Story of a Plunder: America Seizes Central Bank Reserves from Afghanistan

The US government has frozen assets worth around $7 billion that Afghanistan has deposited with the Federal Reserve in New York.

Half of the money will be reserved for a circle of victims of the 9/11 attack.

The remainder is to go to the Afghan population, who owned the property until it was confiscated.

US President Joe Biden ordered this by decree.

A court has the last word.

Winand von Petersdorff-Campen

Economic correspondent in Washington.

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In a statement from the White House, the order is presented as a measure to secure at least part of the money and allow humanitarian aid to be sent to Afghans bypassing the Taliban regime.

Afghan assets are invested in dollars and are therefore unaffected by the dramatic fall in the Afghan currency.

Afghanistan itself is heading towards a severe famine.

According to the United Nations, 22 million Afghans are suffering from hunger, and 95 percent of the population had too little to eat in December.

The White House points out that lawyers for two groups of plaintiffs from victims of the 9/11 attack have already obtained enforcement orders over Afghan financial assets in the United States.

The presidential decree ensures that at least some of the money stays with the Afghans.

In fact, ten years ago, a New York court ruled in favor of the so-called Havlish

for $6 billion in compensation.

However, the verdict was not directed against the Afghan state, but against the Taliban and was also considered symbolic.

It was also a so-called default judgment: for obvious reasons, representatives of the Taliban did not appear in court at the time to present their views.

"Bizarre Logic"

The situation changed when the Taliban victoriously invaded Kabul in mid-August.

The US plaintiffs immediately attempted to obtain enforcement orders over the Afghan assets from the courts, this time with success.

"The main actors causing this injustice are American law, an American judge and a group of 9/11 families," said lawyer Erin Farrell Rosenberg.

The human rights expert sharply criticized the judicial granting of the enforcement order.

It should never have happened.

The decision is based on the fact that the Taliban is suddenly on an equal footing with the Afghan state and is therefore making starving Afghanistan's state assets available for American claims for damages, "a bizarre logic," political scientist Daniel Drezner commented in a Washington Post column.

What's more, according to Rosenberg, if one comes to the conclusion that the Taliban are right to owe damages, this court decision absolves them of their guilt.

In addition, the Afghan people, now robbed of their wealth, are also victims of the Taliban and, as Rosenberg notes, may have suffered more at the hands of the Taliban than the victims' families.

The equality of the Taliban with the Afghan state is also questionable, according to her statement, because neither the American government nor the United Nations have accepted the Taliban as legal representatives of Afghanistan.

No Afghans involved in the assassination

"The money does not belong to the Taliban, but to the Afghan people," says Abid Amiri, author of the book "The Trillion-Dollar War." People from much richer countries who could be held harmless.

In fact, 15 of the 19 known assassins came from Saudi Arabia, two from the United Arab Emirates, one from Egypt and one from Lebanon.

It is unclear exactly how the presidential decree came about, which apparently tries to balance the interests of the Afghan population and the claims of the plaintiffs.

What is striking, however, is that Biden's special representative for Afghanistan issues, attorney Lee Wolosky, who was appointed in late summer 2021, left the White House in January - and is now one of the attorneys for the plaintiffs who secured access to the assets.

Wolosky is a partner at renowned law firm Jenner & Block, but took time off to consult with the National Security Council (NSC) and other agencies on Afghan refugee settlement and other issues related to the disengagement from Afghanistan.

The White House told The Intercept newspaper that Wolosky had withdrawn from any issue related to a possible freeze of Afghan state assets.

However, before his interlude in the White House, Wolosky had already tried to have assets of the Iranian central bank in Luxembourg confiscated on behalf of the plaintiffs, but failed in a court there in 2019.

The consequences of an impending theft of assets by the American government are not limited to the loss of assets, as economist Amiri makes clear.

Assets are supporting the Afghan currency, which is now likely to fall further.

As a country dependent on imports, Afghanistan relies on reserves to pay for imports, which primarily benefit the private sector.

The White House, meanwhile, emphasizes that it is working tirelessly with the international community to keep humanitarian aid flowing to Afghanistan.

America is the largest donor with $ 516 million since August.