US eases trade with Afghanistan despite Taliban sanctions

The Biden administration sought on Friday to assure financial institutions and other businesses that US sanctions on the Taliban aren’t intended to interfere with trade that could help Afghanistan emerge from an economic and humanitarian crisis.

A so-called general license issued by the Treasury Department expanded the authorization for commercial and financial transactions in Afghanistan in hopes of helping Afghans but not the Taliban, senior administration officials said.

It is intended to restart some commercial activity that shut down after the fall of the the US-backed government to the Taliban in August, the officials told reporters.

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It's the latest in a series of actions by the administration aimed at alleviating a worsening humanitarian crisis in Afghanistan, where aid groups estimate that nearly 24 million people, more than half the country, face severe hunger and nearly 9 million are on the brink of starvation.

The license authorizes transactions involving Afghanistan or governing institutions in Afghanistan, with the exception of specific Taliban figures under sanctions. It "aims to ensure that US sanctions do not prevent or inhibit the transactions and activities needed to support the basic human needs of the people of Afghanistan,” US Agency for International Development Administrator Samantha Power said in a statement.

US President Joe Biden speaks during a press conference.

Conditions in Afghanistan were grim for many even before the Taliban takeover, with a long-running drought and entrenched poverty. But the situation has grown more dire because the government relied on foreign assistance for 75 per cent of its budget.

Administration officials concede that the Treasury license will have only a limited effect on businesses that are reluctant to do business in Afghanistan regardless of sanctions on the Taliban and Haqqani Network.

The Biden administration earlier this year announced more than $300 million in humanitarian aid and is working with the World Bank and other organizations to provide additional relief from money that had been previously set aside for development.

Treasury also issued general licenses to make it clear that humanitarian assistance would not run afoul of sanctions.

It also set aside $3.5 billion of Afghan government funds frozen in the US after the Taliban takeover to help the country's economy in a way that officials say has not yet been determined. One option is to use the money to re-capitalize the country's central bank if it can be run independent of the Taliban.

The remainder of the frozen funds are being held pending legal claims from relatives of people killed in the Sept. 11, 2001, attacks who have won lawsuits against the Taliban.