U.S. to Transfer Afghan Funds to Swiss Bank for Safekeeping
On Wednesday, the US announced that it plans to transfer billions of dollars in frozen Afghani assets to a fund in Switzerland. This will effectively shelve talks that discusses recapitalizing the central bank despite the Taliban rule. The assets consist of roughly 7 billion USD. The Switzerland bank, the Bank for International Settlements, will guard the funds. In addition, a board will be responsible for approving limited transactions that will continue to support the economy of Afghanistan such as payments owed to international institutions that will allow the flow of aid and support to continue.
The US has stated that in order to be recapitalized, the Afghan central bank must meet several requirements. These requirements range from instituting standards to protect against money laundering, terror financing, and introducing a third-party monitor. In addition, it requires that the Taliban deny support to terrorist groups. The US and Afghanistan have argued over the funds for months as the Afghan economy struggles and individuals face poverty and food insecurity. Inflation continues to soar within the country and foreign countries are wary of transactions with Afghanistan out of fear of violating international sanctions that target the country’s leadership.