The Shape of Things to Come: "Executive Order on Protecting Certain Property of Da Afghanistan Bank for the Benefit of the People of Afghanistan (11 February 2022)"

 

 

 On 11 February 2022 US President Biden issued Executive Order on Protecting Certain Property of Da Afghanistan Bank for the Benefit of the People of Afghanistan. As described by US officials:

The E.O. will block property of [Da Afghanistan Bank]DAB held in the United States by U.S. financial institutions and require U.S. financial institutions to transfer this property into a consolidated account held at the Federal Reserve Bank of New York. The Administration will seek to facilitate access to $3.5 billion of those assets for the benefit of the Afghan people and for Afghanistan’s future pending a judicial decision. . . The E.O. is designed to provide a path for the funds to reach the people of Afghanistan, while keeping them out of the hands of the Taliban and malicious actors. (FACT SHEET: Executive Order to Preserve Certain Afghanistan Central Bank Assets for the People of Afghanistan")

But expect workarounds.

JPMorgan Chase repeatedly blocked her attempts to transfer money, she said, and she grew increasingly alarmed by students who said they couldn’t access cash at local Afghan banks — many of which have closed or imposed strict withdrawal limits. In response, she turned to cryptocurrency to provide monthly emergency payments to help students afford enough food to survive. . . There are several advantages to using crypto: Afghans fleeing the Taliban can take their assets with them without risk. Humanitarian agencies seeking to bypass banks and discreetly avoid the Taliban can provide cash directly to those in need. Smugglers and intermediaries who may steal or try to resell aid packages can be circumvented if aid is given directly through a digital transaction. (Starving Afghans Use Crypto to Sidestep U.S. Sanctions, Failing Banks, and the Taliban (19 January 2022); see also Central Bank of Iran to Aid Traders Making Sanction-Busting Crypto Payments).

All of this has substantial implications for what may be coming in the form of sanctions against the projected Russian invasion of Ukraine and the expected annexation of portions of that state and the domestication of the rest.  It also suggests the limits of these "after the fact" actions. One assumes that preparations are already well underway to shift the wealth of Ukraine out from under the potential control of either Russian forces or of locals acting as agents for an otherwise invading force. Of course, all of this is conjecture.  For the moment all one has is the very public narrative management of the parties and the movements of resources that are revealed form time to time.

The text of the Executive along with the White House issued "FACT SHEET: Executive Order to Preserve Certain Afghanistan Central Bank Assets for the People of Afghanistan" (February 11, 2022) follow below.

Executive Order on Protecting Certain Property of Da Afghanistan Bank for the Benefit of the People of Afghanistan

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301 of title 3, United States Code,

I, JOSEPH R. BIDEN JR., President of the United States of America, find that the widespread
humanitarian crisis in Afghanistan — including the urgent needs of the people of Afghanistan for food security, livelihoods support, water, sanitation, health, hygiene, shelter and settlement
assistance, and COVID-19-related assistance, among other basic human needs — and the
potential for a deepening economic collapse in Afghanistan constitute an unusual and
extraordinary threat to the national security and foreign policy of the United States. 

I hereby declare a national emergency to deal with that threat. In addition, I find that the preservation of certain property of Da Afghanistan Bank (DAB) held in the United States by United States financial institutions is of the utmost importance to addressing this national emergency and the welfare of the people of Afghanistan. I also understand that various parties, including representatives of victims of terrorism, have asserted legal claims against certain property of DAB or indicated in public court filings an intent to make such claims. This property is blocked under this order.

Accordingly, I hereby order:

Section 1. (a) All property and interests in property of DAB that are held, as of the date of this order, in the United States by any United States financial institution, including the Federal Reserve Bank of New York, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in, except as set forth in subsections (b) and (c) of this section.
(b) United States financial institutions shall promptly transfer the blocked property described
in subsection (a) of this section into a consolidated account held at the Federal Reserve Bank of New York.
(c) The prohibitions in subsection (a) of this section apply except to the extent provided by
statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.

Sec. 2. This order and actions taken pursuant to this order shall apply notwithstanding any
previously issued Executive Order to the extent such order blocks, regulates, or otherwise affects the property and interests in property identified in section 1(a) of this order. This order and actions taken pursuant to this order shall supersede any previously issued Executive Order to the extent such order blocks, regulates, or otherwise affects the property and interests in property identified in section 1(a) of this order.

Sec. 3. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is
prohibited.

Sec. 4. For the purposes of this order:
(a) the term “Da Afghanistan Bank” or “DAB” means the Central Bank of Afghanistan;
(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group,
subgroup, or other organization; and
(c) the term “person” means an individual or entity.Sec. 5. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds and other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of the blocking of property and interests in property set forth in section 1(a) of this order.

Sec. 6. The Secretary of the Treasury, in consultation with the Secretary of State and the
Attorney General, is authorized to take such actions, including the promulgation of rules and
regulations, and to employ all powers granted to the President by IEEPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may, consistent with
applicable law, redelegate any of these functions within the Department of the Treasury. All
executive departments and agencies of the United States shall take all appropriate measures
within their authority to implement this order.

Sec. 7. Nothing in this order shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, and contractors thereof.

Sec. 8. The Secretary of the Treasury, in consultation with the Secretary of State, is authorized
to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec. 9. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the
availability of appropriations.(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its
departments, agencies, or entities, its officers, employees, or agents, or any other person.

JOSEPH R. BIDEN JR.
The White House,
February 11, 2022.