U.S. Will Not Release $3.5 Billion in Frozen Afghan Funds, Citing Terror Fears

The Biden administration on Monday ruled out releasing $3.5 billion in funds held in the United States back to Afghanistan’s central bank anytime soon, citing the discovery that Al Qaeda’s leader had taken refuge in the heart of Kabul apparently with the protection of the Taliban government.

The position on the funds was outlined on the one-year anniversary of the takeover of Afghanistan by the extremist Taliban militia and just over two weeks after an American drone strike killed Ayman al-Zawahri, the Qaeda leader, on the balcony of a house tied to a faction of the Taliban coalition in an exclusive enclave of the Afghan capital.

“We do not see recapitalization of the D.A.B. as a near-term option,” said Thomas West, the American government’s special representative for Afghanistan, referring to the initials for the central bank. He noted that American officials have engaged for months with the central bank about how to shore up Afghanistan’s economy but have not secured persuasive guarantees that the money would not fall into terrorist hands.

“We do not have confidence that that institution has the safeguards and monitoring in place to manage assets responsibly,” Mr. West said in a statement, previously reported by The Wall Street Journal. “And needless to say, the Taliban’s sheltering of Al Qaeda leader Ayman al-Zawahri reinforces deep concerns we have regarding diversion of funds to terrorist groups.”

Ned Price, the State Department spokesman, said the administration was searching for alternative ways to use the money to help Afghans at a time when millions are afflicted by a growing hunger crisis.

“Right now, we’re looking at mechanisms that could be put in place to see to it that these $3.5 billion in preserved assets make their way efficiently and effectively to the people of Afghanistan in a way that doesn’t make them ripe for diversion to terrorist groups or elsewhere,” Mr. Price said.

The issue of the frozen money remains one of the most sensitive questions a year after President Biden’s decision to withdraw the last American troops from Afghanistan, leading to the fall of the Western-backed government and the Taliban’s return to power. The White House has been acutely sensitive to the approach of the anniversary, anticipating that it would renew criticism of the chaotic American withdrawal and the restoration of a draconian regime of repression, especially targeting women and girls.

The operation that found and killed al-Zawahri has only accentuated the debate in recent days. Mr. Biden and his allies have argued that the success in hunting al-Zawahri down showed that the United States can still fight terrorists without a large deployment of ground troops. His critics have pointed to the operation as evidence of the fecklessness of Mr. Biden’s decision to leave Afghanistan since it showed that the Taliban is once again sheltering Qaeda figures as it did in the months and years before the attacks of Sept. 11, 2001.

Secretary of State Antony J. Blinken has said that al-Zawahri’s presence showed that the Taliban had “grossly violated” the withdrawal agreement first negotiated by President Donald J. Trump and carried out by Mr. Biden. But the administration has not explained what if any consequences it would impose on the Taliban as a result. The Taliban has denied knowing that al-Zawahri was living in Kabul with his family, even though the Haqqani clan, a terrorist faction of the government, appeared to be sheltering him.

U.S. intelligence agencies have concluded since the drone strike that while a handful of longtime members of Al Qaeda remain in Afghanistan, the group has not reconstituted a major presence there since the American withdrawal. But some counterterrorism experts said the judgment may be too optimistic.

The funds at issue on Monday are part of a total of $7 billion deposited at the Federal Reserve Bank in New York by the Afghan central bank at the time of the Taliban takeover. Mr. Biden froze the money and decided to split it in half, with one share available to the relatives of Sept. 11 victims to pursue legally and the other to be used to support the needs of the Afghan people, like for humanitarian relief.

The United States is working with allies around the world to establish an international trust fund with the $3.5 billion meant to help the Afghan people. Officials said they have made considerable progress in setting up such a trust fund but have not said when it will be created and how it will work.

The Afghan economy has collapsed in the year since the Taliban takeover, leading to mass starvation and a wave of refugees. In recent days, the United States announced that it would send $80 million to the United Nations Food and Agriculture Organization to help combat hunger in Afghanistan, as well as $40 million to UNICEF to support educating Afghan children, particularly girls, and $30 million to U.N. Women to aid Afghan women and girls seeking social protection services and running civil society organizations.