Here’s a little 🧵on what today’s #Afghanistan announcement today really means, based on a call that senior administration officials (SAOs) held with reporters this morning.
First, this announcement doesn’t actually guarantee that any money goes anywhere. It leaves it up to New York courts to decide (Tbh, I’m not yet sure which courts/judges. Is it all of them that are hearing 9/11 cases?)
The US is saying it has to defer to the courts because some of the plaintiffs in 9/11 cases were awarded a “writ of attachment” to all $7 billion, which means no one can withdraw that money, not the government of Afghanistan, nor the Biden administration.
BUT what the administration CAN do, is move the money from various US financial institutions into the New York Federal Reserve. They are doing so by invoking the International Emergency Economic Powers (IEEPA) Act, which is a statue used to freeze assets.
From there, it’s really up to the judges - again, I think, the ones dealing with the 9/11 cases. The administration says its preference is for half of the money (about $3.5 billion) to be available to be awarded to 9/11 families.
They are asking the judge to put the other half in a third party trust fund, which hasn’t actually been set up yet. “We’re still working through the modalities and government structure” for that trust fund, the SAOs said.
“This is one step forward in a process,” a SAO said. “No funds are going to be transferred until the court makes a ruling.”
In terms of timing, the SAOs say “it’s going to be at least a number of months before we can move any of this money.” There are a lot of interim steps: Assuming the court rules in favor of transferring $3.5 billion to a trust fund for the Afghan people, Treasury still needs to..
... issue a license to authorize that transfer. The Federal Reserve has to conduct its due diligence of that third party, which again, still hasn’t been established yet.
The SAO’s were asked, basically, are they using the court case as a cop out, a way to shirk responsibility for the funds and put the onus elsewhere? “We in no way think of ourselves as using the court case as a shield,” a SAO said. (cont)
“The idea that we could just ignore the litigation in NY is just flatly wrong. We have to deal with it.”
There are many questions still unanswered. One of the biggest is, where does this leave the administration in terms of legally recognizing the Taliban as the legitimate government of Afghanistan? The plaintiffs were trying to sue the Taliban, but there was no way to collect.
But now, the US is saying that the $7 billion, which belongs to the government of Afghanistan – and comprised largely of foreign aid – is fair game, because the Taliban is in control. But the US doesn’t recognize the Taliban as the legitimate government of Afghanistan.
It’s a sticky legal question that it seems, by announcing this major, but interim step, the US can sidestep for another day. //
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