October 6, 2021
With Afghanistan facing major economic and humanitarian crises in the wake of the Taliban’s rise to power, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on October 5, 2021 entitled, “Afghanistan’s Future: Assessing the National Security, Humanitarian and Economic Implications of the Taliban Takeover.”
Witnesses testifying at the hearing included Adam Smith, a Partner at Gibson Dunn and Crutcher, a former senior advisor for the Treasury Department, and a former Director of Multilateral Affairs at the National Security Council; Sue Eckert, a Senior Associate at the Center for Strategic and International Studies, and a lecturer at the Jackson Institute for Global Affairs at Yale University; Naheed Farid, a Member of Parliament (The Wolesi Jirga) in Afghanistan; and Thomas Joscelyn, a Senior Fellow at the Foundation for Defense of Democracies.
As Eckert explained in her testimony, “Preexisting sanctions by the United States and the United Nations make an already challenging operational environment for humanitarian actors in Afghanistan even more complicated.” Because the U.S. has designated the Taliban as a Specially Designated Global Terrorist (SDGT) group, transactions with the Taliban are prohibited unless a license from the Treasury Department authorizes them. This has created serious challenges for humanitarian organizations, as well as peacebuilders and human rights defenders working in Afghanistan.
While Eckert commended the administration for issuing two general licenses to protect humanitarian activities in Afghanistan, she also noted that they were significantly narrower in the scope of activities covered than other recent licenses, for example those issued for Yemen and Ethiopia.
Eckert also cited financial challenges NGOs operating in Afghanistan are facing due to sanctions, including cash flow issues stemming from the U.S. freezing foreign reserves and suspending international assistance from the World Bank and IMF. “With such a scarcity of cash, NGOs are not able to pay suppliers, contractors, vendors, and most importantly national staff,” she explained. (In 2017, Eckert co-authored a report with Charity & Security Network staff entitled “Financial Access for U.S. Nonprofits” that addressed many of the financial access issues created by sanctions.)
With respect to the current situation in Afghanistan, Eckert called on the Office of Foreign Assets Control (OFAC) to issue additional general licenses to authorize a broader range of activities, including “services to Afghan citizens in the areas of protection and prevention (such as atrocities prevention, protection of human rights defenders, protection of religious and ethnic minorities or early warning and response systems and rights-based education initiatives), women’s rights (addressing women’s economic empowerment, support to women-led civil society, prevention of gender-based violence, etc.) and conflict and stabilization (such as community-level dialogue, conflict prevention, mediation, conflict resolution, and violence prevention at the local level).”
Similarly, Smith in his testimony encouraged the administration to consider issuing additional general licenses to allow for limited commercial activities and certain incidental transactions with the Taliban, such as utility payments, citing a precedent for such general licenses in Venezuela.
Eckert also called on the administration to clarify to whom U.S. sanctions apply in light of the Taliban takeover, to issue written assurances “that inadvertent violations will not be the basis of enforcement actions if due diligence is exercised,” to create “a safe and reliable system to move humanitarian funds into Afghanistan,” and to engage with banks and financial institutions to assure them that facilitating humanitarian transactions in Afghanistan is permissible, calls echoed by Smith in his testimony. Addressing international sanctions, Eckert also called on the administration to work with the UN Security Council and allies to protect humanitarian activities in Afghanistan.
Broadening the conversation beyond the Afghanistan context, and citing a Charity & Security Network policy memo, Eckert also called on the administration to take steps to avoid similar crises in the future, namely by restoring the humanitarian exemption in the International Emergency Economic Powers Act (IEEPA) that has been routinely cancelled in executive orders imposing sanctions, and by pursuing a standing humanitarian exemption for UN Security Council sanctions as well.
The Charity & Security Network wholeheartedly agrees with these recommendations and urges the administration to implement them as soon as possible. You can watch the full committee hearing here.