A U.S. decision to set aside about half of the frozen Afghan funds to potentially satisfy lawsuits has caused anger in Afghanistan and beyond
U.S. President Jo Biden has signalled that about $3.5 billion in frozen Afghan assets can potentially be used to compensate families of the victims of the Sept. 11, 2001 hijacking attacks in the United States, a decision that has angered many Afghans.
The move, which also drew criticism from some in the United States, comes as Afghanistan faces one of the world's worst humanitarian crises with millions facing famine due to an economic meltdown since the Taliban seized power last year.
Biden signed an executive order on Feb. 11 to free up some $7 billion in Afghan assets parked in the United States, which were blocked when the Taliban took control of Afghanistan in mid-August.
The plan calls for half the funds to be used to benefit the Afghan people, with the rest remaining in the United States, subject to ongoing litigation by 9/11 families and other U.S. victims of militant attacks.
Taliban officials accused the United States of stealing money from the Afghan people.
Afghanistan's central bank criticised the decision as an "injustice" and called for it to be reversed, while former President Hamid Karzai described it as an "atrocity" against the Afghan people.
Here is the background:
What is the dispute?
A total of $9 billion-$10 billion in Afghan central bank assets were frozen overseas after the Taliban returned to power last year two decades after the Islamist group was toppled by U.S.-led troops.
Just over $7 billion of that is sitting in the New York Federal Reserve. Much of the rest is in European countries including Germany, Britain and Switzerland.
The Taliban has repeatedly called for the release of the frozen assets in order to get the country back on its feet.
But a group of relatives of 9/11 victims argue they have a right to the funds after they were awarded $7 billion in damages against the Taliban nearly a decade ago – money they have never been able to collect.
What is the claim by the 9/11 families?
Nearly 3,000 people were killed and more than 25,000 wounded when al Qaeda militants hijacked four planes in 2001, crashing two into the World Trade Center in New York, another into the Pentagon and a fourth into a field.
The attacks prompted the United States to invade Afghanistan later that year, toppling the Taliban rulers who it accused of giving safe haven to al Qaeda.
In 2012, a group of about 150 relatives of some of the victims were granted about $7 billion in damages against the Taliban and others in a U.S. court ruling.
Until now, there had been no way to recover the money, but the families saw the Taliban's return to power as an opportunity to claim the funds frozen in the United States.
In September, the Federal Reserve was served with a "writ of execution" to seize the money to cover the judgment in the so-called "Havlish case" - named after one of the plaintiffs.
The bigger picture
Afghanistan's cash crunch - fuelled by the suspension of most foreign aid and the blocking of overseas assets which has paralysed the banking system - threatens to tip 97% of the population into poverty this year.
Aid officials have repeatedly called for Washington to start releasing the frozen funds in order to resuscitate the economy, revive business and trade, and restore livelihoods.
Analysts say there are ways to do this without the money falling into Taliban hands.
One expert on Afghanistan said the 9/11 plaintiffs' claim could already be jeopardising lives.
"People are potentially dying right now because that lawsuit ... has added one more layer of complexity to the issue of just freeing up the funds," said the expert who spoke on condition of anonymity.
"This money is not the Taliban's money. You can't seize a country's reserves."
Who actually owns the money, and who has the right to unfreeze it?
There is a lack of clarity on both points. One lawyer described it as a "quagmire".
In the writ, the 9/11 plaintiffs state that the Taliban have declared themselves the government of Afghanistan and claimed ownership of all property belonging to the previous government, including central bank assets.
They argue that the judgment against the Taliban can therefore now be enforced against the assets held at the Federal Reserve.
But analyst Laurel Miller of the International Crisis Group think-tank queried how the United States could construe the assets as belonging to the Taliban when it did not recognise the Taliban as the legitimate government of Afghanistan.
"It's difficult to see how this is Taliban money," she said.
"These are assets of the Afghan state that were accumulated under the Western-supported government over the last 20 years.
"If the plaintiffs do get some of this money it will not hurt the Taliban at all. It will hurt desperately poor Afghans, but it won't be a punishment of the Taliban."
Analysts also questioned what right the United States had to make decisions about another country's assets.
Afghanistan's central bank said its assets had been invested in the United States in line with international practices and belonged to the Afghan people.
The executive order also prompted anger among Afghans on Twitter with many condemning the "cruel" decision and pointing out that the 9/11 hijackers were Saudi nationals.
Different 9/11 groups have recently made moves to claim a share of the funds, which could complicate negotiations, though lawyers said the Havlish plaintiffs were the only 9/11 group that has an enforceable judgment against the Taliban.
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(Reporting by Emma Batha @emmabatha; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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