The oversight entity responsible for monitoring U.S. aid to Afghanistan has reported that the Taliban lacks any legal entitlement to billions in designated funds for the country. This is due to their status as an unrecognized government and the sanctions imposed against them.
In a recent report published on Friday by the Special Inspector General for Afghanistan Reconstruction (SIGAR), it was suggested that former President Donald Trump’s administration, along with Congress, might consider reasserting nearly $4 billion allocated for Afghanistan, placing it back under U.S. government control.
Last year, the U.S. transferred $3.5 billion of Afghan central bank assets, which had been frozen in the U.S., to the Fund for the Afghan People based in Switzerland. Since then, this fund has reportedly grown to nearly $4 billion, as noted by the inspector general.
Despite no direct payments being made to benefit the Afghan people, the fund aims to safeguard and stabilize their economy. The report highlighted that the Taliban is seeking access to these funds, even though they lack legitimate rights to them, given that the U.S. does not recognize them as Afghanistan’s government, lists them as a Specially Designated Global Terrorist entity, and they are subject to U.S. and UN sanctions.
In response to the report, the Afghan Economy Ministry stated that over $9 billion of the nation’s foreign exchange reserves remain frozen. The ministry declared any U.S. actions regarding the allocation, utilization, or transfer of these reserves as unacceptable and called on the global community to restore the funds to Afghanistan’s central bank to ensure the nation’s stability. It further argued that U.S. spending has had little to no significant positive effect on the Afghan economy.
This report follows the Trump administration’s decision to pause foreign aid for a period of 90 days to assess whether various initiatives align with its policy aims. According to SIGAR, nearly $3.71 billion has been expended in Afghanistan since the U.S. withdrawal in 2021, with the majority being allocated to U.N. agencies. Additionally, around $1.2 billion remains accessible for future distribution.
While U.S. humanitarian efforts may have “staved off famine” amid an economic crisis, they have not deterred the Taliban from hostage-taking incidents, the suppression of women and girls’ rights, media censorship, the facilitation of terrorism, or targeting former Afghan government officials, as noted by the watchdog.
The U.S. continues to be Afghanistan’s largest donor, but the report indicated that a considerable portion of the funds is either taxed or diverted. Chris Borgeson, deputy inspector general for audits and inspections at SIGAR, remarked that “the further the cash gets away from the source, the less transparency there is,” highlighting concerns over the management of aid funds.
Simultaneously, Afghan authorities provided clarity on the recent takeover of the nation’s only luxury hotel. The General Directorate of State-Owned Corporations indicated that an international hotel brand named Serena had an agreement with the Tourism Promotion Services Company, which was annulled by the Emirates Hotel Company in December of the prior year. The hotel continued its operations normally despite this.
To enhance service standards, the Emirates Hotels Company has entered into a new agreement with an unnamed international corporation recognized for its expertise in hospitality. This company is set to manage and operate the Kabul Hotel’s services more effectively, according to the directorate’s statement on its official X account.
