Biden orders $7B in frozen Afghan funds be used for humanitarian aid, Sept. 11 victims

President Joe Biden signed an order Friday to free $7 billion US in Afghan assets now frozen in the U.S., splitting the money between humanitarian aid for poverty-stricken Afghanistan and a fund for Sept. 11 victims still seeking relief for the terror attacks that killed thousands and shocked the world.

No money would immediately be released, but Biden's order calls for banks to provide $3.5 billion US of the frozen amount to a trust fund for distribution through humanitarian groups for Afghan relief and basic needs. The other $3.5 billion US would stay in the U.S. to finance payments from lawsuits by U.S. victims of terrorism that are still working their way through the courts.

International funding to Afghanistan was suspended and billions of dollars of the country's assets abroad, mostly in the U.S., were frozen after the Taliban took control of the country in August as the U.S. military withdrew.

The White House said in a statement that the order "is designed 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."

Biden's plan aims to resolve a complex situation in which the U.S. is sitting on billions owned by a country where there is no government it recognizes, with competing appeals for the money for the needs of the Afghan people and families still scarred by the 2001 terror attacks.

The Biden administration pushed back against criticism that all $7 billion US should be released to Afghanistan, arguing that the 9/11 claimants under the U.S. legal system have a right to their day in court.

The Justice Department had signalled months ago that the administration was poised to intervene in a federal lawsuit filed by 9/11 victims and families in New York City. The deadline for that filing had been pushed back until Friday.

The families in that case won a U.S. court judgment in 2012 against the Taliban and some other entities. But other victims' relatives also have ongoing lawsuits over the attacks, and a New York-based lawyer for about 500 families urged Friday that all should be on equal footing for the fund.

Afghanistan's long-troubled economy has been in a tailspin since the Taliban takeover. Nearly 80 per cent of the previous government's budget came from the international community.

That money, now cut off, financed hospitals, schools, factories and government ministries. Desperation for such basic necessities has been further exacerbated by the COVID-19 pandemic as well as health-care shortages, drought and malnutrition.

Aid groups have warned of a looming humanitarian catastrophe. State employees, from doctors to teachers and administrative civil servants, haven't been paid in months. Banks have restricted how much money account holders can withdraw.

Taliban political spokesperson Mohammad Naeem criticized the Biden administration for not releasing all the funds to Afghanistan.

"Stealing the blocked funds of Afghan nation by the United States of America and its seizure [of those funds] shows the lowest level of humanity … of a country and a nation," Naeem tweeted on Friday.

The Taliban have called on the international community to release funds and help stave off a humanitarian disaster.