On Feb. 25, Treasury’s Office of Foreign Assets Control (OFAC) issued General License 20: Authorizing Transactions Involving Afghanistan or Governing Institutions in Afghanistan, as well as new FAQs and updated FAQs related to Afghanistan.
The general license (GL) authorizes “all transactions involving Afghanistan or governing institutions in Afghanistan,” with the exception of “Financial transfers to the Taliban, the Haqqani Network, any entity in which the Taliban or the Haqqani Network owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, or any blocked individual who is in a leadership role of a governing institution in Afghanistan, other than for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services, provided that such payments do not relate to luxury items or services.”
In short, the GL authorizes all transactions to Afghanistan and its governing institutions provided those transactions do not involve financial transfers to the Taliban or the Haqqani Network – the groups specifically targeted in U.S. sanctions. However, it does allow for the payment of taxes, fees, duties, permits, licenses, and utilities to the Taliban and the Haqqani Network, so long as such payments are not for luxury items or services. This recognizes that there are some minimal transactions that are often necessary to facilitate essential humanitarian and other civil society services.
This GL represents a broader approach by the administration than it has taken with previous Afghanistan GLs, allowing a broad range of transactions in Afghanistan that are often prohibited in sanctioned contexts, and comes as a welcome step for civil society organizations operating in the country.
However, the GL explicitly notes that it does not reflect a change in the U.S. position on Afghanistan’s foreign reserves held in the U.S., which the administration has set aside with the intention of making half of those funds available for humanitarian purposes, and half of them available, pending litigation, for the families of 9/11 victims.
As is OFAC’s practice, alongside General License 20, Treasury published several new FAQs, and updated earlier FAQs.
Of particular note is FAQ 995, which “authorizes financial transfers to or involving all governing institutions in Afghanistan — including but not limited to the DAB [Central Bank of Afghanistan (Da Afghanistan Bank)], Ministry of Education, Ministry of Energy and Water, Ministry of Finance, Ministry of Agriculture, Irrigation, and Livestock, and Ministry of Public Health… OFAC does not view financial transfers to governing institutions in Afghanistan or state-owned or -controlled companies and enterprises in Afghanistan as financial transfers to the Taliban, the Haqqani Network, any entity in which the Taliban or the Haqqani Network owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, or any blocked individual who is in a leadership role of a governing institution in Afghanistan.”
Experts at the United Nations, aid groups and human rights groups have cited the freezing of Afghanistan’s foreign reserves as a major contributor to Afghanistan’s humanitarian crisis, as well as a major impediment to an effective humanitarian response. In a story responding to this latest general license, the New York Times reported that “the U.S. government had been exploring ideas for restarting some normal central bank activities if the bank can be made truly independent, with controls to prevent money laundering and third-party monitoring.” What exactly that might look like, particularly if the Afghanistan Central Bank’s access to its foreign reserves remains blocked, is an open question.
C&SN will continue to monitor and report on the situation in Afghanistan with respect to the ability of civil society organizations to operate effective programs to address the current crisis in the country.