Afghans urge court not to give frozen central bank assets to 9/11 families

WASHINGTON — Exiled Afghans are urging a federal judge to reject efforts by relatives of 9/11 victims to seize $3.5 billion in frozen Afghan central bank funds to pay off judgment debts owed by the Taliban, according to recent court documents.

In three depots, groups of Afghans argued that the frozen money belonged to the Afghan people, not the Taliban. They described any embezzlement as illegal and immoral at a time when their country’s economy is collapsing, causing a growing humanitarian crisis and an exodus of migrants.

Lawyers for Naseer Faiq, a former Afghan government diplomat who continues to lead his mission to the United Nations despite Taliban objections, wrote that he “fully supports compensation for Taliban victims”. But it was wrong to take that compensation from assets that he said belonged to the Afghan people as a whole, the lawyers said.

“This compensation cannot come from the Afghan people, who are neither morally nor legally responsible for the tragic events of September 11, 2001 or other acts of terrorism committed by the Taliban,” the brief continues. Many Afghans helped the United States fight the Taliban, he noted, saying the Afghan people were also victims of the Taliban.

The Afghans’ objections add to the dilemma facing the Federal District Court Judge presiding over the complex litigation, Judge George B. Daniels of the Southern District of New York, who is still deciding whether the money can be used to pay the families of seven 11 victims. Magistrate Judge Sarah Netburn is assisting him in this effort.

The high-stakes case stems from the extraordinary spectacle of a sanctioned terrorist organization that has taken over a country through military force but is not recognized as its legitimate government. The case raises new legal questions that touch on issues of foreign policy, international finance, the fight against terrorism and domestic politics.

Two plaintiffs from a group that took the initiative to seize the funds – Fiona Havlish and Ellen Saracini, who lost their husbands in the attacks – said in a statement that “our hearts are with the Afghan people who are suffering under the Taliban”. ruler.”

But, citing the “Taliban’s control over all aspects of life in Afghanistan, including the central bank”, they argued that “the court should apply the law as Congress drafted it to satisfy the judgments that we and others have rightly stood against the Taliban for so many years.”

The dispute over funds dates back to lawsuits filed years ago by relatives of people killed in the September 11 attacks. The families have sued groups like al-Qaeda and the Taliban for their losses, winning by default when the defendants failed to appear in court. At the time, the judgments seemed symbolic since there was no way to collect the money.

But when the government collapsed during the Taliban takeover in August, its central bank – known as Da Afghanistan Bank, or DAB – had accumulated $7 billion on deposit at the New York Federal Reserve. Because it was no longer clear who had legal access to these funds and the sanctions prohibited financial transactions with the Taliban, the Federal Reserve suspended access to ATM’s account.

In September, attorneys for a group of plaintiffs in the Havlish case – about 150 people, linked to 47 estates of the nearly 3,000 people killed in the September 11 attacks – persuaded a judge to send a U.S. Marshal to serve the New York Federal Reserve with a writ of execution to begin seizing Afghan funds to pay off its judgment debt. This sparked a stampede by other plaintiff groups who demanded a share of the funds.

The Biden administration stepped in, saying it wanted to study the matter before telling the court what the US government believed to be its interests. President Biden used an executive order in February to officially freeze all funds, then earmarked half of them for the purpose of helping the Afghan people.

Senior State Department official for Afghanistan Tom West later said in an onstage interview that the administration believed the best use of that $3.5 billion would be to recapitalize an independent central bank and to revive the collapse of the country’s financial system rather than funding humanitarian aid such as food. and medicine.

Mr Biden’s decision left the remaining $3.5 billion in the central bank account for relatives of 9/11 victims to continue to sue in court. Most – but not all – of the other plaintiff groups eventually agreed to support the Havlish Group’s claim in return for what would be a proportionately smaller share of the proceeds, subject to Judge Daniels’ approval.

But the judge has yet to determine whether the funds can be used for this purpose. The administration did not take a clear position on what he should do.

Under a 1978 law, assets of a foreign state held in the United States are generally protected by sovereign immunity. But Congress has created a narrow exception for certain terrorism situations. A 2002 law states that if someone has obtained a judgment against a terrorist party for an act of terrorism, the blocked assets of “any agency or instrument of that terrorist party” can be seized to repay the debt.

The 2002 law was used to seize the assets of Iran and Cuba, which had been designated as state sponsors of terrorism. The question is whether the Afghan central bank is eligible under the current circumstances – in which Afghanistan was not considered a state sponsor of terrorism, but a sanctioned terrorist group took control and became the government of facto of the country without being legally recognized.

The Havlish plaintiffs argued that the bank is considered an agency or instrument of the Taliban and that handing over the assets would do justice “to the terrorist group that nurtured, protected and supported al-Qaeda”.

But leaders of an Afghan civil society organization argued that paying off Taliban debts with funds from the Afghan people would instead confer implicit recognition of the Islamist group’s “violent takeover of their country” and ” would allow the Taliban to be relieved of a judgment against without bearing the punitive effects of paying the judgments”.

While Mr Biden’s decision shielded half of the Bank of Afghanistan’s assets from 9/11 plaintiffs, his leaving the other half for them to continue pursuing in court has drawn sharp criticism in Afghanistan, as well as among other relatives of Seven. 11 victims, who opposed the seizure of funds.

Unfreeze Afghanistan, a US group that also opposes giving money to relatives of 9/11 victims, has instead advocated handing over the assets to the Afghan central bank so it can start running the banking system again and the wider economy, including through regular injections of hard currency.

The group’s brief suggested that the bank’s technocrats could make the currency injections work to help the Afghan economy start functioning again without the money being diverted to the Taliban, using checks and transferring funds in tranches subject to monitoring, with any further transfers being halted should this occur.

Mr Faiq was more cautious, suggesting the funds could eventually be used to recapitalize an independent central bank for the country “when and as can be done in compliance with Taliban sanctions”.

Criticizing Mr. Biden’s decision to shield only half of the bank’s assets from lawsuits, a letter from nine former Afghan women leaders also said, “We fail to understand why this sought-after protection should not extend to the all of the $7 billion that has been frozen.

They added: “These funds have been placed outside the country for the sole purpose of protecting them, and they are necessary to support the Afghan currency. We would expect US authorities, including the courts, to protect our central bank assets – not just half but all. »

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