US judge says 9/11 claimants should not get frozen Afghan funds

Creditor groups have been trying to tap into some of the $7bn held by Federal Reserve Bank after Taliban takeover last year

Afghan women demonstrate in Kabul in January to demand that the US and international community to unfreeze the country's assets. EPA

A US judge has recommended that victims and survivors of the September 11 attacks not be allowed to seize billions of dollars of assets belonging to Afghanistan's central bank to satisfy court judgments they obtained against the Taliban.

US Magistrate Sarah Netburn said on Friday that Da Afghanistan Bank (DAB) was immune from jurisdiction, and that allowing such a measure would effectively acknowledge the Taliban as the Afghan government, something only the US president can do.

“The Taliban's victims have fought for years for justice, accountability, and compensation. They are entitled to no less,” Ms Netburn wrote. “But the law limits what compensation the court may authorise and those limits put the DAB's assets beyond its authority.”

Her recommendation will be reviewed by US District Judge George Daniels in Manhattan, who also oversees the litigation and can decide whether to accept her recommendation.

The decision is a defeat for four groups of creditors that sued a variety of defendants, including Al Qaeda, that they held responsible for the September 11 attacks, and obtained default judgments after the defendants failed to show up in court.

At the time of the attacks in 2001, the ruling Taliban allowed Al Qaeda to operate inside Afghanistan.

The United States ousted the Taliban later that year, but the militants returned to power a year ago as US and other western forces withdrew from the country.

Lawyers for the creditor groups did not respond to requests for comment.

The groups have been trying to tap into some of the $7 billion of Afghan central bank funds that are frozen at the Federal Reserve Bank in New York.

In an executive order in February, US President Joe Biden ordered $3.5bn of that sum set aside “for the benefit of the Afghan people”.

The US government took no position at the time on whether the creditor groups were entitled to recover funds from the remaining amount under the Terrorist Risk Insurance Act of 2002.

It urged judges Netburn and Daniels to view exceptions to sovereign immunity narrowly, citing the risks of interference with the president's power to conduct foreign relations, and possible challenges to American property located abroad.

Other countries hold about $2bn of Afghan reserves.

Shawn Van Diver, the head of #AfghanEvac, which helps to evacuate and resettle Afghans, said he hoped the frozen funds could be used to help the Afghan economy without enriching the Taliban.

“The judge has done the right thing here,” he said.

Nearly 3,000 people died on September 11, 2001, when planes were flown into New York's World Trade Centre, the Pentagon in northern Virginia, and a Pennsylvania field.

US sanctions ban doing financial business with the Taliban, but allow humanitarian support for the Afghan people.