US Treasury Tells Banks They Can Process Aid Payments to Afghanistan

International banks got the go-ahead from the U.S. Treasury Department to allow money transfers to Afghanistan for humanitarian purposes on Wednesday (Feb. 2), adding that aid groups can pay teachers and healthcare workers at state-run institutions without issue, Reuters reported.

The Treasury offered its guidance on exemptions on the sanctions issued in September and December for those who were concerned about breaching sanctions on the Taliban by sending financial assistance to Afghanistan.

The United Nations says more than half of the country’s 39 million residents suffer extreme hunger and the economy, education and social services are facing collapse, per Reuters.

U.N. Secretary-General Antonio Guterres last week warned Afghanistan was “hanging by a thread” since the Taliban took over the nation in August from Afghanistan’s government. Officials froze billions of dollars in Afghan central bank reserves and international development aid to keep it from the Taliban.

According to the report, the Treasury told banks they can safely process transactions related to humanitarian operations, “including clearing, settlement and transfers through, to, or otherwise involving privately owned and state-owned Afghan depository institutions.”

In permitted transactions involving the Taliban and blacklisted Haqqani Network, banks are also allowed to sign agreements to provide aid directly to Afghani residents, offer general aid coordination and assist with office space sharing arrangements.

“Payments of taxes, fees or import duties to, or the purchase or receipt of permits, licenses, or public utility services from” these entities — or any other in which they own more than half — is OK for humanitarian undertakings, the Treasury said.

Groups can send cash to Afghanistan for humanitarian operations and make direct payments to healthcare workers and teachers in public hospitals and schools, according to the report.

See also: UN Calls for Support Before Afghani Banks Collapse

In November, the U.N. Development Programme (UNDP) warned its members there could be a “colossal” impact if the banking system collapses, along with the social impact related to the crumbling of the economy.

In late August, PYMNTS reported that the Taliban takeover saw “drastic” money shortages in the country, with Taliban commanders ordering the banks to close in a bid to stop the fall of the banking system.