US and Taliban officials inch towards deal to unfreeze Afghanistan’s reserves: Report
Since the botched withdrawal from Afghanistan last year, the US has kept nearly $10bln of the country's foreign reserves frozen in the Federal Reserve Bank of New York
By News Desk - July 26 2022

(Photo credit: DW)

Officials from the US and the Taliban government in Afghanistan have reportedly exchanged proposals for the release of billions of dollars from the country’s foreign reserves, which were frozen by Washington last year.

According to sources who spoke with Reuters and are familiar with the talks, Washington is pushing for the Taliban to replace the current appointees of Afghanistan’s central bank, which include Taliban members under sanctions from Washington.

This request is reportedly a bid to “insulate” the banking institution from the Taliban.

Following the complete disintegration of the US-trained Afghan army and the chaotic withdrawal of foreign troops from the country last August, the White House froze nearly $10 billion of Afghanistan’s foreign reserves.

With the US cutting Afghanistan off from its resources, and blocking international organizations from providing emergency aid, a severe humanitarian crisis has unraveled in the war-torn country.

As such, experts agree that freeing up some of the reserves would provide necessary relief for a country that last month faced an earthquake in which at least 1,000 people died.

The negotiations between US and Taliban officials have reportedly focused on an initial release of $3.5 billion that President Biden “set aside” out of $7 billion in Afghan reserves held by the Federal Reserve Bank of New York.

The other $3.5 billion in Afghan reserves has been earmarked for the families of victims of the 11 September 2001 attacks.

In June, a number of relatives of the victims of the 11 September attacks called on Biden to release Afghanistan’s foreign reserves so that the country could begin to overcome its various crises.

US and Taliban officials exchanged proposals for the release of the funds last month during a meeting in the Qatari capital Doha.

This exchange of proposals was seen by the US side as a “glimmer of hope” due to the idea of a system that releases the frozen reserves “while ensuring they are not accessed by the Taliban.”

Washington has reportedly been in talks with Switzerland and other parties to create a trust fund mechanism, from which disbursements would be made, with the help of an “international board.”

Weeks earlier, western media reported that the Biden White House had been in extensive talks on how to handle the anniversary of last year’s botched withdrawal of US troops from Afghanistan, with the aim of ensuring no one does anything “stupid.”

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