US judge rules 9/11 victims cannot seize Afghan funds

A judge in New York ruled Tuesday that $3.5 billion in frozen funds belonging to Afghanistan’s central bank cannot be used to compensate victims of 9/11 attacks.

The $3.5 billion is half of Afghanistan’s assets frozen by the US treasury after the Taliban takeover in August 2021. Following the collapse of the former government, US President Joe Biden ordered the $7 billion to be split – half to be transferred to an “Afghan Fund” and the other half to be used to compensate 9/11 victims.

Four groups of US families, who had sued the Taliban for their losses and won, had moved to seize the cash. But Judge George Daniels of the Southern District of New York said Tuesday, as quoted by AFP, that the federal courts lack the jurisdiction to seize the funds from Afghanistan’s central bank.

“The Judgment Creditors are entitled to collect on their default judgments and be made whole for the worst terrorist attack in our nation’s history, but they cannot do so with the funds of the central bank of Afghanistan,” Daniels explained in a 30-page ruling.

“The fundamental conclusion… is that neither the Taliban nor the Judgment Creditors are entitled to raid the coffers of the state of Afghanistan to pay the Taliban’s debts,” he tersely stated.

Daniels’ ruling, which aligns with a recommendation by another judge last year, deals a blow to Biden, as well as insurance companies that made payments because of the attacks.

Speaking to Reuters, Lee Wolosky, a lawyer for one creditor group, said: “This decision deprives over 10,000 members of the 9/11 community of their right to collect compensation from the Taliban. “We believe it is wrongly decided and will appeal.”

The other creditor groups are also planning an appeal, a separate Tuesday court filing shows.

The Taliban-run Da Afghanistan Bank, central bank, was quick to respond to the ruling and welcomed the judge’s decision on Wednesday morning.

In a statement issued by the bank, DAB stated: “Afghanistan’s foreign exchange reserves are assets of Afghans, which are used according to the law for the purpose of monetary stability, strengthening the financial system & facilitating trade with the world.”

“The people of Afghanistan want the restrictions imposed on the country’s foreign exchange reserves to be completely removed so that the suffering people can be freed from psycho-economic problems,” DAB said.

“Da Afghanistan Bank – is ready to cooperate comprehensively with the countries of the world and related organizations to resolve international concerns,” read the statement.