Switzerland commits to Afghanistan’s future

At the beginning of September, the Fund for the Afghan People was established in Geneva with the support of the United States and Switzerland. The purpose of the foundation is to receive, protect, preserve for the future and partially disperse part of the Afghan central bank’s assets, which are currently frozen in the US. In its role as a member of the board of trustees, Switzerland is helping to create medium- and long-term prospects for the people of Afghanistan.

Funds amounting to around USD 3.5 billion are to be used by the foundation to promote macroeconomic stability in Afghanistan, for example to service debts to international organisations or to import electricity. The money forms part of the assets of the Central Bank of Afghanistan that were frozen in the US after the fall of the Afghan government in August 2021. The board of trustees decides on the specific use of the funds and ensures that they are used in the best interests of the people of Afghanistan, that applicable sanctions regimes are respected and that the money does not benefit the Taliban.

As an impartial and credible intermediary, Switzerland provides the foundation with the appropriate legal and political framework. The FDFA and the Federal Department of Finance supported the US in an advisory capacity in the establishment of the foundation in Geneva within the framework of Switzerland’s good offices. As a member of the board of trustees, the Swiss Confederation, represented by the FDFA, will directly support the foundation’s activities, contributing its expertise in the field of finance and development. Complementing its long-standing humanitarian engagement in Afghanistan, Switzerland’s support and participation in the foundation promotes macroeconomic stability and thus medium- and longer-term prospects for the people of Afghanistan.

The board of trustees currently consists of two highly qualified Afghan economists with relevant macroeconomic and monetary policy experience, a US government representative and a representative of the Swiss federal administration.

The foundation will operate an account at the Bank for International Settlements (BIS). The BIS is an established international financial organisation based in Basel that provides financial services, including banking services to central banks, monetary authorities and international financial institutions. The BIS will act as the account-holding bank and will not be involved in the management of the foundation.

The long-term purpose of the foundation is to transfer the unused funds to the Central Bank of Afghanistan. This will only occur, however, if the latter can credibly and verifiably demonstrate that it is independent of political influence and can ensure that it has put in place appropriate controls to combat money laundering and terrorist financing, and has established proper external needs assessments and monitoring mechanisms.

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