ASEF welcomes the issuance of General License 20 which authorizes tax and other ordinary payments to the Afghan government. This will greatly facilitate regular economic activity inside Afghanistan.
Finally, after over six months, the US has clarified that regular economic activity in Afghanistan is not subject to sanctions. The Taliban and the Haqqani Network have sanctioned entities and designated them as global terrorist groups. Any money transfer to the Taliban can be construed to constitute a violation of counter-terrorism sanctions. Since the Taliban took power in Kabul on August 15th, 2021, and regular tax payments might constitute a sanctions violation. Any bank that facilitates payments to Afghanistan to any entity that will pay taxes to the Taliban risks running afoul of the US sanctions regime. As a consequence, international banks chose to “derisk” from Afghanistan, virtually stopping all transactions with any entity within Afghanistan.
In order to mitigate the adverse impacts of these sanctions, the US Treasury Department has issued a series of General Licenses (GL). The first ones, issued on September 24, allowed some limited humanitarian aid, trade in agricultural goods and medicine, and personal remittances. A second and more comprehensive set of GLs was issued on December 22, when the UN received a comprehensive GL for all its activities and a much broader range of NGO activity was allowed. In particular, the GL for the UN proved to be a game changer, greatly facilitating their work and enabling the establishment of the UN humanitarian financial corridor.
What was still missing so far was a GL that actually allows regular commercial activity. Finally, GL 20 authorizes all payments to Afghanistan and the Afghan government that comprise “taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services”.
Unfortunately, the GL will not resolve the many difficulties of the Afghan banking sector as the Afghan central bank is still dysfunctional, given that its assets are frozen and its credentials with international financial institutions have not yet been restored.
References:
https://home.treasury.gov/system/files/126/ct_gl20.pdf
https://home.treasury.gov/news/press-releases/jy0609