On Oct. 7, two 6.3 magnitude earthquakes struck the Herat Province in Afghanistan killing 2,445 people, a figure that is expected to rise as search and rescue teams reach further communities. According to eyewitness reports, the earthquakes leveled entire villages, hospitals have been overwhelmed, and residents slept outside in the cold over the weekend in fear of further aftershocks.
Much like the earthquake that struck Syria in February this year, these earthquakes have exacerbated already-existing humanitarian and economic crises in Afghanistan where nearly 39 million people face severe hunger. The crisis has been compounded by the consequences of comprehensive international sanctions targeting the Taliban regime.
International aid to the country has diminished since the Taliban returned to power in 2021 and subsequently issued brutal restrictions on the rights of women. Sanctions enforcement and the country’s inability to access its foreign currency reserves make financial transactions and banking in the country nearly impossible. U.S. financial institutions fearful of breaking these measures often over-comply and de-risk non-governmental organizations (NGOs), in addition to creating significant challenges for correspondent banks’ financial flows, which has both crippled Afghanistan’s economy and impeded aid delivery. Furthermore, the Taliban is listed as a Specially Designated Global Terrorist (SDGT) entity by the U.S. which creates a scare amongst some governments, aid organizations, and financial institutions in engaging and providing services under what is now the de facto authority in the country.
This hesitancy to operate in Afghanistan by financial institutions and international aid donors remains despite the U.S. Treasury issuing seven Afghanistan general licenses (GLs) since 2021 that provide for exceptions to sanctions and authorize financial transactions for humanitarian aid, activities designed to address the basic needs of the population, and some minimal transactions that are often necessary to facilitate essential civil society services, such as payment of taxes, tolls, and utilities to sanctioned entities. These GLs are relatively broad in scope and clearly authorize transactions related to humanitarian assistance that are desperately needed for post-earthquake relief and humanitarian aid in Afghanistan. The Office of Foreign Assets Control (OFAC) FAQ 929 specifically states that for the purposes of Afghanistan GLs 14 and 20, “humanitarian assistance includes the provision of relief services related to natural and man-made disasters,” as well as the provision of healthcare, protection and assistance for vulnerable or displaced populations, and the distribution of food and clothing.
Furthermore, the Afghanistan GLs authorize “non-commercial development projects” that could be used for post-earthquake relief, as they would support basic human needs and “primarily benefit poor or at-risk populations or otherwise relieve human suffering.” It is worth noting that all of these financial transactions “must not entail financial transfers to the Taliban, the Haqqani Network, or any entity in which the Taliban or the Haqqani Network owns, directly or indirectly, a 50 percent or greater interest, other than for the purpose of effecting the payment of taxes, fees, and import duties, or the purchase or receipt of permits, licenses, or public utility services” as described in the general licenses. This acknowledges the minimal transactions that are often necessary to facilitate essential humanitarian and other civil society services.
For a list of relevant Afghanistan sanctions authorizations, please see C&SN’s summary of Afghanistan GLs.
Additionally, last year UN Security Council Resolution (UNSCR) 2664 was passed in December, creating a humanitarian carveout from the asset freeze provisions of UN sanctions programs. This large-scale carveout was largely influenced by almost a decade of civil society advocacy and the success of the humanitarian exemption in UNSCR 2615, passed in December 2021, which created a humanitarian assistance provision under UN sanctions regimes targeting the Taliban, in light of the dual humanitarian and economic crisis unfolding in Afghanistan in the wake of the August 2021 Taliban takeover. In December 2022, the U.S. Treasury implemented UNSCR 2664 into domestic U.S. sanctions policy by issuing and amending baseline general licenses “to ease the delivery of humanitarian aid and ensure a baseline of authorizations for the provision of humanitarian support across many sanctions programs.”
Though the Taliban is responding to the earthquake with search and rescue efforts, the scale of the disaster seems to be beyond its capacity. Many Afghans still lack the appropriate temporary housing and shelter, water, medicine, or food. The crisis is expected to worsen as the country heads into the winter months, underscoring the urgent need for international support.
C&SN calls for unhindered humanitarian access and increased funding and international support for Afghanistan. The varied Afghanistan sanctions regimes are creating a ‘chilling effect’ on the financial sector that has led to over-compliance and de-risking by financial institutions. Despite no U.S. or UN sanctions against the Afghanistan government or against the Central Bank (Da Afghanistan Bank), the fact that the Taliban is acting as the de facto leader of the country has led financial institutions to restrict their activities in Afghanistan to avoid the perceived “higher risk” of sanctions penalties altogether.
Furthermore, even though the US Treasury issued GL 20 in Feb. 2022 which authorizes transactions with the Central Bank, the Central Bank “remains cut off from the international banking system and cannot access its assets in foreign accounts, because US and other country’s central banks, and the World Bank, still do not recognize the credentials of any current bank officials.” This is largely due to the U.S. Treasury ceasing to recognize the Afghan Central Bank’s credentials at the New York Federal Reserve after the Taliban takeover in 2021, and President Biden’s subsequent executive order formally seizing all $7 billion of Afghanistan’s reserves in the U.S. This seizure has been widely criticized by human rights organizations and civil society actors. While $3.5 billion was moved to the “Fund for the Afghan People”, it has yet to be released as the Central Bank failed an audit financed by the U.S. in July of this year.
The U.S. and other countries must take action to assist the millions of Afghans who now face starvation and homelessness as winter approaches. This action should include not only aid and disaster relief but also sustainable financial and economic sanctions relief to stabilize the conditions in Afghanistan so that hospitals and businesses may continue to operate in these dire conditions. In the meantime, donors, financial institutions, and NGOs should be reassured that they can provide humanitarian aid and disaster relief to the people of Afghanistan, as is permitted under the U.S. Afghanistan general licenses and existing UN humanitarian carveouts.