US to Allow All Commerical Transactions with Afghanistan

The U.S. Treasury on Friday issued a new general license authorizing all commercial transactions with Afghanistan’s governing institutions, expanding recently announced exemptions from sanctions against the Taliban and the Haqqani network.

The new license, the seventh issued by Treasury in recent months, allows “all transactions involving Afghanistan and its governing institutions that would otherwise be prohibited by U.S. sanctions,” the Treasury Department said.

However, it still prohibits financial transfers to the Taliban, the Haqqani network, associated entities and individuals blocked by the Treasury Department.

The action came after talks between the Treasury Department and private sector executives doing business in Afghanistan and is similar to a series of sanctions exemptions granted in recent months to nongovernmental organizations.

“Our action today recognizes that in light of this dire crisis, it is essential that we address concerns that sanctions inhibit commercial and financial activity while we continue to deny financial resources to the Taliban, the Haqqani Network, and other malign actors,” Deputy Treasury Secretary Wally Adeyemo said in a statement.

Wide-ranging U.S. economic sanctions against the Taliban date to their first time in power in the 1990s. Both the Taliban and the Haqqani network are labeled Specially Designated Global Terrorists by the Treasury Department.

‘Too many Afghans starving’

However, in the wake of the Taliban takeover of Afghanistan in August, the Treasury Department has issued a series of sanctions exemptions to allow Afghanistan to cope with a teetering economy and a humanitarian crisis.

“There are too many Afghans starving today, too many Afghans who are cold; we all need to act faster,” a senior administration official told reporters during a press call announcing the general license.

There is also a growing recognition that Afghanistan’s humanitarian crisis is interlinked to an economic crisis exacerbated by a U.S. decision in August to freeze more than $7 billion in Afghan reserves held at the Federal Reserve Bank of New York.

“One of the things we know that is critical is ensuring that the economy is able to function,” the senior administration official said, speaking on condition of anonymity.

U.S. President Joe Biden recently issued an executive order that would split the frozen Afghan assets, freeing up $3.5 billion for the families of the victims of the September 11, 2001, attacks, while allocating the remainder for a humanitarian trust fund for Afghanistan.

The move was condemned by the Taliban and other Afghans who say the money belongs to Afghanistan. But administration officials have since said any decision to transfer the funds to the 9/11 victims will be subject to court proceedings.

“No decisions have been made regarding specific uses of this $3.5 billion,” the senior administration official said.

Since October, the Biden administration has announced more than $780 million in humanitarian aid for Afghanistan and Afghan refugees in the region.

In January, the United Nations launched an appeal for more than $5 billion in humanitarian assistance for Afghanistan, saying half of the country’s population of 35 million faces acute hunger.

Aid to Taliban-Controlled Afghanistan a 'Moral Hazard,' US Lawmakers Say

Washington — 

Six months after the U.S. withdrawal from Afghanistan, lawmakers have few good options for sending aid to prop up the struggling Afghan economy without enabling the Taliban.

In the almost 20 years the U.S. was involved in Afghanistan, the country depended on foreign aid for more than half its economy. But the U.S. froze most of the country’s $9.4 billion in currency reserves last August to isolate the Taliban after they took control.

“There is frankly moral hazard in putting billions into Afghanistan right now,” Democratic Senator Chris Murphy said in a congressional hearing Wednesday. “We can do our best to route it around the Taliban, but there is no doubt that the partial effect of aid is to save the Taliban from itself. That is deeply distasteful.”

The United Nations issued an appeal to the international community last month for its largest-ever aid ask, saying $4.4 billion was needed as “a full-blown humanitarian catastrophe looms.” According to estimates by the World Food Program, only 2% of Afghans will have enough to eat this winter.

“Six months ago, Afghanistan was a poor country, a very poor country,” David Miliband, president and CEO of the International Rescue Committee, told lawmakers. “Today, Afghanistan is a starving country, not just a poor country. The reason — I’m very sorry to report — the proximate cause of this starvation crisis is the international economic policy, which has been adopted since August and which has cut off financial flows not just to the public sector but in the private sector, in Afghanistan, as well.”

Miliband testified that his staff could confirm media reports that Afghans are selling organs to buy enough to eat amid a fall in currency prices that has dropped the value by at least one-quarter.

Top lawmakers on the Senate Foreign Relations Committee acknowledged that the Afghan people are suffering because of the United States’ concerns about enabling the Taliban’s repressive policies. But many warned of the dangers of sending aid.

“We of course must continue to be vigilant in our efforts to deny the Taliban any resources — financial or otherwise — they can use to conduct further acts of terror,” said Republican Senator Todd Young. “The worst-case scenario involved would be if humanitarian aid were diverted from legitimate recipients towards the Taliban and (their) partners and terror.”

FILE – Hundreds of Afghan men gather to apply for humanitarian aid, in Qala-e-Naw, Afghanistan, Dec. 14, 2021.

The heads of nongovernmental organizations acknowledged the difficulty of easing some U.S. sanctions based on negotiations with the Taliban.

“The (U.S.) Treasury cannot feasibly list every permitted sector in the Afghan economy. Instead, U.S. officials must forbid what is not allowed — for example, arms trafficking,” said Graeme Smith, a consultant with the International Crisis Group.

“Unfortunately, many of these steps require cooperation with the Taliban. That is hard, and it is distasteful, especially as the Taliban continue to flout human rights standards. Months of talks between the Taliban and Western officials have not resulted in much progress when the impasse is partly the Taliban’s fault. They have resisted reasonable demands such as allowing education for girls of all ages. However, the U.S. is also pushing unrealistic goals, such as an inclusive government.”

Smith and Miliband told lawmakers the U.S. could take several steps to ease the humanitarian crisis, including releasing $1.2 billion in the World Bank-managed Afghan Reconstruction Fund to directly pay the salaries of Afghans, clarifying the application of U.S. sanctions in the private sector of Afghanistan’s economy, and releasing private assets while keeping Afghan government assets frozen.

But easing those restrictions could be a tough political argument to U.S. lawmakers weighing the cost of the U.S. effort to defeat the Taliban in Afghanistan in trillions of dollars and thousands of lives lost.

Democratic Senator Jean Shaheen said Wednesday, “We need to provide humanitarian assistance to ensure that the people of Afghanistan, the families in Afghanistan, are not starving. And I understand that that means to some extent, we’ve got to thread the needle. But I really reject the premise that we should enshrine with the Taliban their restrictive relationships with their citizens.”

The Biden administration pledged last month to donate an additional $308 million in humanitarian aid to address the crisis.