedly vying for access to the frozen
Members of Congress have expressed a range of views.
Afghan government assets in order to collect damages. One
Some Members contend that the assets represent one of few
group, known as the Havlish plaintiffs, have a default
remaining points of U.S. leverage over the Taliban, and that
judgment against the Taliban and other defendants, worth
the United States should not release them without securing
approximately $7 billion. The U.S. government filed a
concessions from the Taliban with regard to the role and
statement of interest in the Havlish case arguing that a
security of women or other issues. Some Biden
portion of the DAB funds will be set aside for humanitarian
Administration officials appear to agree with this position,
uses and is not blocked within the meaning of the Terrorism
arguing that the situation in Afghanistan is a direct
Risk Insurance Act (TRIA, 28 U.S.C. § 1610 note), making
consequence of Taliban actions. In October 2021 testimony,
it unavailable for attachment under that statute.
Deputy Treasury Secretary Wally Adeyemo said “I see no
situation under which we would allow the Taliban to have
The United States notified the court that TRIA permits
access to the reserves.” Other Members have advocated for
attachment only to satisfy compensatory and not punitive
their release: in December 2020, 46 Members wrote to
damages, and approximately $4.5 billion of the Havlish
President Biden urging him to consider allowing the DAB
judgment represents punitive damages., Under the Foreign
to access U.S.-based reserves, evidently without conditions,
Sovereign Immunities Act (FSIA, 28 U.S.C. §§1602–1611),
arguing that “pragmatic U.S. engagement with the de facto
foreign sovereign central bank assets in the United States
authorities” is necessary to avert further humanitarian
are immune from attachment to satisfy judgments against
suffering. Congressional reaction to the February 2022
the foreign sovereign. Because the U.S. government does
Executive Order appears mixed and relatively muted.
not recognize the Taliban as the government of
Afghanistan, the U.S. government argued that the court
Many Members appear to be balancing addressing the
must decide whether the DAB assets under U.S. jurisdiction
humanitarian and economic crises in Afghanistan with the
belong to the Taliban and are attachable to satisfy its debts
risk of buttressing a Taliban government viewed as hostile
pursuant to TRIA and notwithstanding the FSIA provisions.
to U.S. interests, as well as a desire to secure compensation
for 9/11 victims. Releasing the assets conditionally or in
The United States advised the court that the Havlish
small, monitored tranches may minimize (though likely not
plaintiffs should have an opportunity to make their case that
eliminate) the risk of the Taliban having access to
they are entitled to a portion of the DAB assets, but that
additional financial resources. Applying the assets solely to
they “must establish a theory of ownership by the Taliban
humanitarian relief might help stave off mass suffering in
that would not require [the court]—either expressly or by
the short term, but might not be sufficient to address the
implication—to make its own determination as to the
currency liquidity and broader economic crises that
identity of Afghanistan’s government or to make its own
underlay the humanitarian emergency.
determination as to whether Afghanistan is a state sponsor
of terrorism,” and urged the court to weigh the “risk of
Martin A. Weiss, Coordinator, Specialist in International
reciprocal challenges to American property abroad.”
Trade and Finance
U.S. Policy and Issues for Congress
Clayton Thomas, Analyst in Middle Eastern Affairs
Jennifer K. Elsea, Legislative Attorney
U.S. policymakers have grappled with the question of what
to do with the U.S.-based assets of governments in flux
IF12052
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Afghanistan Central Bank Reserves


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