WASHINGTON (AFP) – The United States said Wednesday it was setting up an outside fund to manage $3.5 billion in Afghanistan’s reserves, claiming it cannot trust the Taliban leadership with the country’s money.
The new Afghan Fund, based in Geneva, will be put in charge of core central bank functions such as paying Afghanistan’s international arrears and for its electricity imports and potentially for future necessities such as printing currency.
The decision comes after talks between the Taliban and the United States failed to convince President Joe Biden’s administration that it should hand over assets frozen when the Taliban returned to power 13 months ago, despite the dire humanitarian needs in Afghanistan.
The Afghan Fund will be incorporated in Switzerland with a board of two appointed Afghan economists unaffiliated with the Taliban and representatives of both the U.S. and Swiss governments.
It will maintain an account with the Bank for International Settlements, which is owned by the world’s central banks, and also pay for key functions such as Afghanistan’s access to the global SWIFT banking payment system.
The United States expects the bulk of the reserves to be preserved and “responsibly managed” until the situation changes, a senior official said.
The United States froze $7 billion in Afghan assets maintained in New York in August 2021 when the two-decade-old Western-backed government swiftly collapsed with Biden’s pullout of U.S. troops.
Biden in February said that half of the assets would be made available to victims of the September 11, 2001 attacks, which prompted the U.S. invasion of Afghanistan that toppled the Taliban, although Afghanistan had nothing to do with the attacks.