The Joe Biden administration in the United States of America, last Sunday, froze Afghan Government reserves held in U.S. bank accounts, blocking the Taliban from accessing billions of dollars held in U.S. institutions, according to two people familiar with the matter.
According to the Washington Post, the decision was made by Treasury Secretary Janet L. Yellen and officials in the Treasury Department’s Office of Foreign Assets Control, the people said.
The State Department was also involved in discussions over the weekend, with officials in the White House monitoring the developments.
An administration official said in a statement, “Any Central Bank assets the Afghan government have in the United States will not be made available to the Taliban.”
The officials spoke on the condition of anonymity to discuss government policy not yet made public.
Cutting off access to U.S.-based reserves represents among the first in what are expected to be several crucial decisions facing the Biden administration about the economic fate of that nation following the Taliban takeover.
Afghanistan is already one of the poorest countries in the world and is highly dependent on American aid that is now in jeopardy.
The Biden administration is also likely to face hard choices over how to manage existing sanctions on the Taliban, which may make it difficult to deliver international humanitarian assistance to a population facing ruin, experts say.
Asked Tuesday what leverage the United States would have over the Taliban going forward, White House national security adviser Jake Sullivan said that “there are obviously issues related to sanctions” but declined to elaborate.
He also said the administration would first communicate directly with the Taliban.
President Biden in his speech Monday appeared to commit to continuing to give aid to Afghanistan, saying: “We will continue to support the Afghan people. We will lead with our diplomacy, our international influence and our humanitarian aid.”
The Afghanistan central bank held $9.4 billion in reserve assets as of April, according to the International Monetary Fund. That amounts to roughly one-third of the country’s annual economic output.
The vast majority of those reserves are not currently held in Afghanistan, one of the people familiar with the matter said. Among those, billions of dollars are kept in the United States, although the precise amount is unclear.
Spokespeople for the White House and Treasury Department declined to comment on the process for blocking the funds or the fate of U.S. economic assistance to Afghanistan. A spokeswoman for the Federal Reserve Bank of New York, where much of the money is presumed to be held, also declined to comment.