China asks US to return Afghanistan's foreign reserves to Kabul

By Riyaz ul Khaliq

ISTANBUL (AA) – China said on Thursday that the US-blocked Afghan foreign reserves should be returned immediately so that Afghanistan could utilize them independently.

“The frozen assets are life-saving money of Afghan people, which should be returned immediately, disposed of by Afghanistan independently, and used for the improvement of the livelihood and peaceful reconstruction,” Foreign Ministry spokesperson Mao Ning said.

She urged Washington to “fully lift the asset freeze and unilateral sanctions against Afghanistan as soon as possible.”

Her statement came in the backdrop of the US decision to transfer $3.5 billion in Afghan foreign reserves to a new Swiss-based trust fund that “will be shielded” from the Taliban government, which identifies itself as the “Islamic Emirate,” and “used to help stabilize Afghanistan's collapsed economy.”

Washington blocked around $7 billion in Afghan foreign reserves after all foreign forces withdrew from Afghanistan in August of last year.

The Biden administration has decided to give half of the reserves to families of 9/11 victims.

Under the new plan, the Afghan Fund will be managed by an international board of trustees, which will be able to pay for critical imports such as electricity, cover debt payments to international financial institutions, and fund the printing of new currency.

“The Afghan Fund will protect, preserve and make targeted disbursements of that $3.5 billion to help provide greater stability to the Afghan economy,” the US Treasury has said.

“This fund will protect and preserve the Afghan central bank reserves while making targeted disbursements to help stabilize Afghanistan’s economy and ultimately support its people and work to alleviate the worst effects of the humanitarian crisis,” said US State Department spokesperson Ned Price.

The Afghan Fund is based in Geneva and has an account with the Basel-based Bank for International Settlements (BIS), which provides financial services to central banks.

Responding to the new development, Abdul Latif Nazari, acting Deputy Minister of Economy in the interim Taliban administration, said Afghan assets should be handed over to Afghanistan for use on infrastructure projects.

“The released funds should be given to the government of Afghanistan to use for infrastructure, the development sector and also to back the Afghan currency,” he said.