WASHINGTON: The US has issued new rules allowing most commercial and financial transactions with Afghanistan that could kick-start the paralysed economy of the war-torn country.

“To be clear, sanctions on the Taliban remain in place” but the new rules would ease the flow of humanitarian aid and commercial activities, said US Secretary of State Antony J. Blinken while announcing the new policy known as General Licence 20.

The measures would “facilitate private companies and aid organisations working with Afghan governing institutions and paying customs, duties, fees, and taxes, including institutions that are headed by sanctioned individuals,” he added.

“This new licence announcement has gotten buried in Ukraine news, but it’s big,” said Michael Kugelman, a scholar of South Asian Affairs at Wilson Centre, Washington.

Financial institutions, NGOs, international organisations, private sector companies can now make transactions with Afghanistan

“It marks a significant step to inject more liquidity into an economy on the verge of collapse — and without running afoul of sanctions.”

At an international security conference in Munich, Germany, last week, National Security Adviser Moeed Yusuf “reiterated Pakistan’s continuing call for the international community to support efforts to avert a humanitarian crisis and allow Afghans to live in peace”.

A Pakistan-China joint statement, issued after Prime Minister Imran Khan’s visit to Beijing last month, also urged the international community to “provide continued and enhanced assistance and support to Afghanistan including through unfreezing of Afghanistan’s financial assets”.

Both nations said they were “ready to discuss with Afghanistan the extension of CPEC to Afghanistan,” the statement said, referring to a multi-billion-dollar investment programme known as the China-Pakistan Economic Corridor.

Secretary Blinken clarified that financial institutions, nongovernmental organisations, international organisations, and private sector companies “can engage in wide-ranging transactions and activities in Afghanistan while complying with US sanctions”.

The sectors that would benefit from the new rules include personal and commercial banking, infrastructure development and maintenance, commercial trade, safety and maintenance operations for transportation systems, and telecommunications and information transactions, he added.

After the Aug 15, 2001 Taliban takeover of Kabul the US continued to provide humanitarian assistance and limited economic support to Afghanistan, although it blocked Afghan assets of about $7 billion in US banks.

Washington, however, took measures to ensure that Taliban rulers and other sanctioned individuals and entities do not benefit from the US financial support.

Earlier this month, the UN also issued a similar warning, saying that Afghanistan was facing a “devastating” humanitarian crisis, with more than half of the country’s population of roughly 38 million at risk of suffering food shortages.

“In light of this dire crisis, it is essential that we address concerns that sanctions inhibit commercial and financial activity,” US Deputy Treasury Secretary Wally Adeyemo said in a statement announcing the new measures. The Treasury said the measures “authorise, to the extent required, all transactions involving Afghanistan and its governing institutions that would otherwise be prohibited by US sanctions” except those that would directly benefit the Taliban or the Haqqani network.

Earlier this month, President Joe Biden split the Afghan assets in US custody between desperately needed aid for Afghans and the victims of the 9/11 attacks who are demanding compensation.

Published in Dawn, February 27th, 2022