Following the Taliban’s assumption of control of the Afghan government, the United States government froze the assets in order to prevent their transfer to—or use by—the Taliban. The World Bank and International Monetary Fund also froze about $1.2 billion in aid money that had been earmarked for the former government in Kabul. On Friday, President Joseph Biden issued an Executive Order enabling the administration to distribute the frozen funds from Afghanistan’s central bank to support Afghan civilians and representatives of victims of the attacks of September 11, 2001 in the United States. A statement by the administration indicated that the intention is to “provide a path for the funds to reach the people of Afghanistan, while keeping them out of the hands of the Taliban and malicious actors.”

The U.S. government argued that the New York-based funds cannot be released to Afghan control because the Taliban controls the government and remains designated as a terrorist group under Executive Order 13224 (since September 2001), and also under UN sanctions under a regime established by Security Council Resolution 1988 (2011). No government, including the United States, has yet recognized the Taliban as the legitimate government of Afghanistan, but even taking that step would not necessarily trigger a release of the assets to a Taliban-led government if the Taliban remains designated as a terrorist organization. The United Nations 1988 regime and list of sanctions on Taliban leaders, including some who are now in key positions in the interim government announced in September, and the continued designation of groups operating in Afghanistan like Islamic State Khorasan (IS-K), which is listed under the “1267” counterterrorism sanctions regime, have been cited by humanitarian groups as impeding the delivery of critical assistance. U.S. designations do not carry a humanitarian exception—an exception that is routinely embedded within many other U.S. sanctions laws and executive orders. However, UN Security Council members just adopted an important humanitarian carve out for the “1988” sanctions regime in December and are working with key stakeholders to develop mechanisms to use those exceptions.

The dispensation of the frozen assets had been disputed by parties with competing interests and claims, all of which appeared to have at least some legal, moral, and policy grounding. The Biden administration’s decision will prove crucial to enabling longer term aid to millions of Afghans in need of urgent humanitarian assistance, although with potentially devastating implications for the dire economic crisis that has left families without sufficient cash to buy basic goods in the short term. The United Nations says that 22% of Afghanistan’s 38 million people are living in near famine conditions and another 36% are facing acute food insecurity. The allocation of approximately $3.5 billion of the frozen assets to support Afghan civilians—a move advocated by humanitarian organizations—will likely facilitate provision of the assets directly to global aid agencies for implementation; the humanitarian carve-out recently adopted by the UN critically allows its entities and partners to deliver assistance in the country. This course of action will not violate any U.S. sanctions laws or policies, as long as none of the funds come under the control of any Taliban member, and will avoid the need for immediate U.S. decisions on recognizing the Taliban government or the Taliban’s terrorist designation.

The Taliban’s harboring of al-Qaeda leadership at the time of the 9/11 attacks—as well as accusations that the Taliban continues to associate with al-Qaeda—still resonates in U.S. official and judicial circles. Following the Taliban takeover in August, a group of families of about 150 U.S. victims of the September 11 attacks sought to claim the $7 billion in Afghan central bank assets held in New York as payment on a 2012 default judgement against the Taliban, al-Qaeda, Osama bin Laden, and Iran—who evidently did not show up in court. The other half of the frozen funds from Afghanistan’s central bank—approximately $3.5 billion—are now being set aside for pursuit by relatives of victims of the 9/11 attacks with legal claims against the Taliban. On the allocation of funds to support 9/11 victims, former Afghanistan President Hamid Karzai argued, “We commiserate with them [but] Afghan people are as much victims as those families who lost their lives… Withholding money or seizing money from the people of Afghanistan in their name is unjust and unfair and an atrocity against Afghan people.” Critics have widely challenged this move by the Biden administration, noting that the timing and potential devastation it will affect in Afghanistan, particularly when none of the 9/11 attackers hailed from the country, imposes a disproportionate penalty on Afghan civilians while playing largely to domestic U.S. audiences for political gain in the run up to midterm elections.

Taliban leaders argue that the assets belong to the Afghan people and should be released to their control, the movement’s terrorist designation and human rights record notwithstanding, particularly in light of U.S. partnership with other countries with variable human rights records. The Taliban asserts that the Afghan people are being essentially forced to suffer for the perception of the Taliban that was formed at the time of the 9/11 attacks—and which ignores the new regime’s pledges to avoid the abuses committed under earlier Taliban rule during 1996-2001. A recent UN report alleges that the Taliban have targeted and killed at least 65 members of the former government since seizing control, however, challenging their narrative of being an inclusive and representative government.

This decision by the Biden administration—while an effort to uphold sanctions against the Taliban and show support for victims of terrorism domestically—will undoubtedly further debilitate Afghanistan’s fragile economy. While the United States has provided nearly $800 million in humanitarian aid to Afghanistan since the Taliban takeover, and it has relaxed some restrictions on cash remittances to non-sanctioned Afghans, restrictions on Afghanistan’s banking sector continue to imperil the country’s economic viability. Furthermore, John Sifton of Human Rights Watch argued, “If implemented, the decision would create a problematic precedent for commandeering sovereign wealth and do little to address underlying factors driving Afghanistan’s massive humanitarian crisis.” U.S. courts will ultimately decide whether each of the proposed allocations of frozen funds will move forward.