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The Biden administration froze Afghan government reserves held in U.S. banks on Sunday, blocking the Taliban from accessing billions of dollars shortly after the group seized the capital city of Kabul, leaving the U.S.-backed government in collapse, FOX Business confirmed.
Treasury Secretary Janet Yellen and officials in the Treasury Department's Office of Foreign Assets Control made the decision, according to The Washington Post, which first reported the news. The State Department was also involved in discussions over the weekend, with White House personnel are monitoring the developments.
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"Any Central Bank assets the Afghan government have in the United States will not be made available to the Taliban," an administration official told FOX Business.
The Afghanistan Central Bank holds total assets of about $10 billion assets – $7 billion of which are stashed with the Federal Reserve Bank in New York. The Taliban on Monday tapped Haji Mohammad Idris as acting governor of the bank to help restore the nation's war-crippled economy, with government workers unpaid, businesses closed and the growing cost of necessities like food and fuel.
The move – which is designed to cut off the Taliban from billions of dollars in U.S.-based reserves – is the first in a number of critical decisions facing the Biden administration as it grapples with the Taliban's return to power.
Afghanistan, already one of the poorest countries in the world, is heavily dependent on American aid.
Asked last week what actions the U.S. intends to take to ensure the safety of women in Afghanistan, White House national security adviser Jake Sullivan said "there are obviously issues related to sanctions." He declined to elaborate further.
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"I want to be able to have our team communicate directly to the Taliban both what the costs and disincentives are for certain types of action and what our expectations are," Sullivan said.
In a speech last Monday, President Biden appeared to commit to continuing to give aid to Afghanistan, saying: "We will continue to support the Afghan people. We will lead with our diplomacy, our international influence and our humanitarian aid."
The Biden administration did not need new authority to freeze the reserves, because the Taliban already faced sanctions from an executive order signed after the Sept. 11 terrorist attacks, said Adam Smith, a former Obama administration official who served on the National Security Council and as senior adviser to the director of the Office of Foreign Assets Control.
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About 80% of Afghanistan’s budget is funded by the U.S. and other international donors, John Sopko, the special inspector general for Afghanistan reconstruction, told Reuters in the spring.
FOX Business' Edward Lawrence contributed to this report