9/11 victims denied right to claim compensation from $3.5bn in frozen Afghanistan assets

A US district court judge refused to allow victims of the 9/11 terrorist attack to seize assets worth $3.5bn (£2.8bn) belonging to Afghanistan’s central bank, citing the illegitimacy of the Taliban rule which is not recognised by the Joe Biden administration.

Judge George Daniels said he was “constitutionally restrained” from finding that the Taliban was Afghanistan’s legitimate government. He said allowing victims to seize those assets would amount to ruling that the caretaker hardline Islamist rulers are the country’s legitimate leaders.

"The judgment creditors are entitled to collect on their default judgments and be made whole for the worst terrorist attack in our nation’s history, but they cannot do so with the funds of the central bank of Afghanistan," Judge Daniels wrote.

He added: "The Taliban – not the former Islamic Republic of Afghanistan or the Afghan people – must pay for the Taliban’s liability in the 9/11 attacks.”

The judge pointed out that the US courts lack power to arrive at that conclusion as the Biden administration does not recognise the Taliban as Afghanistan’s government.

No nation has vouched for the Taliban as Afghanistan’s legitimate rulers after they stormed to power and toppled the Ashraf Ghani administration in August 2021.

This judgment however has been a loss for four groups of creditors who claimed some of the $7bn worth of funds of Da Afghanistan Bank (DAB) at the Federal Reserve Bank in New York.

Stating that the money in the central bank did not belong to the Taliban, the judge said that he lacked jurisdiction over DAB under federal law as the financial institution was an instrumentality of a foreign government, and hence remained immune from such legal orders.

Afghanistan, as opposed to the Taliban, neither qualified as a "terrorist party" nor had been designated a state sponsor of terrorism, judge Daniels wrote.

He added: "Neither the Taliban nor the judgment creditors are entitled to raid the coffers of the state of Afghanistan to pay the Taliban’s debts.”

Other countries recently held about $2bn of Afghan reserves.

The lawyers representing the victims said that the ruling is “wrongly decided” and they will further appeal.

"This decision deprives over 10,000 members of the 9/11 community of their right to collect compensation from the Taliban," said Lee Wolosky, a lawyer for one creditor group known as the Havlish plaintiffs.

The other creditor groups are also planning an appeal, a separate Tuesday court filing showed.

US president Joe Biden has already ordered the setting aside of $3.5bn of the DAB funds for the security of Afghan people in an executive order last February.

In September, the US Treasury said it would move that money to a Swiss-based trust beyond the Taliban’s reach.

Around 3,000 people succumbed in the deadly terrorist attacks in Washington on 11 September in 2001, when planes were flown into New York’s World Trade Center, the Pentagon in northern Virginia, and a Pennsylvania field.