Biden administration eases restrictions on those doing business in Afghanistan

The U.S. government will ease restrictions for private companies and others looking to do business in Afghanistan in an effort to provide a much-needed infusion of funds into its crippled economy.

The measure is the seventh so-called general license from the Treasury Department designed to aid Afghanistan, clarifying the institutions and sectors of the Afghan government with which entities can do dealings without violating sanctions in place on the Taliban or the Haqqani network, which remain designated as terrorist organizations.

“The license will ensure U.S. sanctions do not stand in the way of transactions and activities needed to provide aid and support the basic human needs of the people of Afghanistan. They reflect our deep commitment to support the people of Afghanistan during this ongoing humanitarian and economic crisis,” a senior administration official said on a call with reporters.

Prior general licenses issued by the Treasury Department largely outlined how nonprofits could provide humanitarian assistance within the country.

Friday’s license covers sectors including personal and commercial banking, infrastructure development and maintenance, commercial trade, safety and maintenance operations for transportation systems, and telecommunications.

Afghanistan’s already struggling economy has been in a tailspin following the U.S. exit from the country.

Roughly 75 percent of public expenditures were previously covered by foreign aid, and even in 2020, half the country was living in poverty prior to the withdrawal.

“Six months after the takeover by the Taliban, Afghanistan is hanging by a thread,” United Nations Secretary-General António Guterres said last month.

“For Afghans, daily life has become a frozen hell. We need to jump-start Afghanistan’s economy through increased liquidity. We must pull the economy back from the brink.”

Food is scarce, and there have been electricity shortages as well.

Afghan teachers hadn’t been paid for months, though the U.N. just committed to providing them a two-month stipend.

The latest effort to infuse cash into the Afghan economy comes as President Biden was heavily criticized for freezing $7 billion from the Afghan central bank deposited in New York, releasing only half of it to be used for humanitarian aid while setting aside the other half for the families of 9/11 victims.

Under the latest measure, companies interested in doing business in Afghanistan can deal directly with civil servants without violating prohibitions laid out in sanctions.

“[We’re] making it very clear that you can continue to make commercial transactions in Afghanistan, as well as transactions with government individuals who aren’t blocked,” the senior administration official said.

The U.S. still has broader issues with the Afghan banking system, including previous demands for its central bank to bring in an independent third party to evaluate some of its functions.

“I’ll say that we have a range of really tough problems when it comes to fundamentally easing the economic crisis underway that we can’t solve by ourselves. And some are frankly unsolvable,” another administration official said on the call.

—Updated at 5:56 p.m.