Kabul: The United States has agreed to release a part of Afghanistan’s frozen assets, which were seized after the Taliban came to power last year, the Turkish (TRT) news agency reported.
The $3.5 billion in fund is to be likely released to the Bank of International Settlements (BIS) based in Basel, Switzerland.
“An international board of experts has also been set up to disburse the money,” the source told TRT World.
The announcement is expected to be made in the coming weeks.
Around $9 billion of Afghanistan’s central bank foreign currency assets held with US and other foreign banks were frozen after the Taliban took over Kabul on August 15 and drove out the US-backed government of President Ashraf Ghani.
The State Department, however, ruled out recapitalizing Afghanistan’s central bank (DAB) as “a near-term option”.
In the new development, DAB could receive the funds for end use “but the US would want a strict compliance with anti-money laundering and terrorist financing protocols in addition to a third-party supervision of the funds”, the source said.
The Taliban government is open to a US proposal for third-party supervision but wants to retain authority over how it is used.
“The frozen reserve is the property of the people of Afghanistan; it is a reserve of the central bank used in its transactions,” Taliban spokesperson, told TRT World.
“It is for the people of Afghanistan to decide on what to do with its reserve and how to use it. Unilateral decision about the reserve of Da Afghanistan Bank is illegal unless agreed to by DAB.”
The US has been under pressure from human rights activists and the Afghan diaspora to release funds to alleviate the humanitarian disaster unfolding in Afghanistan.
The US has been in discussions with Switzerland about the establishment trust, which can help disburse the funds.
Most of Afghanistan’s foreign assets – around $7 billion – are held with the Federal Reserve Bank of New York.
The negotiations to release the funds, estimated $3.5 billion, which US President Joe Biden has set aside for Afghanistan.
The remaining $3.5 billion of Afghanistan’s money with the FED has been logged in to be distributed as compensation to the victims of September 11 attacks, which led to the US invasion of Afghanistan in 2001.
The US government has faced criticism for holding back Afghan funds at a time when ordinary Afghans are reeling under hunger and poverty.