By:Isabella Arbizo
Staff Writer
President Biden is starting to clear a legal path for relatives of victims of Sept. 11, 2001, attacks to pursue $3.5 billion that Afghanistan’s central bank had deposited in New York before the Taliban takeover, while also seeking to steer a roughly equal amount toward spending to aid the Afghan people. Beginning that process, Mr. Biden issued an executive order Friday morning invoking emergency powers to consolidate and freeze all $7 billion of the total assets the Afghan central bank kept in New York. The administration said it would ask a judge for permission to move $3.5 billion to a trust fund it would set up to support the needs of the Afghan people, like for humanitarian relief. The highly unusual set of moves, which The New York Times had first reported was expected, is meant to address a tangled knot of legal, political, foreign policy, and humanitarian problems stemming from the attacks and the end of the 20-year war in Afghanistan. When the Afghan government dissolved in August — with top officials, including its president and the acting governor of its central bank, fleeing the country — it left behind slightly more than $7 billion in central bank assets on deposit at the Federal Reserve Bank in New York. Because it was no longer clear who — if anyone — had the legal authority to gain access to that account, the Fed made the funds unavailable for withdrawal. The Taliban, now in control of Afghanistan, immediately claimed a right to the money. But a group of relatives of victims of the Sept. 11 attacks, one of several sets who had won default judgments against the group in once seemingly quixotic lawsuits years ago, sought to seize it to pay off that debt. Meanwhile, the economy in Afghanistan has been collapsing, leading to mass starvation that is, in turn, creating an enormous and destabilizing new wave of refugees — and raising a clear need for extensive spending on humanitarian relief. Against that backdrop, the White House’s National Security Council led months of deliberations on the central bank funds involving top officials from departments including Justice, State, and Treasury, according to people who spoke on the condition of anonymity to discuss a sensitive matter that had not yet been made public.