[Senate Hearing 117-663]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-663


 AFGHANISTAN'S FUTURE: ASSESSING THE NATIONAL SECURITY, HUMANITARIAN, 
           AND ECONOMIC IMPLICATIONS OF THE TALIBAN TAKEOVER

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

   EXAMINING AND ASSESSING THE NATIONAL SECURITY, HUMANITARIAN, AND 
      ECONOMIC IMPLICATIONS OF THE TALIBAN TAKEOVER OF AFGHANISTAN
                               __________

                            OCTOBER 5, 2021
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                  

                Available at: https: //www.govinfo.gov /

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
52-158 PDF                 WASHINGTON : 2023   



            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                    Colin McGinnis, Policy Director

                 Dan Sullivan, Republican Chief Counsel

          Dylan Clement, Republican Professional Staff Member

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        TUESDAY, OCTOBER 5, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    36

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    37

                               WITNESSES

Adam M. Smith, Partner, Gibson Dunn and Crutcher, Former Treasury 
  Department Senior Advisor and Former Director, Multilateral 
  Affairs, National Security Council.............................     5
    Prepared statement...........................................    39
    Responses to written questions of:
        Chairman Brown...........................................    74
        Senator Reed.............................................    77
        Senator Sinema...........................................    79
Naheed Farid, Member of Parliament (The Wolesi Jirga), 
  Afghanistan....................................................     8
    Prepared statement...........................................    53
    Responses to written questions of:
        Chairman Brown...........................................    81
Sue Eckert, Senior Associate and Lecturer, Center for Strategic 
  and International Studies and Jackson Institute for Global 
  Affairs........................................................     9
    Prepared statement...........................................    54
    Responses to written questions of:
        Chairman Brown...........................................    90
        Senator Reed.............................................    90
        Senator Sinema...........................................    90
Thomas Joscelyn, Senior Fellow, Foundation for Defense of 
  Democracies....................................................    11
    Prepared statement...........................................    61
    Responses to written questions of:
        Senator Sinema...........................................    91

                                 (iii)

 
 AFGHANISTAN'S FUTURE: ASSESSING THE NATIONAL SECURITY, HUMANITARIAN, 
           AND ECONOMIC IMPLICATIONS OF THE TALIBAN TAKEOVER

                              ----------                              


                        TUESDAY, OCTOBER 5, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:03 a.m., via Webex and in room 538, 
Dirksen Senate Office Building, Hon. Sherrod Brown, Chairman of 
the Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order. This hearing is in a 
hybrid format. Our witnesses, three in person, one remote. 
Members have the option to appear either in person or 
virtually. Everyone who was at the markup has checked in, in 
that order.
    Once you start speaking there will be a slight delay before 
you are displayed on the screen. I think you all know those 
rules.
    Speaking order will be as usual, that is by check-in and 
seniority, so thank you again for all of your cooperation.
    In August, we finally ended 20 years of war in Afghanistan. 
Almost 125,000 people were airlifted out of the country in a 
few short weeks, because of the skill and the courage of our 
troops and our diplomats and humanitarian workers on the 
ground.
    Today, our servicemembers are out of harm's way for the 
first time in two decades. Thousands of Afghans are starting a 
better life in this country. We welcome, as our history 
suggests, we welcome these refugees seeking freedom. Our 
country has done that for generations.
    But in the midst of the evacuation, we saw a country in 
turmoil. An Islamic State suicide bomb attack near the airport 
killed 13 U.S. troops, scores of innocent Afghan men, women, 
and children. One of them, Navy Corpsman Max Soviak of Berlin 
Heights, about 50 miles from where I live, was among those 
killed in action, and died a hero in service of his country, 
working to evacuate vulnerable Afghans and protect fellow 
Americans.
    Even after the evacuation ended, tens of thousands of 
Special Immigrant Visa applicants and other vulnerable Afghans 
remain in Afghanistan, along with many American citizens or 
legal permanent residents of the U.S., including some of my 
constituents.
    It is now clear that the agreement that former President 
Trump reached with the Taliban, which provided for the final 
phase of the U.S. withdrawal process and the release of around 
5,000 battle-hardened Taliban prisoners, was flawed. Many of 
those released Taliban prisoners contributed to the Taliban's 
quick seizure of the country. President Biden, understandably 
reluctant to keep or expand the number of American troops in 
harm's way while working out a better deal, observed that Trump 
agreement.
    It is also clear that the Biden administration and U.S. 
officials failed to anticipate the rapid fall of the Afghan 
Government. It is obvious that the execution of the withdrawal 
was flawed.
    We also now know, of course, that the Taliban never 
intended, as they claimed, to pursue a peaceful path, a more 
democratic path, with a broader Government with representatives 
from a diverse range of ethnic groups, gender, and civil 
society actors. They refuse to reject relationships with 
terrorists like the Haqqani network and al Qaeda.
    Three different Committees chaired by Banking Committee 
colleagues--Senator Menendez with Senate Foreign Relations, 
Senator Warner with Senate Intelligence, and Senator Reed with 
Armed Services--have begun thorough reviews, including a series 
of hearings to assess the many decisions, including mistakes 
made along the way by subsequent Administrations, and possibly 
by Congress, over 20 years in Afghanistan.
    What is clear is that before we send our servicemembers 
into another conflict we must make sure that military 
engagement is truly the last resort, and that we know how we 
will extricate ourselves from military conflicts before we get 
ourselves into them.
    Today the focus of this hearing is to look forward, to 
envision what we can do to address the urgent economic and 
humanitarian crisis facing the country in the wake of the 
Taliban takeover, and to assess the role of economic and 
financial sanctions and other counterterrorism tools against 
the Taliban, tools within this Committee's jurisdiction.
    With as much as 30 percent unemployment, a brain drain of 
its most capable young people, enduring deep poverty, an 
ongoing drought, the COVID crisis, and the collapse of 
Afghanistan's economy looming, the people of Afghanistan need 
help.
    We must consider how the U.S. can maintain the flow of 
humanitarian assistance and family remittances, while ensuring 
that aid does not fall into the wrong hands. This aid has been 
a lifeline to the people of Afghanistan. Millions rely on it. 
It must continue, even while we deny access to funds to 
terrorist actors like Haqqani, al Qaeda, and the Taliban.
    As we will hear today, that is no small task, but it is 
essential. The lives and livelihoods of millions of Afghans may 
depend on it. We owe them that much. And we must do this while 
protecting the security of Americans and preventing Afghanistan 
from once again emerging as a terrorist safe haven.
    The Administration has made clear the Taliban should be 
judged by their actions over time, and that any decisions 
regarding diplomatic recognition or the release of billions in 
frozen Afghan Government reserves is far off. They have a 
clear-eyed realism about who the Taliban are, while at the same 
time recognizing, along with our allies, that they control the 
Government and thus we must engage them, and when necessary, 
hold them accountable for abuses.
    If the last month is any indication, the Taliban are not 
moderating their positions. They have appointed brutal old-
guard Taliban members to serve in the interim Government, 
including the leader of the terrorist Haqqani network as 
Minister of the Interior. They have threatened, harassed, and 
attacked women and girls who were demonstrating to retain their 
hard-fought freedoms. They closed Kabul's premier university to 
women faculty and to women students. They converted the former 
Ministry of Women's Affairs into the old, notorious Ministry of 
Vice and Virtue--a pretty awful, grotesque irony.
    They have harassed, beaten, and killed journalists. They 
started a return to grisly public executions. They have 
threatened a return to public amputations. The situation grows 
more dire each day.
    We know that China, Russia, and other countries that do not 
share our values are already engaging in Afghanistan. They have 
few qualms about funds falling into the wrong hands.
    It is up to us to show the Afghan people, and people around 
the world, that the U.S. will continue to be a beacon of hope 
and a source of humanitarian relief.
    I am eager to hear today from our four witnesses, who will 
share their unique perspectives with us. We welcome you all to 
the Committee, in person and remotely, and look forward to your 
testimony.
    Senator Toomey. Thank you.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman. I also want to 
welcome our witnesses today and I look forward to hearing from 
you.
    Last month, of course, we all watched in horror as chaos 
unfolded at Kabul's airport. This Administration's flawed 
decisions resulted in catastrophic evacuation from Afghanistan. 
Responsibility for this withdrawal, notwithstanding our 
severely flawed negotiations with the Taliban under the 
previous Administration, lies with President Biden.
    To be clear, I felt at the time and still believe, that it 
was wrong for the previous Administration to negotiate with the 
Taliban to the exclusion of the legitimately elected Afghan 
Government, and to agree to a full withdrawal of U.S. troops. 
However, at least that agreement was conditioned on the Taliban 
fulfilling certain political commitments, including achieving a 
``permanent and comprehensive cease-fire,'' and agreeing upon a 
``political roadmap'' for Afghanistan's future. Since it is 
universally acknowledged that the Taliban failed to live up to 
these conditions, the Biden administration could have chosen a 
different path and adjusted their withdrawal plan without even 
having violated the prior agreement. Tragically, they did not.
    We know from recent congressional testimony that President 
Biden ignored the counsel of DoD officials to keep a military 
presence in the country longer. And we also know from recent 
media reporting that the DoD urged the Administration to begin 
the evacuation of Americans months earlier. Had the President 
listened to this advice, America could have ended, not 
continued, as the President claims, but responsibly ended our 
involvement in this ongoing war on our own terms. Instead, the 
terms of our chaotic exit were set by the Taliban, a terrorist 
group that we have been at war with for 20 years.
    Amazingly, the Administration entrusted the ``safe 
passage'' of Americans, green card holders, and vulnerable 
Afghans to evacuate the country to the Taliban, and did not 
publicly question or challenge the Taliban's threats that we 
must depart by August 31st. So it is no wonder that, contrary 
to President Biden's assertion that the U.S. would stay until 
every American was able to leave, in fact, hundreds of American 
citizens and legal permanent residents were left behind, 
including Pennsylvanians.
    One such Pennsylvanian American citizen, a mother of four, 
works at a middle school in the Lehigh Valley, where I live. 
During the evacuation operations in Kabul, she repeatedly tried 
and failed to make it to the airport. Once she was teargassed. 
Another time she nearly had her passport seized by a Taliban 
militant. She was just blocks away when the suicide attack at 
the airport killed 13 U.S. servicemembers and nearly 200 
Afghans.
    The only way she escaped Afghanistan was because a 
veterans' group operating on the ground found her, protected 
her, and got her on a flight on September 10th. It is 
unbelievable to me that a group of American civilians had to 
save this woman's life because her own Government abandoned 
her.
    And now, as a direct result of the humiliating and 
unnecessary surrender in Afghanistan, a massive humanitarian 
disaster appears likely to descend on the Afghan people.
    Today, thousands of Americans, green card holders, and 
Afghan Special Immigrant Visa applicants, who aided the U.S. 
military, and their families, are still trying to escape this 
disaster. And, of course, the Afghan people, including 
vulnerable women, girls, and minorities now face violence, 
systemic repression, and the denial of their basic rights under 
Taliban rule, something that the Afghan people have not known 
for two decades.
    The Biden administration has said repeatedly that the 
Taliban must cut ties with terrorist groups, ensure the rights 
of women and girls, conduct no revenge killings against our 
Afghan partners, and allow Americans, green card holders, and 
SIVs and their families to leave the country freely. As we will 
hear today, the Taliban is failing on all of these fronts. They 
are a brutal, murderous, terrorist group intertwined with al 
Qaeda. And yet, the Administration's current posture seems 
based on the naive hope that the Taliban will reform itself now 
that they have taken power.
    The Administration may feel pressured to provide sanctions 
relief to the Taliban to address the acute humanitarian crisis 
that is emerging in Afghanistan. But bestowing international 
legitimacy on the Taliban and allowing them access to $7.5 
billion dollars at the New York Fed would be a grave mistake. 
We must be exploring ways to help the Afghan people without 
empowering the Taliban.
    Today we will consider critical issues that will determine 
whether and how the Administration will engage with the 
Taliban, including the status of sanctions on the Taliban, 
which is a Specially Designated Global Terrorist organization, 
now that it controls Afghanistan; the interconnectedness of al 
Qaeda and the Haqqani Network and the Taliban and any new 
sanctions that should be imposed on these groups; the acute 
risk of Afghanistan becoming an epicenter of money laundering 
and terrorist financing; Treasury's policies permitting 
humanitarian aid to continue flowing to the Afghan people; the 
current and future status of the $7.5 billion in Afghan foreign 
reserves kept at the New York Fed; and Afghanistan's $500 
million in Special Drawing Rights held at the IMF.
    I look forward to hearing from today's witnesses about 
these issues.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey.
    Let me take a moment to introduce our witnesses, then we 
will turn first to Mr. Smith for his testimony.
    Adam Smith, former Treasury National Security Official, 
deep expertise in the implementation of enforcement of 
sanctions and other illicit finance tools, has some creative 
ideas on how the Biden administration might ease the suffering 
of Afghans while preserving effective sanctions on the Taliban. 
Welcome, Mr. Smith.
    Sue Eckert, former Government official now at the Center 
for Strategic and International Studies, lecturer at Yale 
University, she has worked for years on sanctions and 
humanitarian aid, especially on questions concerning bank 
derisking, where sanctions over compliance by banks may put 
humanitarian aid efforts at risk. She joins us from New York 
City.
    Ms. Naheed Farid is a member of Afghanistan's Lower House 
of Parliament, elected from Herat, chair of the Human Rights 
Civil Society Women's Affairs Committee, a member of the 
International Relations Committee. She has been a fierce 
advocate for the rights of women and gender equality in her 
native country. She was forced to flee with her family after 
the Taliban takeover. We offer you an especially warm welcome. 
We admire your courage. We are honored to have you with us 
today, Ms. Farid. Thank you.
    Thomas Joscelyn is a counterterrorism expert at the 
Foundation for Defense of Democracies, senior editor of its 
Long War Journal newsletter, an expert on al Qaeda and ISIS 
around the world. Mr. Joscelyn, welcome to the Committee.
    Mr. Smith, please begin your testimony.

STATEMENT OF ADAM M. SMITH, PARTNER, GIBSON DUNN AND CRUTCHER, 
FORMER TREASURY DEPARTMENT SENIOR ADVISOR, AND FORMER DIRECTOR, 
        MULTILATERAL AFFAIRS, NATIONAL SECURITY COUNCIL

    Mr. Smith. Chairman Brown, Ranking Member Toomey, Members 
of the Committee, thank you for inviting me to the Committee to 
speak today about the economic impacts of the Taliban takeover 
of Afghanistan.
    In particular, I have been assessing the implications of 
the Taliban's unique status as an entity that has not only 
assumed control over a country but also remains subject to 
sanctions. I am not aware of such a combination of sanctions 
and control over a country ever having occurred before.
    I have submitted written testimony to the Committee, and I 
wanted to use this brief time to provide a brief overview of my 
assessment. As the Committee is well aware, the economic 
situation in Afghanistan was precarious even before the Taliban 
took over. Eighty percent of the country's GDP comes from 
donors. More than half of the population rely on humanitarian 
aid. Winter is coming and thousands will likely die.
    The Taliban's takeover has exacerbated this situation. They 
have limited access to any assistance that remains, and their 
status as a sanctioned party has essentially frozen them out of 
access to any of Afghanistan's official assets abroad. The 
result is a brewing balance of payments crisis and a potential 
economic meltdown, as the country runs out of hard currency.
    Despite the difficulties created by the Taliban's 
sanctions, I have heard no serious considerations that the 
entity should be removed from the sanctions list, and 
rightfully so. Consequently, U.S. sanctions policy must 
continue to work to limit flows and benefits to the Taliban and 
other sanctioned parties. However, it must also work to ensure 
that tens of millions of Afghani citizens are not victimized 
twice over, once by being subjected to the brutality of the 
Taliban and the second time by being denied access to basic 
needs.
    Such a dual policy is not altruistic, or at least not 
solely altruistic. We know that without support Afghanistan 
could become a failed State, the population could become 
radicalized, heroin production could return to being the only 
viable commercial endeavor in the country, and, of course, 
China and Russia may have an open door into the country. Any of 
these outcomes, let alone all of them, could be deleterious to 
our national security interests and the interests of our 
allies.
    How should the Administration balance these competing 
interests, prevent flows to Taliban, while simultaneously 
encouraging certain dealings by private and public sector 
actors in Afghanistan that we deem critical to our national 
security interests?
    My testimony speaks to two distinct strategies. The first 
is a call for clarity regarding how the Administration views 
the current sanctions on the Taliban. And the second is a call 
for creativity, urging the Administration to use the full 
breadth of sanctions authorities, including interpretive 
guidance, licensing, maybe even some forward-leaning 
humanitarian channels in order to calibrate sanctions 
appropriately.
    Regarding clarity, there is a threshold requirement for the 
Administration to determine what the sanctions on the Taliban 
actually mean today. There are three options. The U.S. could 
view the Taliban sanctions as limited solely to those parties 
specifically identified as sanctioned. This is broadly in line 
with the model in place against Burma, since the coup in 
February of 2021. The junta has been designated, as have 
several members of the Government, and major economic actors. 
However the Government of Burma is not designated and neither 
is the State.
    The U.S., alternatively, could view the Taliban designation 
as extending to the Government of Afghanistan that they now 
control but not to the State of Afghanistan. That is similar to 
the model in place in Venezuela in which the Maduro regime is 
designated but the country of Venezuela is not sanctioned.
    And finally, the U.S. could view the sanctions against the 
Taliban as extending to the Government and the State, which, of 
course, is akin to the model we have in place against Iran.
    As for which interpretation is preferable the more limited 
approaches in place against Burma and Venezuela probably are 
the ones that provide the most flexibility. But the reality is 
that any of these approaches could provide the policy outcomes 
that are needed, so long as commensurate authorizations and 
interpretations are provided.
    My second strategy is a call for creativity. The 
Administration could deploy more authorizations and licenses to 
allow the private sector to assist in promoting U.S. interests. 
Presently, the Treasury has issued two general licenses, 
regulatory exemptions to deal with the Taliban and the Haqqani 
Network.
    If the Administration seeks to limit the flow of funds to 
the Taliban and Haqqani Network while promoting the benefits to 
the Afghani people, more general licenses are going to be 
needed. In Venezuela, for example--where the Government is 
sanctioned but the State is not--there have been over 30 
regulatory exemptions issued in order to limit the exposure of 
the average Venezuelan to the sanctions imposed on the Maduro 
regime.
    Second, the Administration could develop a humanitarian 
channel, a process that was started in the context of Iran. In 
such a model, if a party provides the U.S. Government diligence 
and information, the Administration could provide an assurance 
that the U.S. Government finds the channel is not problematic 
from the perspective of sanctions.
    Third, creativity is needed with respect to Afghanistan's 
funds overseas, which include the funds in the Federal Reserve, 
the Special Drawing Rights at the IMF, et cetera. In this 
regard, the Administration could also borrow some lessons from 
Iran sanctions. In the Iran model, certain Iranian funds are 
immobilized abroad, outside of the country in financial 
institutions, and cannot be repatriated. However, they can be 
used under supervision for approved bilateral trade, 
principally humanitarian and benign consumer goods. I think 
this model could be of interest in Afghanistan--it would allow 
the people of Afghanistan to potentially benefit from these 
funds while leaving the funds themselves outside the reach of 
the Taliban.
    The Administration needs to leverage the flexibility of 
sanctions. There is clear limit, regulatorially or 
precedentially, about the creativity of how one can implement 
sanctions. And leaning in in this regard is not just a moral 
approach but very much an approach that we need to pursue in 
order to achieve our core foreign policy and national security 
interests.
    I look forward to your questions.
    Chairman Brown. Thank you, Mr. Smith.
    Ms. Eckert joins us from New York City. Ms. Eckert, 
welcome.
    Ms. Eckert. Thank you. Chairman Brown, Ranking Minority 
Member Toomey, and other Members of the Committee. It is an 
honor to [audio interruption].
    Chairman Brown. We have lost you, Ms. Eckert. Something 
happened on your end.
    Ms. Eckert, until we can fix this jointly we will move on 
to the next witness. Sorry about that.
    Ms. Farid, welcome again. You are recognized for 5 minutes.

  STATEMENT OF NAHEED FARID, MEMBER OF PARLIAMENT (THE WOLESI 
                      JIRGA), AFGHANISTAN

    Ms. Farid. Thank you for having me and inviting me to this 
Committee. Chairman Brown, Ranking Member Toomey, Members of 
Congress, my name is Naheed Farid. I am a member of Afghanistan 
Parliament representing the people of Herat, which is my 
hometown. I have served in Parliament for more than 11 years, 
and since 2019, I have been the Chairperson of the Human Rights 
Civil Society and Women's Affairs Commission. And here in 
Washington, DC, I am on the advisory board of the U.S.-Afghan 
Democratic Peace and Prosperity Council.
    I appear before you today still in shock that the Taliban 
and the Haqqani Network and al Qaeda have taken over 
Afghanistan. For years, my family and I have faced death 
threats from the Taliban. I cannot count how many friends and 
colleagues I have lost to Taliban violence.
    A week before they took Kabul, the Taliban entered Herat, 
found my house, searched for my family. Luckily, my family and 
I were able to escape, but we just left everything behind.
    For Afghan women of my generation, we remember the Taliban 
from the 1990s. This sudden takeover of the country brings back 
so many of the nightmares. When I was a girl growing up in 
Herat, I loved going to school, becoming a pilot 1 day. When 
the Taliban took control of Herat, they shut down the schools, 
and I was forced to spend all of my time at home with my female 
relatives.
    Today what we, as Afghan women, have known all along is 
clear for the world to see. The Taliban cannot be trusted. 
Afghan women and girls face blatant gender apartheid by 
Taliban, and a return to the 1990s. The Taliban have stripped 
most women of the ability to work. Girls cannot participate and 
attend secondary schools. Young women who grew up in a free and 
open society are now hiding in fear.
    Make no mistake. The Taliban govern through fear. Their 
soldiers indiscriminately whip civilians in the street. They 
have resumed public executions and mutilations. They have 
committed forced displacements and atrocities against Tajiks 
and Hazaras in Panjshir, Daikundi, and other places of 
Afghanistan. They have curbed free speech and decimated 
Afghanistan's once-thriving media sector that we had.
    So how can Congress help the Afghan people? I have had so 
many meetings with Members of Congress these past few years and 
I know so many of you feel a deep bond with the Afghan people, 
a deep bond with Afghan women. And what the Afghan people need 
right now are three things: one, immediate humanitarian 
assistance; two, legislation that prohibits U.S. recognition 
and normalization of relations with the Taliban; and three, 
support for local NGO's and civil society who can deliver basic 
services in the absence of a normal Government.
    Afghanistan faces a dire humanitarian crisis. Because of 
the health care system collapse, many internally displaced 
persons, and widespread food insecurity in the winter that is 
coming, without outside assistance, more Afghans will suffer 
and more Afghans will die. But the Taliban cannot be allowed to 
set terms and conditions on how this humanitarian assistance is 
delivered and who it is delivered to. Humanitarian corridors 
need to be established where international and local NGO's can 
do their work without any interference from the Taliban.
    The Taliban regime cannot be trusted. Because of their 
hardline beliefs and their partnership with dangerous terrorist 
groups, the Taliban pose an imminent threat to the region and 
to the world. I urge the Members of this Committee to support 
legislation that prevent any U.S. Administration from 
recognizing the Taliban and normalizing any relations with 
Taliban. I encourage the Members of this Committee to act 
quickly, in a bipartisan way, to draft and pass legislation 
that encourage no U.S. Administration ever recognizes the 
Taliban. Not only can the Taliban regime be trusted, it also 
has minimal capacity for governance.
    We are witnessing the breakdown in basic services such as 
health care, education, banking and finance, aviation, and many 
others. The U.S. should not provide the Taliban with capacity-
building support. Instead, the U.S. should provide direct 
support to Afghan NGO's and civil society. As someone with a 
background in nonprofit management and a family foundation that 
has built many schools for girls throughout Afghanistan, I know 
firsthand how valuable local NGO's are to so many ordinary 
Afghans, especially to women and girls. The U.S. Government 
must find ways to provide funding, capacity-building, and also 
support to these local organizations and NGO's through a ready, 
trusted corridor.
    I will stop here, and I am looking forward to the 
questions. Thank you
    Chairman Brown. Thank you very much, Ms. Farid.
    We will return to Sue Eckert, Ms. Eckert, in New York.

STATEMENT OF SUE ECKERT, SENIOR ASSOCIATE AND LECTURER, CENTER 
 FOR STRATEGIC AND INTERNATIONAL STUDIES AND JACKSON INSTITUTE 
                       FOR GLOBAL AFFAIRS

    Ms. Eckert. Thank you, Mr. Chairman, Ranking Member Toomey, 
and Members of the Committee. It is an honor to appear before 
you today. I am only sorry I cannot join you in person, but 
there are meetings at the U.N. Security Council and with member 
States to talk about the future of the al Qaeda, ISIL, and 
Daesh Committee this year, that I am involved with.
    Thanks to the Committee for focusing on this very important 
topic, which is critical not only for U.S. security and foreign 
policy but to the lives of millions of Afghan citizens.
    Adam has laid out very well the sanctions situation as it 
applies to Afghanistan, so I want to take my brief time to 
focus on five points.
    The first is, as our previous speaker just noted, the dire 
and deteriorating humanitarian crisis in Afghanistan. Second, 
the need for additional measures by OFAC, to support NGO's and 
to continue their programs in support of the Afghan population. 
Third, the importance of action at the U.N. Security Council to 
ensure continuation of humanitarian assistance into 
Afghanistan. Fourth, the need for international action to 
create secure and safe channels to move funds into Afghanistan 
to support NGO's in the near term. And fifth, to take this 
opportunity to review the U.S sanctions system overall, and 
improve the process to restore humanitarian exemptions and 
prevent similar situations in the future.
    First, the humanitarian situation. As noted, even before 
the Taliban took control, Afghanistan was experiencing one of 
the worst humanitarian crises in the world. Between COVID, 
climate change, the 2021 drought, and persistent insecurities 
and violence, Afghanistan has been in dire need. Over half the 
population of Afghani citizens are in need of humanitarian 
assistance. Food security is deteriorating rapidly, with only 5 
percent of households consuming adequate levels of food. Recent 
reports are that 3 out of 4 households now limit portion sizes, 
with adults eating less so their children can eat more.
    The health system is rapidly deteriorating. With decreasing 
access to health care there is more measles, diarrhea, and 
polio, and less resources to respond to the COVID situation. As 
the World Health Organization noted, 17 percent of over the 
2,300 health facilities previously supported by international 
assistance are suffering and are not fully functional. Two-
thirds of these facilities have run out of essential medicines.
    David Beasley, former U.S. Congressman and now Executive 
Director of the World Food Programme, has pleaded that the time 
is now. We cannot wait 6 months. We need action now, before the 
winter sets in.
    Second, the sanctions situation complicates the delivery of 
aid, but there are steps that can be taken to clarify and 
alleviate some of these challenges. The Biden administration 
issued new general licenses that are very welcomed and very 
important steps.
    But there is need for additional moves to continue delivery 
of assistance. Here we need to extend authorization beyond just 
basic humanitarian needs to other programs supporting Afghan 
citizens, and for which the international community has devoted 
years and billions of dollars supporting.
    In addition there is need for clarification as to who the 
Taliban is, as Adam discussed previously.
    Third, the U.N. Security Council needs to safeguard the 
continuation of humanitarian action. The Security Council 
resolution adopted on August 30th called for strengthened 
efforts to provide humanitarian assistance and the support of 
all donors.
    But there is need for additional action now. Guidance that 
sanctions are not intended to impede humanitarian action and 
that member States must implement these measures consistent 
with their commitments under international humanitarian law is 
one step, but there is a need for a humanitarian carveout, to 
ensure that these activities and humanitarian assistance can 
continue. In that regard, the current exception that exists in 
the U.N. Somalia sanctions regime represents a very good model.
    Fourth, we need to develop new ways for funds to get into 
Afghanistan. It is going to be months before the financial 
system stabilizes and international payments can be regularized 
to NGO's. In the meantime, we need a safe and reliable system 
to move humanitarian funds in.
    In the medium term, we need to deal with financial 
institutions to provide the kind of incentive assurances for 
them to continue to support NGO operations. As Adam said, we 
need to think creatively about ways to address these derisking 
issues.
    Finally, this crisis brings into stark relief some of the 
systemic challenges that exist and as such, provides 
opportunities to improve the U.S. and the U.N. sanctions 
processes to safeguard humanitarian action through exceptions. 
Time after time, we have faced this situation. Just this year 
humanitarian organizations faced with the threat of being 
forced to withhold humanitarian assistance from Yemen following 
the designation of Ansarallah in January. Situations in Burma, 
Ethiopia, and Afghanistan demonstrate the need for systemic 
reform to create standing carveouts for humanitarian action. 
And in this regard we need to seriously look at restoring the 
IEEPA exemption, which is contained in the act that the 
Committee passed a number of years ago, but which has been 
routinely waived.
    These recommendations do not assume that any of this is 
necessarily easy, and we need to be realistic about the 
situation in Afghanistan, which is extremely complicated for 
NGO's working there. But I think that the overwhelming 
imperative is to act now, consistent not only with our 
humanitarian and human rights values but with our national 
security and foreign policy interests as well.
    Thank you very much, Mr. Chairman.
    Chairman Brown. Thank you, Ms. Eckert.
    Mr. Joscelyn is recognized for 5 minutes. Thank you for 
joining us.

  STATEMENT OF THOMAS JOSCELYN, SENIOR FELLOW, FOUNDATION FOR 
                     DEFENSE OF DEMOCRACIES

    Mr. Joscelyn. Well, Chairman Brown, Ranking Member Toomey, 
thank you for inviting me to testify here today. You know, I 
have done this a number of times. Unfortunately, in the past, I 
was warning about the impending security situation or fall of 
the Afghan Government. Now we are dealing with the aftermath, 
of course.
    And what I want to focus on here today is that many of the 
factors that we focused on for years at Long War Journal, that 
led to the collapse of the Afghan Government and the victory 
for the Taliban and, indeed, al Qaeda, are still relevant for 
the discussions and debates you are going to be having today 
and in the future.
    In particular, I am going to make three quick points. The 
first one is that as you, Chairman Brown and Ranking Member 
Toomey, both recognize, the Taliban's relationship with al 
Qaeda is unbroken. We heard that from the generals last week 
when they testified here on the Hill. We have heard that from 
Secretary of State Blinken.
    I think that is a remarkable fact, if you think about it, 
right. After 20 years of war and more than 10 years of on-
again, off-again diplomacy led by the U.S. with the Taliban, 
during which time the State Department and the military were 
desperate to have the Taliban throw al Qaeda under the bus, 
they did not, right. They stood by them this whole time. That 
is a remarkable fact, and if you think about it, why is that? 
Why is it that after all these years, going back, in fact, to 
even the 1990s when the U.S. Government first started trying to 
pressure the Taliban to break with al Qaeda, why is it that 
after a generation they have not?
    And I think the answer is that there is a lot more to that 
relationship than many people realize, a lot more to that 
relationship than people in the U.S. Government realize. And I 
am going to give you a few details along those lines.
    But before I move on to my second point, I want to note 
that in early September the Taliban, after they took over 
Afghanistan, they took over, of course, all the media outlets, 
and one of the things they did, when they controlled the media 
in Afghanistan, was they broadcasted a video called 
``Victorious Force 3.'' I suggest if you look at some of my 
testimony or some of the stuff I post online you can watch it, 
and I suggest everyone does. Because they are still saying, no, 
in 2021, that we deserved to be attacked on 9/11. That is the 
official Taliban line. That has been the Taliban's line since 
Mullah Omar first uttered it on September 26 of 2001, for 20 
years now, unbroken. For 20 years straight they have said that 
America deserved to be attacked on 9/11. That is remarkable.
    The second point I want to talk about is that the Taliban's 
regime is an authoritarian regime. The new Taliban is, in fact, 
just the old Taliban in many ways. In fact, as I was preparing 
my written testimony today I was struck by the fact that one of 
the guys I included in my write-up is a guy named Hassan 
Akhund. He has been named the Head of State, or so-called Prime 
Minister of the Taliban regime. Of course, he is not really a 
prime minister, is he? They do not really work that way. But 
that is the title they gave him in some of the press reporting.
    But Akhund was actually first sanctioned by the U.N. in 
early 2001, 8 months before 9/11, and it was Akhund who, on 
behalf of the Taliban, rejected the first overtures by the U.N. 
to get the Taliban to turn over Osama bin Laden. In fact, in 
1999, it was Akhund who said, when the U.N. demanded that bin 
Laden be turned over, it was Akhund who answered on behalf of 
the Taliban and said, ``In fact, we will not turn over Osama at 
any price.'' Those are his words.
    The Interior Ministry of this authoritarian regime is 
controlled by Siraj Haqqani. Chairman Brown, you mentioned 
that. Siraj Haqqani, you can look at my testimony, he is an al 
Qaeda man. There is this idea that the Taliban is one thing, 
the Haqqanis are another, and al Qaeda is a third thing. That 
model has been wrong all along. The Haqqanis have a controlling 
interest in the Taliban. They always did. The Haqqanis play a 
lead role in controlling hierarchical positions throughout the 
Taliban, and, in fact, the special forces of the Taliban, that 
won the war, including the suicide bombers who played such a 
prominent role in defeating Afghan forces in America and 
Afghanistan, were run by the Haqqanis, and we can get into that 
a little bit more, what that means, because it actually plays 
out in terms of the security around the airport in Kabul, 
involved an Haqqani special forces outlet that actually 
specializes in suicide bombings. Very spooky, actually.
    So the Interior Ministry is run by Siraj Haqqani and his 
family, which has been in bed with al Qaeda since the 1980s. In 
fact, they incubated and helped build al Qaeda. The 
Intelligence Ministry is run by another guy, known as Abdul Haq 
Wasiq, who was a former Guantanamo detainee. He too was 
sanctioned in early 2001 by the U.N. before 9/11, and he was 
sanctioned, why? Because he, as the deputy head of intel at 
that point for the Taliban actually oversaw foreign fighters 
for al Qaeda coming into the country and helped protect al 
Qaeda's training camps.
    So if you think of this as an authoritarian regime, which 
it is, and they are going to implement their draconian version 
of Sharia on the Afghan population, as Ms. Farid can tell you 
better than anyone, and they are, the guys are actually pulling 
the levers of power for this authoritarian regime, have 
dossiers that are littered with al Qaeda references.
    The third point I would make very quick is that I, too, am 
very concerned about the Afghan people. We, of course, got to 
know quite a few of them during our time doing this, the Long 
War Journal. I would just emphasize something that Ms. Farid 
said. She said when it comes to humanitarian assistance, do not 
let the Taliban decide.
    That is a very important, powerful point, because this 
authoritarian regime here in Afghanistan, to the extent that 
any humanitarian assistance flows through the Taliban to the 
Afghan people, that will strengthen their authoritarian regime 
and legitimize their governance.
    I am very open to any of the ideas that Mr. Smith or other 
have for sort of providing carveouts around sanctions for 
humanitarian assistance, working with NGO's, as Ms. Farid said, 
and others. There are all sorts of options we can explore. But 
do not empower the Taliban's regime. Thank you.
    Chairman Brown. Thank you, Mr. Joscelyn.
    I will start my questions with Ms. Farid.
    You, for years, have been a fierce advocate for the rights 
of women and girls in Afghanistan as women have made real 
strides and emerged in key roles throughout society. Your 
leadership role as a member of the Parliament, the many able 
and distinguished Afghan women with whom you work are key 
examples.
    I know you touched on this in your opening statement but 
can you describe the current situation for women and girls 
following the Taliban takeover in urban settings like Kabul and 
provincial cities like in your home of Herat, and in rural 
settings?
    Ms. Farid. Thank you. Thank you so much. You know the 
situation in Afghanistan is very, very difficult for women. 
Like 15 million of the population of Afghanistan that are women 
think that they are abandoned and they have been forgotten. I 
mean, there was no precondition of women's rights, human rights 
in the last years of the achievements of Afghan women and 
Afghan people and Afghan democracy in the peace process with 
the Taliban. And even with the individuality there was no 
precondition. And that is the problem that people of 
Afghanistan are thinking, that why, and especially women, why, 
after 20 years, we have been forgotten at this level, at this 
level that 50 percent of the people that are women, and many 
frontrunners of the democratic process in Afghanistan, actually 
they are in a situation that they do not know where to hide. We 
had to escape instead of championing them. We actually cannot 
help them at this point. They are very helpless.
    Chairman Brown. So what more should the U.S. and our allies 
do to protect the rights of women and girls? What specifically 
should we do?
    Ms. Farid. In fact, people of Afghanistan, women of 
Afghanistan, they deserve the Government they want. They 
deserve the Government that was not enforced on them, the 
Government that they want to choose. And U.S. has to help the 
Afghan people, the Government that was not forced by 
atrocities, by violence, on the people of Afghanistan.
    This has to be the strategy, that we have to stand with the 
people of Afghanistan. And we have to be against the enemies of 
people of Afghanistan, and those who have no plan and strategy 
to help the people but they have the strategy to attack the 
rest. And they have no strategy to do the governance in 
Afghanistan. See the health care system. See the education 
system. See women. See girls. They cannot attend secondary 
schools.
    So the reality is that those syndicates, terrorist 
syndicates, that took place in Afghanistan, they have no idea 
how to govern Afghanistan. It has to be a group of NGO's, 
internal NGO's, original NGO's, international NGO's, to fill 
the gap, to fill the vacuum, and support the Afghan women to 
provide jobs for them, through capacity building, through 
providing the basic needs of health care and education to them.
    At the same time, Taliban should not decide. Taliban should 
not say who should receive this aid. Taliban should not put 
conditions on it. And this is, at least, this is the option 
that we can start with, but there have to be more options to 
explore in the future.
    Chairman Brown. Let me follow that way of thinking about 
the Taliban obviously not deciding with Ms. Eckert and then Mr. 
Smith. Same question. Treasury has issued new licenses to 
support the continued flow of humanitarian assistance to people 
of Afghanistan and other activities that support basic human 
needs while upholding and enforcing our sanctions against the 
Taliban and the Haqqani Network. What more should Treasury and 
State be considering, including with international banks, to 
ensure the people of Afghanistan continue to receive aid 
without benefiting the Taliban. Ms. Eckert first, and then Mr. 
Smith, answer that, please.
    Ms. Eckert. Thank you, Mr. Chairman. I think OFAC needs to 
issue additional general licenses authorizing NGO programs that 
go beyond basic human needs, and here we are talking about 
programs, we are talking about areas of protection and 
prevention, women's programs, conflict and stabilization, 
education. These are all programs in which the international 
community has invested billions of dollars over the last 20 
years, and they help individual Afghan people, not the Taliban.
    These programs should continue. The way OFAC has currently 
defined the general licenses, they apply to a narrow set of 
activities. I think that what we need to do is to broaden it to 
what used to exist for Yemen, Burma, and Ethiopia, through the 
broad range of NGO activities.
    Chairman Brown. Mr. Smith, can you respond to that too?
    Mr. Smith. Thank you, Chairman Brown. I think that is 
right. Licenses and exemptions need to be expanded. I gave an 
example in my opening statement that if we really want to 
expand and limit the exposure of the average Afghani, 
significantly more licenses are going to be needed.
    But outside licenses there is one other component that I 
wanted to talk about, and I mentioned it briefly in my opening 
statement, and that is what to do with, or how to leverage 
safely the funds Afghanistan has outside the country. Now we, 
of course, should not just identify them as Afghani and let 
them go. That is not wise. Apart from the issue of sanctions, 
the Taliban does not have the technical capacity to even manage 
them for the benefit of the Afghani people.
    But I do think that the Iranian model, in which there are 
funds essentially frozen overseas, in jurisdictions that 
continue to buy Iranian oil, those funds are not able to be 
repatriated to Iran but they can be used, and they are used 
with the oversight of local institutions and with the U.S. 
looking on very careful, for the provision of basically 
approved bilateral trade, which is humanitarian goods and other 
sort of goods in kind.
    I think if you focus on using these funds not to provide 
currency but rather to purchase goods for the Afghanistan 
people that could be promising. Will there be some seepage to 
the Taliban? Unfortunately I think there will be, but it is 
much, much harder to make fungible in-kind goods than just 
opening the spigots of cash.
    So I think we need to be very creative and learn the 
lessons we have learned in other jurisdictions in this context 
as well.
    Chairman Brown. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Ms. Farid, first 
of all, thank you so much for being with us today. Just very 
briefly, if you could, because I think we should be clear about 
this, you fled Herat shortly before the Taliban took the city. 
When they took the city they came looking for you and your 
family. What would they have done had you not fled and had they 
found you?
    Ms. Farid. They would have killed me.
    Senator Toomey. They would have killed you.
    Ms. Farid. Yeah.
    Senator Toomey. Mr. Joscelyn, you made a very interesting 
point, if I understood it correctly, in your written testimony. 
I think it is fair to say that you suggest that the distinction 
between the Taliban and the Haqqani Network is really a Western 
construct. It is not very meaningful to these people. They are 
so completely intertwined that it is a meaningless distinction. 
Do I have that right?
    Mr. Joscelyn. That is absolutely correct, Senator.
    Senator Toomey. So money going to the Taliban is the same 
thing as money going to a notorious terrorist network, because 
they are one in the same.
    Mr. Joscelyn. Correct. The Haqqanis have a controlling 
interest in the Taliban.
    Senator Toomey. Right. So Mr. Smith made a point that I 
think is very, very interesting and important one. One of the 
things I worry about extending licenses of all kinds, to all 
kinds of groups, to conduct all kinds of activities sounds to 
me like it is likely to include funding, and money is 
inherently fungible. I worry that it gets in the hands of the 
Taliban, one way or another.
    But goods, humanitarian goods--food, medicine, basic human 
needs--those are harder to convert into things like weapons and 
terrorist activity. So to get them there I assume entails 
significant logistical challenges, not to mention security 
challenges.
    My question really for each of you is, should the United 
States be attempting to create or encourage, facilitate, some 
kind of international peacekeeping ability to provide security 
for humanitarian corridors to delivery lifesaving goods? Does 
that make sense?
    Mr. Joscelyn and then Ms. Farid and Mr. Smith.
    Mr. Joscelyn. All I can say I would be a large sum of money 
the Taliban would not allow that. They are an authoritarian 
regime, as I said, and they are going to control the show.
    Senator Toomey. All right. Ms. Farid.
    Ms. Farid. I think besides having a peacekeeping coalition, 
United States needs to partner with a regional player, a 
regional actor, to Afghanistan. So there will be a base of 
humanitarian assistance near Afghanistan, where NGO's can 
operate, where NGO's can have staff that can collect wages 
there. I think that also is very important, that this corridor 
has to have a base around Afghanistan, in a country like 
Tajikistan.
    So we have to have partners with the United States around 
Afghanistan that can facilitate this corridor, and also this 
banking system should not operate inside Afghanistan because 
the head of central bank of Taliban is a terrorist, and any 
money that goes through Western Union, any added procedure, 
they have had, they can block, they can do anything with that 
money.
    Senator Toomey. Mr. Smith.
    Mr. Smith. Ranking Member Toomey, I think to the extent the 
establishment of the channel for physical goods is possible, 
leaving aside what Mr. Joscelyn thinks would likely happen, I 
think it is critical. Whether or not the U.S. should do it on 
its own is a different story. I do think that 
multilateralization of these efforts, especially with regional 
partners, like Ms. Farid suggests, I think is really the way 
forward, and, of course, leveraging truly multilateral 
components, be it the World Bank, be it the United Nations, 
UNDP, and others.
    So yes, I agree with you. I think that opening the spigots 
for funds is much, much more dangerous than opening the spigot 
for goods, foods, and other sorts of services that are not so 
easily fungible.
    Senator Toomey. Well, what about Mr. Joscelyn's point that 
it is unlikely that the Taliban would tolerate any foreign 
force, even one that does not have a history of antagonism, for 
instance? Is that a serious obstacle?
    Mr. Smith. I think it could be a serious obstacle, for 
sure, and I do not think we need to recognize the Taliban to 
potentially, on a transactional basis, deal with the Taliban. 
And so I think that over time, especially if the situation in 
Afghanistan gets more and more dire, there may be openings to 
allow this sort of very transactional approach to allow certain 
goods or services into Afghanistan. But it may be a while, and 
there may be some quid pro quos, that the Taliban tries to 
exert on that basis.
    Senator Toomey. Well, just to be clear, my own view is that 
it would be a monumental mistake for us to recognize the 
Taliban, and I am sympathetic to the idea that Ms. Farid 
suggested, that legislation to preclude that might make a lot 
of sense. Thank you.
    Chairman Brown. Thank you.
    Ms. Eckert. Mr. Toomey.
    Chairman Brown. Yes, Ms. Eckert. Go ahead.
    Ms. Eckert. I wanted to respond to Mr. Toomey's question as 
well. As the mandate for UNAMA, the U.N. mission in 
Afghanistan, is being considered in early 2022, the U.S. will 
have the opportunity to advocate for what kind of U.N. presence 
on the ground that we are going to have.
    I do not think that anyone is talking about turning on the 
financial spigot and handing out cash. What we are talking 
about is getting funds into the country for NGO's to pay staff, 
to buy goods that they need, and to distribute the kind of 
humanitarian assistance that we all support.
    So I do not see anyone saying that we need to either 
recognize Taliban or sanctions on the Taliban or provide any 
kind of support to the Taliban. We are talking about providing 
assistance to the Afghan people.
    Chairman Brown. Thank you, Ms. Eckert.
    Senator Warren from Massachusetts is recognized.
    Senator Warren. Thank you, Mr. Chairman.
    So I have been clear that I believe that President Biden 
made exactly the right decision to withdraw from Afghanistan. 
As General Milley testified last week, in response to my 
questions at the Armed Services hearing, another few months or 
another few years were unlikely to have changed the outcome of 
the war. And I actually looked up General Milley's words and 
brought them with me, because here is what he said. ``The end 
state probably would have been the same, no matter when our 
troops pulled out.''
    General Milley also acknowledged to me, at this hearing, 
that our troops would have been needed indefinitely in order to 
continue to prop up the Government, and that it would have been 
at great risk, not only to our troops but also to the Afghan 
people.
    So let me just ask--I have three of you here--does anybody 
disagree with General Milley's assessment? I take that as three 
head shakes no, that nobody disagrees.
    Mr. Joscelyn. I do not disagree, Senator. I mean, we have 
covered the insurgency--I have covered the insurgency for 12 to 
15 years of my life, and there is no doubt that the end state, 
you could keep pushing it off. Our suggestion, Senator, real 
quick, was that if the U.S. was leaving some years ago it was 
to leave in a way that allowed the Afghans to own the right. 
Our big critique was that across two Administrations that never 
happened. Now maybe it would have failed anyway--it probably 
would have--but at least allow them to own the fight, and I do 
not think we did.
    Senator Warren. Well, I appreciate that you want to push 
back on this, but I also asked about that question, about how 
we exited Afghanistan. And the point that the generals made, 
although there has been criticism from the Republican side of 
the house, is the military designed the withdrawal, and 
executed the withdrawal, they were given every resource and 
every bit of support that they asked for, and we faced what we 
faced, when the Government fled and when the military, the 
Afghan military, laid down their arms and melted back into the 
countryside. So they had everything they asked for in this 
withdrawal.
    You know, for years, the DoD leaders told the Armed 
Services Committee and the American people about the great 
progress that we were making. But as we know from the 
Afghanistan papers published by the Washington Post, that 
simply was not true.
    So some of our military leaders, the same military leaders 
who have basically been wrong about Afghanistan for nearly 20 
years now, wanted to leave troops in Afghanistan but leave them 
there forever, because if we brought them home the Afghan 
Government would collapse.
    Now the Republicans are trying to make this an issue, not 
because of oversight but because they think it helps them 
politically. During the Trump years, the Armed Services 
Committee only held four public hearings on Afghanistan. Over 
those 4 years, the Taliban was making steady gains, year by 
year. I do not recall this Committee ever having a hearing on 
Afghanistan before today, and I welcome our colleagues' new-
found interest in oversight over Afghanistan, but I wish they 
had been interested 5 years ago, or 10 years ago, when it might 
have made a real difference.
    The President made the right decision to withdraw. I do not 
think I am hearing any objection on that. Once he made that 
decision he followed the advice and recommendations of the 
military in executing the withdrawal. And now that we finally 
ended our military presence in Afghanistan I agree it is time 
to have a sanctions policy that does not make it more difficult 
for the Afghan people to have a chance to rebuild. That is our 
sole responsibility here.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warren. Senator Rounds 
from South Dakota is recognized.
    Senator Rounds. Thank you, Mr. Chairman. And while I was 
going to begin with a line of questioning with regards to how 
we get the relief back in to Afghans who are starving, and yet 
right now I think I have to respond a little bit. I think I was 
at all of the same meetings as my colleague from Massachusetts, 
and I came away with a slightly different approach that was 
being conducted.
    It is my understanding, in reviewing and in listening to 
the generals, three of them, who were before our Armed Services 
Committee, not just in public session but in classified 
sessions, they made it very clear that they would never 
withdraw on a date certain, and that to a person, the 
recommendations that had been provided was to do a conditions-
based withdrawal with the hopes that, first of all, it would be 
a withdrawal that was not in chaos and it would have allowed 
the Afghan Government an opportunity to continue with a reserve 
force continuing there. The conditions-based versus date 
certain would have allowed that the al Qaeda and the Taliban 
would have been held in check.
    I am just going to--and, ma'am, I am going to begin with 
you. Would you share with us, as a representative of the 
Parliament of Afghanistan, what your expectations had been with 
regard to a transfer of the responsibilities for the defense of 
Afghanistan directly to the national Government? Can you share 
what your goals had been and what happened when there was a 
date certain established?
    Ms. Farid. Thank you so much. Both questions--I want to 
answer both questions, actually. You know, the day that Doha 
agreement was signed it emboldened Taliban. Then the withdrawal 
announcement even gave them more power that demoralized the 
Afghan national security forces, and that led to more 
demoralization of the people of Afghanistan.
    OK, so there are so many factors that contributed to the 
situation, that one of them was a hasty withdrawal. The hasty 
withdrawal was one of the reasons that, unfortunately, led to 
the situation that we have right now.
    You know, the level of loss that Afghan security forces had 
was 100 casualties per day. That level of loss is unsustainable 
for any security forces in the world. It is unbelievable that 
we are losing 100 soldiers per day.
    OK. So this was the situation, unfortunately. Besides, the 
air force was grounded because of the withdrawal, because half 
of the air force had to have the maintenance that the 
contractors already left due to the withdrawal. That also 
contributed to the situation.
    And we also lost so many brave commandos, brave soldiers, 
policemen, police officers in the front line of the battle of 
fighting against global terrorism, against Taliban, al Qaeda, 
and Haqqani Network. OK, we should not forget them and we have 
to admire them.
    But at the same time, I, as a member of Parliament, and 
many in my Parliament, we used the platforms, different 
platforms, including being the advisory board of the DPPC, 
Democratic Peace and Prosperity Council. At 1 week before the 
collapse, we met with Armed Services Committee and Foreign 
Affairs Committee of the Congress, telling them about the 
pending collapse of Afghanistan.
    Factors inside of Afghanistan also contributed to the 
situation. For example, the mismanagement of the peace process 
by Afghanistan Government, President Ghani, and his national 
security advisor, the mismanagement of war before by isolating 
so many advisors and generals, and replacing them by loyalists 
that surrendered to Taliban just in the months of July and 
August also contributed to the situation.
    But here we are. We could have been in a better situation 
if the announcement of the withdrawal would not happen at the 
beginning of this seasoning of fight of Taliban. If U.S. could 
wait a few more months until the winter finished, and the 
fighting season of Taliban would have finished because so many 
other things happened that peace still happened, the withdrawal 
announcement also happened, and demoralized the situation, and 
the soldiers of the army and Afghan national security forces 
and defense forces, we would have been in a better situation.
    Senator Rounds. Thank you. My time has expired. Thank you, 
Mr. Chairman.
    Chairman Brown. Thank you, Senator Rounds. Senator Menendez 
of New Jersey is recognized.
    Senator Menendez. Thank you, Mr. Chairman. I am glad to see 
the Banking Committee is interested in foreign affairs issues, 
so good to have the hearing.
    Let me ask Mr. Smith. OFAC issued two general licenses on 
September 24th to better facilitate the flow of humanitarian 
aid to Afghanistan. How exactly do these licenses work, and how 
does the Treasury ensure that assistance does not go to the 
Taliban or the Haqqani Network?
    Mr. Smith. Thank you, Senator. Both of those are very good 
questions. The way the licenses work--or maybe to begin with, 
why the licenses are needed. Both the Haqqani Network and the 
Taliban are sanctioned parties, which means that any individual 
who is a U.S. person, U.S. company, U.S. party, non-U.S. party 
that engages on transaction through the United States, cannot 
engage with the the Taliban or the Haqqani Network without 
risking criminal and civil liability.
    These licenses allow exemptions to these broad 
prohibitions, allow certain exemptions that are specified in 
the licenses, to provide certain goods that are articulated 
within the licenses to certain individuals and certain parties. 
One of these licenses granted covers the activities of the NGO 
community, which includes not just the U.S. Government as 
Government organization but the multilateral organizations and 
nongovernmental organizations as well, providing humanitarian 
services. And then the other license is principally concerned 
with the delivery of food, foodstuffs, medicine, et cetera, as 
well.
    So both of those licenses allow activities that would 
otherwise be prohibited, namely potential transactions with 
parties that are sanctioned. Those licenses allow those 
exemptions to permit the activities that are articulated.
    It is a good question, and Ranking Member Toomey, I think, 
asked this question as well. How do you make sure that the 
benefits do not go to the Taliban? That is a great question, 
and I think the way the licenses are structured, and, frankly, 
the reporting obligations and the oversight that people are 
going to impose on the licensees, are going to require a lot of 
care and carefulness with respect to parties who want to use 
them.
    But I think one of the key pieces that makes this perhaps 
less likely to be abused in that fashion is what they are 
asking to be delivered usually, at least on the second license 
with respect to medicine and medical devices, are hard goods, 
right, in-kind goods, as opposed to just funds.
    So is it possible that in-kind goods could be taken off the 
truck by the Taliban and sold on the market for hard currency? 
Of course it could. It is significantly more difficult, 
however, for that to happen than if just cash was put into the 
system, in the hands of anybody.
    So I think that is the key issue, is trying to focus on 
much more in-kind goods and services rather than simply cash-
flows into the country.
    Senator Menendez. Well, you know, you have a Taliban 
Government that has Haqqani-sanctioned individuals in its 
Government. And so while we want to, of course, assist the 
Afghan people, we have to be robustly resolute that the Taliban 
does not get access to these funds, especially when we have 
sanctioned individuals in their Government. Otherwise, our 
sanctions regime is meaningless, at the end of the day.
    Let me ask you, the OFAC general licenses--I will ask both 
you and Ms. Eckert--were welcomed by humanitarian organizations 
as a necessary protection for those NGO's seeking to stay and 
deliver in time of skyrocketing humanitarian need in 
Afghanistan. However, we have seen, in contexts, general 
licenses are sometimes necessary but not necessarily sufficient 
to ensure humanitarian NGO's have sufficient financial access 
to provide assistance in crisis areas under the control of 
sanctioned actors.
    What additional actions should OFAC consider to safeguard 
aid operations in Afghanistan, and if the United States chooses 
to differentiate between sanctioned Taliban officials and 
ministry bureaucrats that work under them, how do we ensure 
that the Taliban does not divert away from the vulnerable 
groups?
    Ms. Eckert.
    Ms. Eckert. Thank you, Mr. Menendez. As you noted the 
Administration took the very critical step of authorizing the 
transmission of goods, services, et cetera, of NGO's to support 
the range of humanitarian activities that meet basic human 
needs.
    But that is only part of the question. The other is how can 
funds be delivered to the NGO's in-country? Currently there is 
a critical liquidity crisis in Afghanistan. The banks have 
limited to $200 a week the amount of withdrawals that can 
happen. We have frozen the cash--the Taliban is enormously 
strapped. The central bank does not have Afghani notes and they 
do not have U.S. dollars. So there is a real liquidity crisis.
    So for U.S. banks or for banks to support humanitarian 
action they are going to be very hesitant to send funds into 
Afghanistan, and legitimately so, because even the banks who do 
not have an interest by the Government have very significant 
concerns about to whom they can let the funds go.
    For this reason I think one of the things that the U.S. and 
the international community need to do is to establish this 
unique, safe payment channels or mechanisms in order to 
negotiate the transmission of funds for humanitarian and NGO 
activities. And this is something that will require thought, 
and as Adam notes, creativity. But it is something that we need 
to work with financial institutions to accomplish because there 
are high-risk places such as Afghanistan that banks are not 
going to take the risk of transferring funds.
    I have had financial institutions tell me--North Korea, for 
example--even though there are humanitarian needs there, they 
do not want DPRK-related transactions on their books. So they 
are being very hesitant, and in order to encourage them, once 
the financial situation in Afghanistan stabilizes--because 
right now we do have this liquidity crisis--once it stabilizes 
we are going to need to provide some level of encouragement and 
incentives.
    One possibility is actually providing some kind of 
formalization of OFAC's policy about nonenforcement. But there 
are a number of things that need to take place as part of the 
discussion with financial institutions, but right now they are 
not going to be able to get the funds in. We need a channel to 
get funds and goods that can go for these purposes, and to be 
controlled so the Taliban does not have access to it.
    Senator Menendez. Well, thank you. I will be monitoring 
this very closely. Thank you.
    Chairman Brown. Thanks, Senator Menendez. The Senator from 
North Carolina, Senator Tillis, is recognized.
    Senator Tillis. Thank you, Mr. Chairman, and thank you all 
for being here, and Mr. Joscelyn, it is good to see you again. 
Mr. Joscelyn testified before Senate Armed Services last week.
    Mr. Joscelyn, I think I am going to start with you. The 
Taliban, to me, is no different today than it was 20 years ago. 
They may be slightly more sophisticated. They may be a little 
bit better on social media since it emerged since then. But 
they are still ruthless, they are murderers, they repress 
women, they threaten children.
    So should the USG ever grant the Taliban access to 
Afghanistan's foreign reserves, including the $7 billion at the 
NY Fed?
    Mr. Joscelyn. I agree wholeheartedly with your 
characterization of the Taliban being the same old Taliban, and 
I would have a lot of reservations about granting them access 
to any hard cash.
    Senator Tillis. Yeah, and the reason for that is that if we 
thought that it was going to go to fund medical facilities in 
the outlying areas of Afghanistan, which we now know are going 
to be in retreat, if we thought it was to operate schools that 
young girls could go to, then certainly we would not be having 
this discussion. It is because we know what it is going to go 
to. It is either going to go into the pockets of corrupt 
Taliban leaders or it is going to go to support their malign 
efforts, including their relationship with al Qaeda.
    Ms. Farid, do you agree with that?
    Ms. Farid. I agree, and I also addressed at the beginning 
that this money will go to Taliban. They should not even be 
given the permission to have, on the condition on any decision 
regarding the humanitarian corridors and funds to Afghan 
people.
    Senator Tillis. And Mr. Smith?
    Mr. Smith. Absolutely. I think the money, if you give the 
money to the Taliban, that that is what is going to happen.
    Senator Tillis. Is it also true that, first, the Taliban is 
having a problem paying their light bills, and it looks like, 
you know, their primary source, they import virtually all of 
the electricity in a grid that they constantly blew up when 
they were in various parts of the country? So their main 
sources are smuggling, the opium trade, and now maybe mineral 
mining, with the help of China.
    But should any ``governing''--I use in quotes--body, should 
they ever be seriously considered for any sort of recognition 
by the IMF or any other world agency?
    Mr. Smith. I certainly do not think so. I do, however, 
think we can delink the question of recognition from the 
broader question of how to provide services and support to the 
Afghani people.
    Senator Tillis. Mr. Joscelyn, you can add to that if you 
want to, but how do you think China's role there, particularly 
with mineral extraction, is going to blossom in the coming 
months and years, and what kind of threat does that rise to an 
inflow of cash that could help stabilize the Taliban 
administration? I refuse to call them a Government.
    Mr. Joscelyn. On the first point about recognition, no, 
absolutely not. There is no reason to give them a political 
victory to compound their military victory. They are the same 
old Taliban.
    China has been willing to do business with the Taliban for 
quite some time. We tracked the Doha delegation. We go from 
meeting with U.S. officials in Qatar and all of a sudden, a few 
weeks later, they would be in Beijing, cutting deals with the 
Chinese. We do not know the terms of those but we know the 
Chinese are basically willing to play ball for mineral 
extraction and for other initiatives.
    The one thing that the Taliban has to guarantee the Chinese 
Government is that they will not allow the Turkistan Islamic 
Party, which is, in fact, part of al Qaeda, and fought for the 
Islamic Emirate of Afghanistan in its resurrection. They have 
to guarantee that the Uyghurs in Turkistan Islamic Party will 
not actually attack in Xinjiang, will not cause terrorist 
operations. It remains to be seen if they can deliver on that 
guarantee.
    Senator Tillis. Ms. Farid, you are clearly the most 
experienced in terms of the life that you lived in Afghanistan, 
and the extraordinary accomplishment that you made as a female 
Afghani and being elected. What opportunity exists out there, 
with a Nation of 39 million people, half of whom are less than 
19 years old, I think probably 70 percent of whom are less than 
25 years old. So they have gotten a glimpse of what life can be 
without a Taliban leadership. What optimistic message can you 
send to the men and women who fought there, who sowed those 
seeds?
    Ms. Farid. I want to quote one of our officials of 
Afghanistan that said that Afghanistan is not dead; it is 
wounded. And the majority of the population, 70 percent are 
under the age of 30, 50 percent of the population are women. 
They are all there. Afghanistan exists, and as I told you, a 
syndicate took over as a group that want to rule Afghanistan by 
force, but that is not the Government the people of Afghanistan 
want. People of Afghanistan want to choose who rules the 
country--maybe a woman. Maybe a woman.
    And that is why I am very hopeful. I am hopeful that the 
allies of Afghanistan people, including U.S. Congress, continue 
to help Afghan people, Afghan women, build the corridors to 
help capacity building and local NGO's of Afghanistan, building 
a coalition, a global coalition to ban any coordination of 
Taliban, and also helping humanitarian friends to go to 
Afghanistan and prevent the problem and the shortage of food 
and the shortage of health care that people of Afghanistan are 
suffering.
    Senator Tillis. Thank you. Thank you, Mr. Chair.
    Chairman Brown. Thank you, Senator Tillis. Senator Warner 
from Virginia is recognized.
    Senator Warner. Thank you, Senator Smith--I mean Senator 
Brown.
    [Laughter.]
    Senator Warner. I appreciate the Committee having this 
hearing, and I have only got one question for the panel, but I 
do want to frame a little bit of this. I feel like--and I will 
be careful of how I state this, sitting from my position on the 
Intel Committee--I think the intelligence community frankly got 
it right here. They were predicting weeks and months from when 
we left, in terms of the demise of the Government, not days or 
weeks. I do not think any of us could have necessarily 
predicted that President Ghani would have cut and run the way 
he did.
    And I also share some concerns about the Administration, 
but I think frankly the biggest mistake the Administration made 
was not warning the American people that when you exit a 
country after 20 years involvement, there was no easy way for 
that to happen, and that decision, which had been initiated by 
President Trump--and I do not even necessarily criticize him, 
because I think as things will come out we will see that there 
were huge concerns, and I give credit to the incredible story 
of Ms. Farid, but concerns about this Government that were 
dating back years.
    And, you know, with the awful exception of the bombing that 
took place a few days before our troops left, the fact that we 
had gone for a year plus with no American soldiers killed in 
combat--and that does not erase the tragedy of the 13 American 
soldiers but also the countless Afghans that were murdered by 
that ISIS-K bombing.
    I share Senator Tillis' comments, and I think probably the 
Committee, that the Taliban has not changed. But we have an 
enormous challenge going forward. I share we should not be 
granting recognition, but we do still have this uneasy--we 
should not lose sight of the fact that the American military, 
along with our services, got 125,000 people out of Afghanistan, 
the largest airlift ever, and an overwhelming number of 
Americans. The fact that, you know, we do not keep tabs on 
Americans regardless of country, so the idea that there were 
still some left, they do not have to self-identify. Many of 
them are dual citizens. Many even in the days leading up did 
not want to leave yet because they still had family and others.
    One of the stories--and again, this is just, I think, a 
factual basis, I am not making a judgment--that even after our 
troops left we still see a trickle, but a steady trickle, of 
American citizens, green card holders, and SIVs coming out, 
either on charter flights or certain commercial flights, 
particularly from Qatar.
    So how we manage this relationship while we still have 
either citizens and/or Afghan allies, to extract them from 
country, is, I think, tricky, and we need to tread carefully, 
again, not by any means thinking that the Taliban have changed 
their stripes but realizing that in this kind of period right 
now, if we can still get people out, that is helpful.
    The question I want to ask for the panel, and I am down to 
only a minute left so I would apologize. I am gravely concerned 
about China and the Communist Party of China filling part of 
the vacuum, and I believe, sir, you touched on part of this, 
but how big of a threat and concern should that be for us in 
this country, please?
    Mr. Smith. Thank you, Senator. I think it is a significant 
concern. As Mr. Joscelyn pointed out, and as we know from 
around the world, China does not have the same views as we do 
on moral and human rights issues, on the ability to deal with 
Governments that we may not like, and I think their willingness 
to go in, if only for Belt and Road reasons, if not for 
minerals or otherwise, I think is rather significant. And they 
have made it very clear, frankly, that they have wanted to go 
in for 20 years and have not been able to.
    But I do think they are standing there, and I think the way 
to fill a vacuum is by filling a vacuum, and I think we need to 
do that through licenses and clever engagements with the Afghan 
people. But I agree, it is not necessary to engage with the 
Taliban itself.
    Ms. Farid. Actually, Afghanistan's problem was not just a 
national problem. It is a proxy war that so many Afghan people 
actually suffered from that proxy war, that the players in the 
region want to have intelligence inside of Afghanistan to 
attack their adversaries. But the situation right now is 
getting very complicated because Taliban are isolated and they 
have engagement with U.S. adversaries, and one of them is 
China.
    And just thinking that China can protect the borders, and 
it is far away from Afghanistan, and it is a little bit in 
upper geography of Afghanistan, in Badakhshan, that cannot be 
accessed easily, I think that is not correct. China is going to 
be a player in the future in Afghanistan, because they already 
had some relationships with Taliban, through Pakistan, and 
Pakistan facilitated that, unfortunately.
    Mr. Joscelyn. Just real quick, I would just say, look, I 
think the Islamic Emirate of Afghanistan is probably going to 
join the anti-American axis on the world stage, where China and 
other actors are basically emboldening anybody who is against 
us, and they are willing to do business with them on an amoral 
fashion, because they do not play by the same rules, as Mr. 
Smith said, as we do.
    It is part of the reason why I am skeptical of the argument 
that America has leverage over the Taliban now and the 
Taliban's Government with financial aid or anything else. I do 
not think that is true. I think that the Taliban can turn to a 
number of bad actors for support, and they are already doing 
so.
    Senator Warner. Thank you, Mr. Chairman.
    Ms. Eckert. Mr. Warner.
    Chairman Brown. Ms. Eckert.
    Ms. Eckert. Might I just add one point? It is very clear 
that China will act in its best interests and it will try to 
take advantage of the situation whereby the United States is 
not there now. However, we do have some shared interest, that 
China has largely been a supporter of efforts to counter al 
Qaeda, ISIL, and other terrorist groups. They have no reason to 
want regional instability, and I think an economic and 
humanitarian crisis there is not something that benefits them 
either.
    So we have some common ground to work with other countries 
who do not necessarily share our values but do not want to see 
this become a safe haven again for terrorists and their 
activities.
    Chairman Brown. Thank you. Thank you, Senator Warner. 
Senator Hagerty from Tennessee is recognized.
    Senator Hagerty. Thank you. Thank you, Chairman Brown, 
Ranking Member Toomey. I appreciate you holding this. And 
Senator Warner, I share your concerns about China's interest 
here. I fear deeply that assets like Bagram, that lithium 
deposits could actually become a crown jewel in China's Belt 
and Road, so thank you for raising that issue.
    I would like to turn my questions eventually to you, Mr. 
Joscelyn, coming back to the fact that the Biden 
administration's catastrophic withdrawal has created a series 
of colossal economic, humanitarian, and national security 
crises that are going to continue to unfold over the next few 
years. And I share the views that have been shared by many 
here, that the Taliban are unreformed. In fact, they may feel 
vindicated politically in what they have accomplished. And I do 
not think any of us share their violent and retrograde world 
view.
    It is very clear that the Biden administration needs to 
work to ensure that the world does not recognize the Taliban as 
the legitimate Government of Afghanistan, and this 
Administration must work to restrict the Taliban's access to 
financial resources, which I agree, the Taliban will use to 
further this sadistic behavior.
    Since 2002, the Taliban has been designated as a specially 
designated global terrorist organization, which makes them 
subject to counterterrorism sanctions. This designation must 
remain, and Treasury must be cautious when considering any 
loosening of the sanctions regime that we already have in 
place.
    Members of this Committee and this Administration may be 
tempted by a false choice that resources can somehow safely be 
channeled to halt a humanitarian catastrophe. But this wishful 
thinking, I feel concerned, will result in yet another national 
security catastrophe when the Taliban inevitably redirect those 
funds to their own purposes.
    We cannot support a Government or an economy that is 
inseparable from a terrorist organization. Mr. Joscelyn, you 
have already noted that Sirajuddin Haqqani, as the leader of 
the Haqqani Network, also serves at the Taliban's deputy 
leader. He is the Interior Minister of the new Taliban 
Government. And you already noted the Taliban, Haqqani Network, 
al Qaeda are essentially the same.
    So my question to you, Mr. Joscelyn, would you recommend 
that this Administration formally designate the Taliban as a 
Foreign Terrorist Organization?
    Mr. Joscelyn. I think, as a matter of fact, if the Haqqani 
Network is a Foreign Terrorist Organization, and it is and has 
been since 2012, then the Taliban should be. Haqqanis have a 
controlling interest in the Taliban. It was that sort of 
distance between the two that was imagined by the U.S. 
Government. It does not actually exist.
    And so if we are going to deal in facts, then I would say 
yes, the Taliban should be a Foreign Terrorist Organization, 
but it is almost something beyond that, right? It is almost 
beyond even a State sponsor of terrorism at this point. As Mr. 
Smith said, we have really a terrorist State. It is not even 
just a terrorist-sponsoring State. And so it is almost like a 
new category beyond our normal categories.
    Senator Hagerty. You have gone at this briefly with Senator 
Tillis, and I have got slightly different numbers. It may be $7 
billion. I have got $9.5 billion of Afghan central bank funds. 
But are there any circumstances under which you would recommend 
that we release those funds?
    Mr. Joscelyn. I cannot imagine any.
    Senator Hagerty. I thought so.
    Another question for you, and this is very concerning. Do 
you believe that it is possible that the Taliban turned a blind 
eye that regrettable day that ISIS attacked the Abbey Gate, the 
day that we lost 13 American servicemembers? What do you think 
might have happened that day?
    Mr. Joscelyn. Senator, I cannot say with certainty. What I 
can say is that days before the bombing we wrote up a report in 
Long War Journal about the security forces that were being 
placed by the Taliban outside the airport. Those security 
forces were heavily dominated by an arm of the Taliban known as 
the Badri 313. You can go through the history of Badri 313. 
They specialize in suicide and complex suicide attacks, and, in 
fact, they honor, throughout their propaganda, a guy named 
Ustadh Yasir, who was an Osama bin Laden man, worked for bin 
Laden and Zawahiri and helped build this paramilitary force for 
the Taliban and the Haqqanis. And they glorify martyrdom.
    So do I know that they let him through? No. Do I have any 
evidence that they did? No. But we were very suspicious before 
the attack of why it was that Badri 313 was stationed outside 
the airport.
    Senator Hagerty. I agree with you. I am deeply concerned as 
well. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Hagerty. Senator Van 
Hollen from Maryland is recognized.
    Senator Van Hollen. Thank you, Mr. Chairman. Thank you to 
all our witnesses here today. We, of course, do not have time 
in this hearing to go over all the mistakes the United States 
made in its policies toward Afghanistan over the last 20 years, 
but given some of the comments I hear this morning and from 
some of our colleagues on the other side of the aisle, I think 
it is important to explain what the Biden administration 
inherited.
    It was October 2018, when the Trump and strongarmed the 
Government of Pakistan to release two Taliban commanders. One 
was the cofounder of the Taliban and the other was number two, 
Baradar, who we see in all these photos. They then went to Doha 
and cut the Afghan Government out of the negotiations, further 
undermining their credibility. Then they told the Afghan 
Government, that was not at the table, to release 5,000 Taliban 
prisoners, many of whom returned to the battlefield.
    Then we had an agreement that said do not attack U.S. 
forces but go ahead and attack the Afghan forces with impunity. 
And by the way, let us also tie the hands of the Afghan forces. 
You cannot enter villages after dark but the Taliban can.
    That is the situation that the Biden administration 
inherited. And after all that, Donald Trump criticized 
President Biden for not pulling out our forces even earlier, in 
April. So it is great to hear all this revisionist history. It 
is interesting to hear folks criticize the situation now, when 
we did not hear a peep earlier on.
    So here we are. It is a desperate situation. The Taliban is 
in control of the country. But I do think that we have an 
obligation to try to provide humanitarian assistance, and yes, 
we have to make sure it does not go through the Taliban.
    So some have proposed that we add sanctions on top of the 
sanctions regime that we already have, including designating 
the Taliban as a Foreign Terrorist Organization. As I look at 
this, it is not clear to me what additional leverage we gain, 
but it does seem that we could put in jeopardy independent, 
international organizations that would be providing 
humanitarian assistance and potentially subject them to 
criminal and other penalties.
    Mr. Smith, what is your view of that?
    Mr. Smith. I think that is exactly right, Senator. They are 
already sanctioned, and so at least in one respect there is not 
much difference if you were to make them an FTO other than the 
concerns you just suggested. And we know that this is the case 
because when the Houthis in Yemen were designated an FTO at the 
end of the Trump administration, this was the big concern of 
the U.N. and other agencies, that if they were FTOs they would 
have to pull out and not be able to work with them. So I think 
that is a very real concern.
    If the issue is do we have enough control or sort of 
coercive authority on them right now, I would argue we do. The 
SDGT designation is significant. It limits U.S. persons from 
engaging with them, and U.S. banks or otherwise.
    But the FTO designation I do not think is needed, and I 
think does have that added risk you just suggested.
    Senator Van Hollen. And others have suggested that we 
designate Afghanistan, the country of Afghanistan as a State 
sponsor of terror. Would not that, in fact, de facto recognize 
the Taliban Government as the legitimate Government of 
Afghanistan?
    Mr. Smith. It may well. I think we are definitely in a new 
world here of having a sanctioned terrorist group take over a 
country. So I have not quite figured out whether an SST 
designation would require an identification of Taliban as the 
Government, but it probably would. That would be an ironic and 
unfortunate outcome.
    Senator Van Hollen. Right. So again, as you pointed out we 
already have a sanctions regime on the Taliban. That sanctions 
regime already creates lots of leverage. The question of 
whether we can successfully utilize that leverage is another 
question.
    What should we be looking for, Mr. Smith, in terms of 
whether or not our withholding of assistance in order to get 
the five concessions we talked about--a more inclusive 
Government, which, of course, is not in existence today; human 
rights extended to women and girls; making sure that 
Afghanistan is not again used as a platform for terrorist 
attacks; and the other conditions--what should we be looking 
for in terms of any conduct from the Taliban to suggest that 
that kind of pressure is working? Because count me as a 
skeptic, as others, but what would you be looking for?
    Mr. Smith. You know, I think we are all skeptical, and I 
think for good reason. And so I am concerned that those 
requests are sort of falling on deaf ears and perhaps they are 
going to be impossible to meet in the near term.
    But much as we have negotiated and discussed engagements 
with parties we do not like in the past, be it Iran, for 
example, there are times when we can figure out ways to engage 
with people with whom we do not like, with whom we do not 
agree, with whom we do not recognize on a transaction-by-
transaction basis.
    So I think that we go small steps by small steps. I do 
think we need to open up some humanitarian corridors, and there 
is a bit of risk, I have to admit. And if the Taliban do not 
behave themselves, as Mr. Joscelyn suggested they will not, and 
they may well, then we have to reassess. But I think this is a 
step-by-step process that could take quite some time.
    Senator Van Hollen. Thank you. Time is short. I could go 
on, but thank you. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Van Hollen. Senator 
Moran from Kansas is recognized.
    Senator Moran. Chairman, thank you. Mr. Smith and Ms. 
Eckert, I worked with my colleagues, both Republicans and 
Democrats across the aisle to try to alleviate the humanitarian 
crisis in Yemen, where the key parts of the country remained in 
control of the Houthis. What, if any, lessons from that 
experience can be applied to our situation in Afghanistan?
    Mr. Smith. Before turning it over to Ms. Eckert, who has 
quite a bit more experience in Yemen, I think the example I 
just gave to Senator Van Hollen, with respect to the FTO 
designation, is a big one. When the Trump administration called 
the Houthis a Foreign Terrorist Organization the impact was 
really quite severe and quite immediate with respect to 
multilateral organizations like the U.N.
    And so I think that is one of the lessons that we learned 
from there, that we do not necessarily need to go that far in 
order to maintain the leverage that we have.
    Ms. Eckert.
    Ms. Eckert. Thank you. Let me just say that there was a 
crisis that was averted, and thank you for your role in doing 
that, by having had the Ansarullah, the Houthis, as a Foreign 
Terrorist Organization. From NGO's who were working, providing 
food and humanitarian assistance in Yemen, they indicated that 
even with the announcement that they were going to designate 
them as an FTO, they ceased operations. And so there was a 
significant drop in the assistance that went in with that 
announcement. So the FTO designation would have been 
devastating in cutting off humanitarian assistance into Yemen.
    In reference to Senator Van Hollen's question, if the 
Taliban would be designated as a State sponsor of terrorism, 
leaving aside the question of recognition, which is a legal 
question that I do not know the answer, it would prohibit a 
whole range of assistance, under the Foreign Assistance Act. No 
funds can go to a State sponsor of terrorism.
    The current designations and sanctions, as well as the 
frozen assets and reserves, maintain a good amount of leverage. 
And it may be, as our colleagues have suggested, that 
ultimately this will not prove successful in moving the 
Taliban, but we do not need additional sanctions at this point 
in order to complicate the situation even more.
    Senator Moran. Thank you both for your answers.
    Mr. Joscelyn, in your written testimony you declare that 
the U.S., quote, ``Never had any leverage over the Taliban, and 
there is no good reason to think that it has any now.'' So if 
the prospects for humanitarian aid and other assistance will 
not work, and decades of sanctions have not worked, what path 
do you propose we follow?
    Mr. Joscelyn. You know, I really do not know. To be honest, 
I have documented this for so long. All I can say is I have 
seen all of these different things attempted and we never did 
have any leverage over them, and I can give you all the reasons 
why I say that.
    I hear what Mr. Smith is saying, and I also have similar 
language in my testimony about hard humanitarian assistance. He 
said it better than I did. In-kind, hard goods, I think that is 
the best way to go to try and help the Afghan people.
    But in terms of this idea that we are going to be able to 
use funds or money or any of this assistance to gain leverage 
to change the Taliban from being something other than the 
Taliban, I think we have 25 years of experience that says that 
is not going to happen.
    Senator Moran. Thank you for your straightforward 
nonanswer. It was an answer, and I appreciate it.
    Ms. Farid, special envoys from China, Russia, and Pakistan 
met with the Taliban officials last month. China and Iran have 
pledged aid. How did the Afghans view this?
    Ms. Farid. This is really unfortunate, as I said before, 
that Afghan people are experiencing a regional battle inside of 
Afghanistan, and Pakistan is always thinking of Afghanistan as 
its strategy dips. And so many of the other issues contributed 
to the fact that now we have China, we have Pakistan, we have 
Russia, and other countries like Iran that are backing Taliban. 
Taliban are not the Government that Afghan people want. Afghan 
people want a free, democratic country and free, democratic 
Government that they choose by themselves. I mean, they have 
continued this resistance.
    You see that resistance of the people in social media. You 
see how brave the women and men of Afghanistan are, saying that 
we do not want this kind of Government and this kind of 
atrocity and this kind of bloodshed and mutilation and public 
execution of the people in front of our kids.
    As a matter of fact, we have to let the world know that 
Taliban are not the Government, that people of Afghanistan 
want--they have engagement with the terrorist groups in the 
region. They have terrorists in the cabinet. They have 
terrorists who are on the wanted list of United Nations and the 
blacklist of United Nations, and this Taliban has to be wiped 
out from Afghanistan. Afghan people have to have the right to 
choose who they want to have as a ruler of the country.
    Senator Moran. Thank you. Thank you for your clarity. Mr. 
Chairman, thank you to you and Senator Toomey for hosting this 
hearing.
    Chairman Brown. Senator Smith of Minnesota is recognized.
    Senator Smith. Thank you, Chair Brown, and thank you very 
much to our panelists. I realize that we are running a little 
short of time and so I am going to ask just one question, Chair 
Brown. I know that Reverend Warnock is interested in asking 
questions as well, so I will be brief.
    But I would like to direct my question to Ms. Farid, if I 
could. Thank you so much for being with us today, and thank you 
so much for your courageous work advocating for women and girls 
in Afghanistan.
    My question is this. The Taliban takeover of Afghanistan 
has resulted in interruption of education for thousands of 
women and girls, and it is unlikely that many of them will be 
able to resume that education, particularly in rural areas. 
This is a huge blow.
    My question is, if women continue to be excluded from 
educational and employment opportunities what do you see as the 
long-term impacts to the economic security of Afghan women and 
their families, and do you think that this will further 
exacerbate the ongoing economic crisis that we see in 
Afghanistan? And then just as a follow-up, what are the most 
important things that we could do to build capacity right now?
    Ms. Farid. Thank you. Very important question. The women of 
Afghanistan showed to the world, in the last 20 years, how 
brave they are, and they showed that they can be agents for 
change. And Taliban recognized that, understand that, that if 
they let women of Afghanistan continue to be as free as they 
have been they will change the country, and then there will not 
be a suppression that Taliban have. They cannot continue to do 
the same rules that they have right now over Afghanistan if we 
have a different situation for women.
    So that is a fundamental issue. Taliban do not want women 
to be a part of the development, because they are afraid, and 
in the future we will have a country that cannot fly, because 
one wing is not able to fly. Women, half of the population, and 
that is the reality.
    Senator Smith. You make such a good point that it is not 
only the economic capacity of Afghan women but also the 
political and organizing capacity of Afghan women that is 
jeopardized. So thank you.
    Ms. Farid. Thank you.
    Senator Smith. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Smith. Senator Daines of 
Montana is recognized.
    Senator Daines. Thank you, Chairman Brown.
    President Biden's disastrous withdrawal from Afghanistan 
has made our Nation less safe. We lost 13 American troops who 
were heroically conducting a rescue operation that could have 
been completely avoided in the first place. The Administration 
left an untold number of Americans, some of our veterans' 
closest Afghan allies, behind enemy lines, and the U.S. is now 
far more vulnerable to terrorist attacks down the road.
    In fact, according to General Milley, is not confident that 
the U.S. could deny al Qaeda or ISIS the ability to use 
Afghanistan as a launchpad for terrorism, both in the region 
and around the world. This reckless withdrawal from Afghanistan 
was completely bungled, mismanaged, and its harm to our 
national security will be seen and felt far beyond those tragic 
weeks that we saw in August. It will hurt our security for the 
months and the years ahead.
    The chaotic withdrawal also triggered a refugee crisis that 
has only worsened Americans' confidence in the Biden 
administration. In late August, the Secretary of Homeland 
Security grated humanitarian parole status into the United 
States to tens of thousands of Afghans. They provided us 
flowchart after flowchart of how vetting these individuals is 
supposed to work, but far from sufficient proof that it is 
working as promised.
    Indeed, 6 weeks later, the Administration still has not 
told us much about these individuals. How many worked directly 
and verifiably with U.S. troops or others in our Government? We 
have asked but they have not answered. What is the age and 
gender breakdown of the Afghan parolees? These are not 
difficult questions. We have asked; they have had no answer 
back.
    And most importantly, we have asked for detailed 
information about what, if any, vetting of parolees was done 
beyond database checks among Federal agencies. More than a 
month later we still do not have reliable or complete answers.
    We have also asked how many Afghans at overseas U.S. 
military bases were identified as being possible threats and 
transferred to Kosovo for additional screening. Again, no 
answer.
    Just last Friday, my staff visited Camp Upshur in Quantico 
to see firsthand the situation on the ground. They left with 
more questions than answers. DHS and State Department officials 
at this location were unable or unwilling to answer very simple 
and direct questions brought about demographics, vetting, or 
prioritization of those who were brought into the U.S. from the 
lily pad sites.
    The Administration's refusal to answer these questions has 
created tremendous unease among many Americans, and that is 
unacceptable. I stand with our U.S. veterans in support of 
welcome fully vetted Afghan SIV holders to our country, or 
another allied country. But I am troubled the Biden 
administration has been unwilling or unable to demonstrate how 
many parolees actually meet the SIV criteria or how many were 
Priority 1, 2, or 3 refugee applicants before being granted 
parole status.
    The Biden administration has an uphill battle, to show the 
American people that the people paroled are not a security 
threat. Isolated incidents regarding alleged crimes by parolees 
do not help that perception.
    But the first step toward increasing the confidence is 
finally answering our very legitimate questions. In short, 
President Biden owes it to the people he was elected to serve 
to address these concerns without further delay. I am pushing 
Congress to create a joint committee to examine Afghanistan and 
the effects this disastrous withdrawal has caused.
    Mr. Joscelyn, given General Milley's sentiment that 
terrorist organizations will make a resurgence in the next 
couple of years, what do you see as the greatest vulnerability 
to America's security, and how do we prevent terrorists from 
exploiting it?
    Mr. Joscelyn. I think there is a fundamental 
misunderstanding, even in General Milley's comments, about the 
resurgence of a terrorist threat in Afghanistan. I do not think 
that they really understood that al Qaeda was marbled 
throughout the Taliban insurgency and was helping the Taliban 
win the war.
    Besides all the tactical things that I worry about, in 
terms of plots that they can attempt, I think that what has 
been underestimated here is the degree to which their victory 
is a boon for the global jihadist movement. We have been 
tracking jihadist groups all across Africa, the Middle East, 
and in South Asia. I can show you more than 30 statements from 
these groups and other high-ranking individuals saying that 
they see the Taliban's victory as a sign that the divine will 
is with them, to achieve victory globally. This is a morale-
booster for anti-American terrorists in many places.
    Senator Daines. Thank you, Mr. Joscelyn. Thank you, Mr. 
Chairman.
    Chairman Brown. Senator Warnock from Georgia is recognized.
    Senator Warnock. Thank you, Mr. Chairman, and thank you for 
holding this critically important hearing.
    The war in Afghanistan is America's longest war, and by its 
conclusion, two decades after it started, we were deploying men 
and women who were not even alive when the conflict started.
    Although Afghanistan has been mentioned before--mentioned--
in this Committee, in the context of terrorist financing and 
Iran sanctions, today is the first time, since 2001, that the 
Senate Banking Committee has held a hearing specifically 
focused on Afghanistan. And so I am grateful to Chairman Brown 
and Ranking Member Toomey for holding this hearing.
    One of the key components of U.S. strategic failure in the 
war was an inability to develop reliable and preferable options 
for Afghans to build an economy that is not based on illicit 
drugs or minerals that other foreign powers like China and 
India seek. Failure was also due to an inability to stem the 
widespread corruption that crippled the ability of the national 
Government to govern effectively and build trust among the 
people. We saw that play out at the end, but it was a reality 
long before August 15th.
    Mr. Smith and Ms. Eckert, I would like to hear from you on 
this question. Recognizing that the U.S. war effort was a 
whole-of-Government endeavor, not just what is happening with 
soldiers on the battlefield, and knowing how critical 
Afghanistan's economic viability was to success and failure, 
what questions should this Committee and Congress have been 
asking over the last 20 years, and what can we learn from this 
lack of oversight to prevent a similar blind spot from 
happening again elsewhere?
    Mr. Smith. Thank you, Senator. If what we are asking is how 
could we have built a better system in the past 20 years, which 
I think is really the fundamental sort of question here, I 
think we can learn a lot from the military and the failures of 
the Afghan military, which I understand stemmed, in part, from 
the U.S. trying to build a military in our image as opposed to 
a military that the Afghans could actually sustain on their 
own. They built structure but not institutions.
    I think that is true throughout the society. And so we 
built quite a lot of structures with respect to terrorism 
financing, banking system, payment systems even, in 
Afghanistan. But my concern is we have not built the 
institutions. We have not built with the foundations and with 
the roots that could be self-sustaining.
    And so I think that is the real question with respect to--
``Nation-building''--I do not think is the word we are going to 
be using anymore, but really the building of societies, the 
assisting of societies. How do we make sure that we build 
something that is sustaining and not something that just has a 
structure on top of no foundations? So I think that is 
throughout the system and not just in the military but the 
economic system, the humanitarian system, social system, and 
otherwise.
    Senator Warnock. Thank you. Ms. Eckert? You are muted. Ms. 
Eckert, we cannot hear you.
    Ms. Eckert. Excuse me. Can you hear me now?
    Senator Warnock. Yes, we can. Thank you.
    Ms. Eckert. Thank you. Thank you very much for the 
question, and I agree with you that we really do need a serious 
assessment of the last 20 years of U.S. policy, not just the 
past 2 months of U.S. policy vis-a-vis Afghanistan. And in 
order to do that I think we really seriously must examine why 
it went wrong, or why it did not achieve the goals that we 
wanted.
    I do think that Congress, through SIGAR, the Special 
Inspector General for Afghan Reconstruction, research to follow 
what has happened to U.S. programs and international programs 
that we have tried to put in place.
    The Committee, however, by virtue of its jurisdiction has 
responsibility for oversight of a number of these financial 
programs, sanctions, terrorism financing, et cetera. Too often 
the Congress provides general authority and does not do much 
oversight on implementation. There are, undoubtedly, and very 
clearly as we can see unintended consequences of some of these 
sanctions policies, especially on the delivery of humanitarian 
assistance.
    With the Afghanistan situation as a case in point, now is 
an opportune time for this Committee to review these 
consequences and to try to reform our system so we do not have 
to go through these kinds of emergency situations of 
authorizing humanitarian assistance. The Committee could play a 
critical role by reestablishing the humanitarian exemption in 
section 203(b) of the International Emergency Economic Powers 
Act, that it enacted in 1977 but which has been routinely 
waived since 2001.
    So I look forward to the Committee undertaking some of 
these efforts. Thank you Senator Warnock and thanks very much 
for your thoughtful question.
    Senator Warnock. Well, thank you so much, and it is 
wonderful to talk to you about this, on the first hearing on 
Afghanistan in this Committee, 20 years later. But these 
questions clearly are not centered around August 15th, when 
Kabul fell to the Taliban, but the 7,264 days we had American 
soldiers on the ground, engaged in war, when many in this 
Committee, frankly, were not paying much attention.
    Thank you all so much, and Ms. Farid, we are inspired by 
your courage and your service.
    Ms. Farid. Thank you so much.
    Chairman Brown. Thank you, Senator Warnock, for your 
thoughtful comments.
    This has been a comprehensive and useful survey of the 
issuing facing the international community in Afghanistan, the 
looming economic and humanitarian crisis facing the people in 
that country under Taliban rule. I thank our witnesses for 
their assessments of the situation there, how the U.S. and our 
allies might usefully work to ensure the continued delivery of 
critical humanitarian and economic assistance to the people of 
Afghanistan while denying to the Taliban, al Qaeda, and other 
designated terrorist groups the use of, or the ability to 
benefit from such funds. So thank you all.
    For Senators who wish to submit questions for the record 
those questions are due 1 week from today, Thursday, October 
12. To the witnesses you have, please, 45 days to respond to 
any questions.
    Thank you again. The hearing is adjourned.
    [Whereupon, at 11:54 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    In August, we finally ended 20 years of war in Afghanistan. Almost 
125,000 people were airlifted out of the country in a few short weeks, 
because of the skill and courage of our troops and our diplomats and 
other humanitarian workers on the ground.
    Today, our servicemembers are out of harm's way for the first time 
in two decades, while thousands of Afghans are starting a better life 
in this country. We welcome these refugees seeking freedom, just as our 
country has done for generations.
    But in the midst of the evacuation, we also saw a country in 
turmoil. An Islamic State suicide bomb attack near the airport killed 
13 U.S. troops and scores of innocent Afghan men, women, and children. 
Navy Corpsman Max Soviak of Berlin Heights, Ohio was among those killed 
in action, and died a hero in service of his country, working to 
evacuate vulnerable Afghans and protect fellow Americans.
    Even after the evacuation ended, tens of thousands of Special 
Immigrant Visa applicants and other vulnerable Afghans remain in 
Afghanistan, along with many American citizens or legal permanent 
residents of the U.S., including some of my constituents.
    It's now clear that the agreement former President Trump reached 
with the Taliban, which provided for the final phase of the U.S. 
withdrawal process and the release of around 5,000 battle-hardened 
Taliban prisoners, was flawed. Many of those released Taliban prisoners 
contributed to the Taliban's quick seizure of the country.
    President Biden, understandably reluctant to keep or expand the 
number of American troops in harm's way while working out a better 
deal, observed that agreement.
    It's also clear that the Biden administration and U.S. officials at 
many levels failed to anticipate the rapid fall of the Afghan 
Government. And it's obvious that the execution of the withdrawal was 
flawed.
    We also now know, of course, that the Taliban never intended, as 
they claimed, to pursue a peaceful path, a more democratic path, with a 
broader Government with representatives from a diverse range of ethnic 
groups and civil society actors. They refuse to reject relationships 
with terrorists like the Haqqani network and al Qaeda.
    Three different committees chaired by Banking Committee 
colleagues--Senator Menendez with Senate Foreign Relations, Senator 
Warner with Senate Intelligence, and Senator Reed with Armed Services--
have begun thorough reviews, including a series of hearings which will 
assess the many decisions, including mistakes made along the way by 
subsequent Administrations, and possibly by Congress, over 20 years in 
Afghanistan.
    What is abundantly clear is that before we send our servicemembers 
into another conflict, we must make sure that military engagement is 
truly a last resort, and that we know how we will extricate ourselves 
from military conflicts before we get ourselves into them.
    Today, the focus of this hearing is to look forward--to envision 
what we can do to address the urgent economic and humanitarian crisis 
facing the country in the wake of the Taliban takeover, and to assess 
the role of economic and financial sanctions and other counterterrorism 
tools against the Taliban, tools within this Committee's jurisdiction.
    With as much as 30 percent unemployment, a brain drain of its most 
capable young people, enduring deep poverty, an ongoing drought, the 
Covid crisis, and the collapse of Afghanistan's economy looming, the 
people of Afghanistan need help.
    We must consider how the United States can maintain the flow of 
humanitarian assistance and family remittances, while ensuring that aid 
does not fall into the wrong hands.
    This aid has been a lifeline to the people of Afghanistan. Millions 
rely on it. It must continue, even while we deny access to funds to 
terrorist actors like the Taliban, al Qaeda, and the Haqqani network.
    As we will hear today, that is no small task--but it is essential. 
The lives and livelihoods of millions of Afghans may depend on it. We 
owe them that much.
    And we must do this while protecting the security of Americans and 
preventing Afghanistan from once again emerging as a terrorist safe 
haven.
    The Administration has made clear the Taliban should be judged by 
their actions over time, and that any decisions regarding diplomatic 
recognition or the release of billions in frozen Afghan Government 
reserves is far off. They have a clear-eyed realism about who the 
Taliban are, while at the same time recognizing, along with our allies, 
that they control the Government and thus we must engage them, and when 
necessary, hold them accountable for abuses.
    If the last month is any indication, the Taliban are not moderating 
their positions.
    They have appointed brutal old guard Taliban members to serve in 
the interim Government, including the leader of the terrorist Haqqani 
network as Minister of the Interior.
    They have threatened, harassed, and attacked women and girls who 
were demonstrating to retain their hard-fought freedoms. They closed 
Kabul's premier university to women faculty and students. They 
converted the former Ministry of Women's Affairs into the old, 
notorious Ministry of Vice and Virtue--a pretty grotesque irony.
    They have harassed, beaten, and killed journalists and members of 
other ethnic groups, they started a return to grisly public executions 
of alleged lawbreakers, and threatened a return to public amputations.
    The situation grows more dire each day. We must get to work.
    We know that China, Russia, and other countries that do not share 
our values are already engaging in Afghanistan--and they have few 
qualms about funds falling into the wrong hands.
    It's up to us to show the Afghan people, and people around the 
world, that the U.S. will continue to be a beacon of hope and a source 
of humanitarian relief.
    I am eager to hear today from our four witnesses, who will share 
their unique perspectives with us. We welcome you all to the Committee, 
in person and remotely, and look forward to your testimony.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Mr. Chairman, thank you.
    Last month, we all watched in horror as chaos unfolded at Kabul's 
airport. This Administration's flawed decisions resulted in an utterly 
catastrophic evacuation from Afghanistan. Responsibility for this 
withdrawal--notwithstanding our severely flawed negotiations with the 
Taliban under the previous Administration--lies with President Biden.
    To be clear, I felt at the time and still believe that it was wrong 
for the previous Administration to negotiate with the Taliban to the 
exclusion of the legitimately elected Afghan Government, and to agree 
to a full withdrawal of U.S. troops. However, at least that agreement 
was conditioned on the Taliban fulfilling certain political 
commitments, including achieving a ``permanent and comprehensive 
ceasefire,'' and agreeing upon a ``political roadmap'' for 
Afghanistan's future. Since it's universally acknowledged that the 
Taliban failed to live up to these conditions, the Biden administration 
could have chosen a different path and adjusted their withdrawal plan 
without even having violated the prior agreement. Tragically, they did 
not.
    We know from recent congressional testimony that President Biden 
ignored the counsel of DOD officials to keep a military presence in the 
country longer. We also know from recent media reporting that the DOD 
urged the Administration to begin the evacuation of Americans months 
earlier. Had the President listened to this advice, America could've 
ended-not continued, as the President claims, but responsibly ended--
our involvement in this war on our own terms. Instead, the terms of our 
chaotic exit were set by the Taliban, a terrorist group we've been at 
war with for 20 years.
    Amazingly, the Administration entrusted the ``safe passage'' of 
Americans, green card holders, and vulnerable Afghans to evacuate the 
country to the Taliban, and did not publicly question or challenge the 
Taliban's threats that we depart by August 31st. So it's no wonder 
that, contrary to President Biden's assertion that the U.S. would stay 
until every American was able to leave, hundreds of American citizens 
and legal permanent residents were left behind--including 
Pennsylvanians.
    One such Pennsylvanian American citizen, a mother of four, works at 
a middle school in the Lehigh Valley. During the evacuation operations 
in Kabul, she repeatedly tried and failed to make it to the airport. 
Once she was teargassed. Another time she nearly had her passport 
seized by a Taliban militant. She was just blocks away when the suicide 
attack at the airport killed 13 U.S. servicemembers and nearly 200 
Afghans.
    The only way she escaped Afghanistan was because a veterans' group 
operating on the ground found her, protected her, and got her on a 
flight on September 10th. It's unbelievable to me that a group of 
Americans--civilians--had to save this woman's life because her own 
Government abandoned her. And now, as a direct result of the 
humiliating unnecessary surrender in Afghanistan, a massive 
humanitarian disaster appears likely to descend on the Afghan people.
    Today, thousands of Americans, green card holders, and Afghan 
special immigrant visa applicants, who aided the U.S. military, and 
their families are still trying to escape this disaster. And, of 
course, the Afghan people, including vulnerable women, girls, and 
minorities now face violence, systematic repression, and the denial of 
their basic rights under Taliban rule--something they have not known 
for two decades.
    The Biden administration has said repeatedly that the Taliban must 
cut ties with terrorist groups, ensure the rights of women and girls, 
conduct no revenge killings against our Afghan partners, and allow 
Americans, green card holders, and SIVs and their families to leave the 
country freely.
    As we will hear today, the Taliban is failing on all of these 
fronts. They are a brutal, murderous, terrorist group intertwined with 
al Qaeda. And yet, the Administration's current posture seems based on 
the naive hope that the Taliban will reform itself now that they have 
taken power.
    The Administration may feel pressured to provide sanctions relief 
to the Taliban to address the acute humanitarian crisis emerging in 
Afghanistan. But bestowing international legitimacy on the Taliban and 
allowing them access to $7.5 billion dollars at the New York Fed would 
be a grave mistake. We should be exploring ways to help the Afghan 
people without empowering the Taliban.
    Today we will consider critical issues that will determine whether 
and how the Administration will engage with the Taliban, including the 
status of sanctions on the Taliban, which is a Specially Designated 
Global Terrorist organization, now that it controls Afghanistan; the 
interconnectedness of al Qaeda and the Haqqani Network with the Taliban 
and any new sanctions that should be imposed on these groups; the acute 
risk of Afghanistan becoming an epicenter of money laundering and 
terrorist financing; Treasury's policies permitting humanitarian aid to 
continue flowing to the Afghan people; the current and future status of 
the $7.5 billion in Afghan foreign reserves kept at the New York Fed; 
and Afghanistan's $500 million in Special Drawing Rights held at the 
IMF.
    I look forward to hearing from today's witnesses about these 
issues.
                                 ______
                                 
                  PREPARED STATEMENT OF ADAM M. SMITH
 Partner, Gibson Dunn and Crutcher, Former Treasury Department Senior 
 Advisor and Former Director, Multilateral Affairs, National Security 
                                Council
                            October 5, 2021

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                   PREPARED STATEMENT OF NAHEED FARID
          Member of Parliament (The Wolesi Jirga), Afghanistan
                            October 5, 2021
    Thank you to the Committee for inviting me to speak today. Chairman 
Brown, Ranking Member Toomey, Members of the Committee, my name is 
Naheed Farid. I am a member of Parliament from Afghanistan representing 
the people of Herat, which is my hometown. I have served in Parliament 
for more than 11 years and since 2019 I have been the Chairperson of 
the Human Rights Civil Society and Women's Affairs Committee. Here in 
Washington, DC, I serve on the advisory board of the Afghanistan-U.S. 
Democratic Peace and Prosperity Council.
    I appear before you today still in shock that the Taliban, the 
Haqqani Network, and al Qaeda have taken over Afghanistan. For years my 
family and I have faced death threats from the Taliban. I cannot count 
how many friends and colleagues I have lost to Taliban violence and 
targeted assassinations. A week before they took Kabul, the Taliban 
entered Herat, found my house, searched for my family. Luckily, my 
family and I were able to escape with just the clothes on our backs. We 
fled to safety and now I'm among thousands of displaced women, who left 
our lives behind, not knowing if and when we will ever return.
    For Afghan women of my generation, we remember the Taliban from the 
1990s. Their sudden takeover of the country brings back so many 
nightmares. When I was a girl growing up in Herat, I loved going to 
school and I dreamed of one day becoming a pilot. When the Taliban took 
control, they closed my school, and I was forced to spend most of my 
time at home with female relatives.
    Today what we as Afghan women have known all along is clear for the 
world to see. The Taliban cannot be trusted. They are rolling back all 
of the gains of the past 20 years and reinstituting their draconian 
rules. Afghan women and girls face a return to the 1990s. The Taliban 
have stripped most women of the ability to work, girls cannot attend 
secondary schools, young women who grew up in a free and open society 
are now living in fear.
    Make no mistake, the Taliban govern through fear. Their soldiers 
indiscriminately whip civilians in the street. They have resumed public 
executions and mutilations. They have committed forced displacements 
and atrocities against Tajiks and Hazaras in Panjshir, Daikundi and 
other places. They have curbed free speech and decimated Afghanistan's 
once-thriving media sector. The Haqqani Network, al Qaeda, and other 
dangerous terrorist groups now operate freely in Afghanistan and have 
significant control within the Taliban leadership.
    So how can Congress help the Afghan people? I have had so many 
meetings with Members of Congress these past few years and I know that 
so many of you feel a deep bond with the Afghan people and especially 
with Afghan women. What the Afghan people need right now are three 
things: immediate humanitarian assistance, legislation that prohibits 
U.S. recognition and normalization of relations with the Taliban, and 
support for local NGO's and civil society who can deliver basic 
services in the absence of a normal Government.
    Afghanistan faces a dire humanitarian crisis. The health care 
system, which was reliant on direct payments from international donors, 
is on the brink of collapse. There are millions of Internally Displaced 
Persons unable to return to their homes. More than half of the 
population faces food insecurity. Without outside assistance more 
Afghans will suffer and die. But, the Taliban cannot be allowed to set 
terms and conditions on how this humanitarian assistance is delivered 
and who it is delivered to. Humanitarian corridors need to be 
established where international and local NGOs can do their work 
without any interference from the Taliban.
    The Taliban regime cannot be trusted. Because of their hardline 
beliefs and their partnership with dangerous terrorist groups, the 
Taliban pose an imminent threat to the region and the world. No U.S. 
Administration or U.S. allies should recognize the Taliban regime, nor 
should they normalize relations unless and until the Taliban purge 
their ranks of known terrorists and deliver a pluralistic political 
system that provides equality to all Afghans. I urge the Members of 
this Committee to support legislation preventing Taliban recognition. 
There are two different pieces of legislation that have already been 
introduced in Congress--the Taliban Recognition Prevention Act in the 
House, and the Afghanistan Counterterrorism, Oversight and 
Accountability Act in the Senate. I urge you to act quickly and in a 
bipartisan way to pass legislation to this effect.
    Not only can't the Taliban regime be trusted, it also has minimal 
capacity for governance. Very few of the technocrats that remain in the 
country are willing to resume their jobs at the various ministries. We 
are witnessing the breakdown in basic services such as health care, 
education, banking and finance, aviation, and many others. The U.S. 
should not provide the Taliban with capacity building support. Instead 
the U.S. should provide direct support to Afghan NGOs and civil 
society. As someone with a background in nonprofit management and a 
family foundation that has built many schools for girls throughout 
Afghanistan, I know firsthand just how valuable local NGOs are to so 
many ordinary Afghans, especially to women and girls. The U.S. 
Government must find ways to provide funding, capacity building, and 
support to these local organizations who are on the ground helping 
Afghans.
    A free and democratic Afghanistan that I committed my life to 
build, the Afghanistan that me and my generation, and the Gen Z'ers 
that followed us, love, and cherish, that Afghanistan still exists. It 
exists in the pulse of our cities, in our green landscapes and in our 
rugged terrain. A free and democratic Afghanistan exists in our hearts 
and our minds. We will reclaim this dream that the Taliban took away 
from us. We will fight them, on all levels, until they give us our 
freedom back. I just hope that our allies in the U.S. Congress, those 
whose ideals we embraced and whose encouragement we accepted at face 
value, continue to stand with us during this, our greatest time of need 
and show the world once again that it can lead and be a force for 
positive change.
    Thank you!
                                 ______
                                 
                    PREPARED STATEMENT OF SUE ECKERT
 Senior Associate and Lecturer, Center for Strategic and International 
            Studies and Jackson Institute for Global Affairs
                            October 5, 2021
    Chairman Brown, Ranking Member Toomey, and distinguished Members of 
the Committee, thank you for the opportunity to appear before you today 
to discuss the critically important implications of the Taliban's 
takeover for U.S. national security, and the future of Afghanistan.
    My views are informed by many years seeking to refine economic 
tools to promote U.S. national security and foreign policy objectives. 
As a staff member of the House Committee on Foreign Affairs overseeing 
export controls and economic sanctions, and then in the Executive 
branch administering U.S. dual-use export controls, and subsequently in 
academia and think tanks, I've worked to realize the potential of 
economic and financial measures to promote international peace and 
security. My research and efforts to reform these instruments at both 
the U.N. and domestic levels entail a better understanding of the 
objectives, utility, and limitations of such measures (including 
unintended consequences), as well as the circumstances when sanctions 
are most likely to be effective. While popular discourse continues to 
be skeptical of sanctions, I believe economic coercion, carefully 
crafted and effectively implemented, remains a critical component of 
U.S. national security.
Dire and Deteriorating Humanitarian Situation in Afghanistan
    Even before the Taliban took control in August, Afghanistan was 
experiencing one of the worst humanitarian crises in the world. After 
decades of conflict, the country has been mired in overlapping 
humanitarian crises--including the COVID-19 pandemic, climatic changes 
and 2021 drought, persistent political insecurities, and increased 
violence. The Taliban's return to power--and the ensuing political 
instability--compounded these challenges. Responding to the severe and 
worsening humanitarian situation, U.N. Secretary-General Antonio 
Guterres launched an urgent flash appeal on September 13 for $606 
million in additional funding, emphasizing the urgent need to ensure 
that the international community's humanitarian response ``saves lives 
but also saves livelihoods.'' \1\ Donors responded by pledging $1.2 
billion for the Afghani population.
---------------------------------------------------------------------------
     \1\ https://www.un.org/sg/en/node/258992
---------------------------------------------------------------------------
    Over 18.4 million people (or half of Afghani citizens) need 
humanitarian assistance, with more than 30 percent of the population 
facing emergency or crisis levels of food insecurity; half of all 
children under five facing acute malnutrition. \2\ This increase in 
food insecurity can be partially attributed to rising food and fuel 
prices, disappearing jobs, and the drought-induced destruction of 40 
percent of the country's wheat crop. In the first half of 2021, there 
were 5,183 civilian casualties and injuries, with a sharp increase 
between May and June following the withdrawal of international military 
forces and an uptick in fighting; more than 4 in every 10 civilian 
casualties were women and children. Additionally, at least 570,000 
individuals have fled from conflict in 2021, while a record 757,000 
Afghans were deported or returned from neighboring countries between 
January and August, despite suboptimal return conditions. \3\
---------------------------------------------------------------------------
     \2\ OCHA's Flash Appeal: Snapshot of Immediate Humanitarian 
Response Needs (Sept-Dec 2021) https://www.humanitarianresponse.info/
en/operations/afghanistan/document/flash-appeal-snapshot-immediate-
humanitarian-response-needs-sept-%E2%80%93.
     \3\ CSIS, ``U.S. Sanctions Squeeze Humanitarian Assistance in 
Afghanistan'', https://www.csis.org/analysis/us-sanctions-squeeze-
humanitarian-assistance-afghanistan.
---------------------------------------------------------------------------
    According to the United Nations Development Programme's most recent 
assessment, Afghanistan is heading toward universal poverty. As much as 
97 percent of the population is at risk of falling below the poverty 
line by mid-2022--compared to the current poverty rate of 72 percent--
unless the country's political and economic crises are curtailed. The 
ramifications of the Taliban's takeover are accelerating these crises, 
particularly due to frozen foreign reserves, long-standing sanctions 
against the Taliban, collapsing public finances, and increasing 
pressure on the banking system.
    On October 3rd, the European Union's foreign policy chief Josep 
Borrell, warned that Afghanistan is facing a collapse of its economic 
and social systems that risks turning into a humanitarian catastrophe, 
which is dangerous not only for Afghans, but for the region and 
international security as well. Since the Taliban took power in August, 
food prices have jumped more than 50 percent as the freezing of $9 
billion of Afghanistan's assets held in foreign central bank reserves 
and the withdrawal of foreign income stokes inflation. The Afghan 
banking system is largely paralyzed, with people unable to withdraw 
money, while the country's health system--which was heavily dependent 
on foreign aid--is close to collapse. \4\
---------------------------------------------------------------------------
     \4\ ``Afghanistan on Verge of Socio-Economic Collapse, EU's Top 
Diplomat Says'', Reuters. https://www.reuters.com/world/asia-pacific/
afghanistan-verge-socio-economic-collapse-eus-top-diplomat-says-2021-
10-03/
---------------------------------------------------------------------------
    The World Food Program (WFP)'s Situation Update in late September 
reported that food security is deteriorating rapidly with only 5 
percent of households consuming adequate levels of food. \5\ WFP 
Executive Director and Former U.S. Congressman David Beasley pleaded, 
``The time is now, we cannot wait 6 months--we need the funds 
immediately so we can move the supplies, to pre-position before the 
winter sets in.'' \6\ WFP noted that the situation is also dire among 
the middle classes, who used to be able to feed their families every 
day: three out of four households now limit portion sizes; adults are 
eating less so their children can eat more.
---------------------------------------------------------------------------
     \5\ World Food Program Situation Report, 30 September 2021, 
https://reliefweb.int/report/afghanistan/wfp-afghanistan-situation-
report-30-september-2021.
     \6\ ``Afghanistan: The Time To Act Is Now'', https://www.wfp.org/
stories/afghanistan-time-act-now.
---------------------------------------------------------------------------
    Moreover, the World Health Organization (WHO) last week warned of a 
deteriorating health situation in Afghanistan, with decreasing access 
to health care for the Afghan population. There are more cases of 
measles and diarrhea, and less response to the pandemic, as well as a 
resurgence of polio. According to WHO, only 17 per cent of the over 
2,300 health facilities previously supported by the World Bank are 
fully functional. Two thirds of these health facilities have run out of 
essential medicines. \7\
---------------------------------------------------------------------------
     \7\ Alexander Matheou, Asia Pacific director of the International 
Federation of Red Cross and Red Crescent Societies, said at a news 
conference on September 30. https://www.nytimes.com/2021/09/30/world/
asia/afghanistan-aid.html

        We are deeply concerned that Afghanistan faces imminent 
        collapse of health services and worsening hunger if aid and 
        money do not flow into the country within weeks. There needs to 
        be some solution to the financial flows into Afghanistan to 
        ensure that at least salaries can be paid, and that essential 
---------------------------------------------------------------------------
        supplies--power and water being two of them--can be procured.

    Fears about a surge in deaths from basic medical ailments have 
ballooned, as more than 20,000 health workers are out of work, either 
because the facilities closed, or their salaries were frozen.
    U.N. Emergency Relief Coordinator Martin Griffiths on September 22 
released $45 million in life-saving support from the U.N. Central 
Emergency Response Fund to help prevent Afghanistan's health care 
system from collapse, noting, ``Allowing Afghanistan's health care 
delivery system to fall apart would be disastrous. People across the 
country would be denied access to primary health care such as emergency 
caesarean sections and trauma care.'' \8\
---------------------------------------------------------------------------
     \8\ ``Afghanistan: ERC Griffiths Releases $45M From U.N. CERF for 
Life-Saving Support'', https://www.unocha.org/story/afghanistan-erc-
griffiths-releases-45m-un-cerf-life-saving-support.
---------------------------------------------------------------------------
    Beyond official U.N. and EU agencies stressing the critical nature 
of the situation in Afghanistan, leading humanitarian organizations 
have also issued stark assessments. Jan Egeland, Secretary-General of 
the Norwegian Refugee Council, and former U.N. Undersecretary-General 
for Humanitarian Affairs, visited Afghanistan last week, reporting 
that,

        Afghanistan's economy is spiraling out of control. The formal 
        banking system could collapse any day now because of a lack of 
        cash. I've spoken to families who tell me they are surviving on 
        tea and small scraps of old bread. If the economy collapses, 
        even the most basic services will no longer function, and 
        humanitarian needs will soar even higher. Dealing with the 
        liquidity crisis is critical as aid organizations seek to scale 
        up to meet urgent humanitarian needs. U.N. member States must 
        urgently broker a multilateral agreement to stabilize the 
        economy, fund appropriate public services and address the 
        liquidity crisis. \9\
---------------------------------------------------------------------------
     \9\ ``Afghanistan Is on a Countdown to Economic Collapse'', 
https://www.nrc.no/news/2021/september/afghanistan-is-on-a-countdown-
to-economic-collapse/.

    After visiting Afghanistan last month, Peter Maurer, head of the 
International Committee of the Red Cross, warned of ``conditional 
humanitarianism.'' Humanitarian action should not be conditioned on 
political, human rights, or other stipulations, as it weakens respect 
for IHL and humanitarian actors. And it erodes principles of neutral, 
independent, and impartial humanitarian action. \10\
---------------------------------------------------------------------------
     \10\ ``High Level Ministerial Meeting on the Humanitarian 
Situation in Afghanistan'', https://www.icrc.org/en/document/president-
maurer-meeting-humanitarian-situation.
---------------------------------------------------------------------------
    Ensuring that assistance reaches the Afghan population is not just 
a moral and legal imperative, but one which also advances U.S. security 
interests. The risk of massive flows of refugees destabilizing the 
region and creating an environment conducive to the spread of terrorism 
is real. Continuation of humanitarian support and programs in 
Afghanistan, as well as efforts to stabilize the economic and financial 
system (minimizing the Taliban's benefit and maximizing the public's 
benefit) is the international community's best chance to avoid an 
economic and humanitarian catastrophe. \11\
---------------------------------------------------------------------------
     \11\ ``William Byrd on Afghanistan's Economic Crisis'', https://
www.usip.org/publications/2021/09/william-byrd-afghanistans-economic-
crisis.
---------------------------------------------------------------------------
Complications of Sanctions for Humanitarian Responses
    Preexisting sanctions by the United States and the United Nations 
make an already challenging operational environment for humanitarian 
actors in Afghanistan even more complicated.
    Following the bombings of U.S. Embassies in East Africa in 1998, 
the United Nations Security Council imposed sanctions on the Taliban. 
Initially under UNSCR 1267 and in 2011, as part of a new sanctions 
regime pursuant to UNSCR 1988, all member States must prohibit any 
``funds, financial assets, and economic resources'' from being provided 
to designated parties. In this regard, the U.N. 1988 regime targets 
individual members of the Taliban (but not the entity of the Taliban), 
currently consisting of 135 individuals plus five entities (the Haqqani 
network and four hawaladars). Of note, the majority (19) of the acting 
Taliban officials announced in September are sanctioned by the U.N., 
with at least 4 members of the Haqqani Network currently in charge of 
Afghan ministries (Interior, Telecommunications, Higher Education and 
Refugees). \12\ In addition to 1988 sanctions, the U.N. also sanctions 
al Qaeda and ISIL (UNSCR 1267/2253) which includes 12 individuals and 
20 entities affiliated with al Qaeda operating within Afghanistan.
---------------------------------------------------------------------------
     \12\ ``Afghanistan's U.N. Rep Slams Taliban's New Govt: 17 of 33 
Ministers Sanctioned by U.N.'', https://www.republicworld.com/world-
news/rest-of-the-world-news/afghanistans-un-rep-slams-talibans-new-
govt-17-of-33-ministers-sanctioned-by-un.html.
---------------------------------------------------------------------------
    In the U.S., the Taliban as an entity is designated as a Specially 
Designated Global Terrorists (SDGT) under E.O. 13224; the Haqqani 
Network is also a SDGT, as well as being designated as a Foreign 
Terrorist Organization (FTO) under section 219 of the Immigration and 
Nationality Act. Thus, the U.S. sanctions both leaders of the Taliban 
group as individuals, but also sanctions the Taliban as an entity. 
While these sanctions do not prohibit U.S. persons from exporting or 
reexporting goods or services into Afghanistan, the lack of clarity 
regarding precisely whom the Taliban is has created concern among NGOs. 
U.S. persons (and others given U.S. secondary sanctions) are prohibited 
from any dealings with the Taliban, at the risk of potential civil and 
criminal penalties.
    First, significant uncertainty over how to treat the Taliban as a 
sanctioned entity now that they are the de facto Government of 
Afghanistan exists . . . do sanctions apply to self-identified members 
of the Taliban or to the totality of the Afghan Government? Given that 
principled humanitarian assistance requires engagement with all parties 
to a conflict to secure access to the civilian population, the answer 
to this question has serious implications for humanitarian and civil 
society organizations, as well as financial institutions providing 
banking services to NGOs. The fact that that majority of acting Taliban 
officials are on U.N. or U.S. sanctions lists adds to the confusion as 
to whether entire ministries led by these individuals are also subject 
to sanctions. Payments of partnership money to ministries for joint 
implementation of civil society programs benefiting the populations are 
on hold until questions as to how ministries led by designated 
individuals should be treated are clarified. Further complicating the 
situation, countries implement sanctions differently, with the European 
Union and the United Kingdom closely aligning with U.N. sanctions, 
while the United States is more expansive in its scope.
    In light of outstanding questions regarding who is sanctioned, it 
is not surprising that financial institutions are being cautious, with 
many suspending transactions related to Afghanistan and even a few 
``derisking'' NGOs operating in Afghanistan. \13\ Concerns over 
reputational harm, potentially invasive audits by regulators, and the 
possibility of civil and criminal penalties should a transaction 
inadvertently involve the Taliban are pushing banks to avoid these 
risks instead of managing them. The chilling effect leads to 
disruptions of financial services and forces NGOs to scale back 
operations due to a lack of financial access and even altered programs 
(some NGOs have referred to programmatic decisions being made based on 
where banks will transfer funds, rather than purely on need)--with 
meaningful effects on civilians who rely on these services.
---------------------------------------------------------------------------
     \13\ Derisking entails denying or delaying financial access or the 
transfer of funds to humanitarian agencies out of concern of running 
afoul of regulatory requirements (i.e., sanctions, anti-money 
laundering, and countering the financing of terrorism). See ``Financial 
Access for U.S. Nonprofits''. February 2017. https://
www.charityandsecurity.org/system/files/Financial
AccessFullReport-2.21%20(2).pdf
---------------------------------------------------------------------------
    Finally, there is a lack of clarity over the scope and scale of 
authorizations provided. On 24 September, Treasury's Office of Foreign 
Assets Control (OFAC) issued two new general licenses (GL 14 and 15) 
along with four FAQs, authorizing humanitarian assistance or other 
activities that support basic human needs to Afghanistan. These actions 
and guidance were welcomed and extremely helpful to many NGOs, and the 
Biden administration is to be commended for taking these important 
steps.
    However, the scope of activities covered by the new GL 
authorizations is narrower than in other recent OFAC actions, raising 
questions as to how the range of civil society programs and services 
benefiting ordinary Afghans which the international community has 
supported for the past 20 years are to be treated. \14\ General 
Licenses issued by OFAC in 2021 for Yemen, Burma, and in September 
Ethiopia (and previously as applied to Venezuela), have included a 
broad range of authorized humanitarian and civil society programs. 
These routinely include:
---------------------------------------------------------------------------
     \14\ ``Treasury Issues General Licenses and Guidance To Facilitate 
Humanitarian Assistance in Afghanistan'', https://home.treasury.gov/
news/press-releases/jy0372.

  1.  Activities to support humanitarian projects to meet basic human 
        needs, including drought and flood relief, the provision of 
        health services, assistance for vulnerable populations 
        including individuals with disabilities and the elderly, 
        environmental programs, and food, nutrition, and medicine 
---------------------------------------------------------------------------
        distribution.

  2.  Activities to support democracy building, including activities to 
        support rule of law, citizen participation, Government 
        accountability, universal human rights and fundamental 
        freedoms, access to information, and civil society development 
        projects;

  3.  Activities to support education, including combating illiteracy, 
        increasing access to education, international exchanges, and 
        assisting education reform projects;

  4.  Activities to support noncommercial development projects directly 
        benefiting the people of the sanctioned country, including 
        preventing infectious disease and promoting maternal/child 
        health, sustainable agriculture, and clean water assistance; 
        and

  5.  Activities to support environmental protection, including the 
        preservation and protection of threatened or endangered species 
        and the remediation of pollution or other environmental damage. 
        \15\
---------------------------------------------------------------------------
     \15\ Language contained in Yemen, Burma, and Ethiopia General 
Licenses.

    In the case of GL 14 and 15 for Afghanistan, however, the scope of 
authorized activities is much narrower and limited to transactions, 
``that are ordinarily incident and necessary to the exportation or 
reexportation of agricultural commodities, medicine, medical devices, 
replacement parts and components for medical devices, or software 
updates for medical devices to Afghanistan, or to persons in third 
countries purchasing specifically for resale to Afghanistan. \16\
---------------------------------------------------------------------------
     \16\ See GL 14 and FAQ 928.
---------------------------------------------------------------------------
    While broad agreement exists that no support should be provided to 
the Taliban, NGOs have significant concerns as to whether and how other 
assistance activities will be permitted to continue. According to 
reports of the Special Inspector General for the Reconstruction of 
Afghanistan (SIGAR), the U.S. has spent $145 billion rebuilding 
Afghanistan in the past 20 years--with billions going to USAID's long 
term development programming. Many NGOs are looking for clarity and 
confirmation that that USAID's basic development sectors of 
agriculture, education, democracy and governance, health, and economic 
growth among others, would be authorized under a GL and permitted to 
continue. Programs beyond basic human needs to promote education, 
governance, human rights and protection, and peacebuilding are vital to 
preserve and build upon gains made by and for the Afghan population 
during the last two decades.
Other Challenges Faced by NGOs
    Aside from ongoing uncertainty as to permitted transactions, NGOs' 
most significant problem in getting assistance into Afghanistan relates 
to the limitations in moving cash into Afghanistan. The U.S.' freezing 
of foreign reserves and suspension of international assistance through 
the World Bank and IMF have resulted in a shortage of cash (USD and 
AFN) and severe liquidity crises affecting NGO operations.
    Without access to its foreign reserves, the Central Bank (DAB) has 
set limits on a range of financial activities, including cash 
withdrawals for individuals and corporate payments between banks, and 
unavailability of corporate banking services. Without the ability to 
import USD notes, the scarcity of cash will continue: NGOs report that 
the cash flow crises in Afghanistan is getting worse with every passing 
day: people waiting on line for hours to withdraw limited funds and 
banks are running out of cash, asking individuals to register and wait 
until they get physical cash with some staff waiting more than 3 weeks. 
Foreign remittances are blocked, and the banking system is barely able 
to operate. With such a scarcity of cash, NGOs are not able to pay 
suppliers, contractors, vendors, and most importantly national staff. 
Everybody wants to be paid either by cash or outside of country which 
refers to another layer of difficulties in terms legality, due 
diligence, compliance as well as security issues linked to physical 
handling of cash.
    Moreover, devaluation of AFN currency and high inflation are making 
it more difficult to maintain financial frameworks for NGO operations; 
several fear that the collapse of the banking sector if the Government 
continues to be unable to access Government accounts held externally 
(which remains explicitly prohibited in OFAC GL14). Informal methods of 
moving money have also proven to be inadequate. While hawalas are an 
option for cash transfer, they are not generally a reliable one. 
Problems associated with screening hawalas, high fees, and the fact 
that hawalas will not have enough cash to meet NGO needs (some NGOs 
estimates that the sector needs as much as $3 million USD/day) limit 
the utility of such methods.
Recommendations To Address Humanitarian Challenges in Afghanistan
    The Biden administration has been supportive of NGOs continuing to 
provide their essential assistance in Afghanistan, and the September 
OFAC GLs represent important steps in clarifying permissible NGO 
activities. Additional action is needed, however, in the near term to 
avert a humanitarian catastrophe. As in past cases of severe 
humanitarian need (such as 2010-11 famine in Somalia, or in response to 
the natural disasters), the U.S. should be forward-leaning and provide 
broad grants of authority and legal certainty to NGOs, as well as the 
financial institutions providing services to support these activities. 
This should happen in several ways.
    First, OFAC should continue to broaden and clarify the scope of 
authorized activities for Afghanistan. Additional GLs authorizing other 
NGO programs, including ongoing development programs that benefit the 
Afghan population, not the Taliban, should be issued as the most 
expeditious way to ensure civilians continue to receive vital 
assistance.
    Important NGO programs providing services to Afghan citizens in the 
areas of protection and prevention (such as atrocities prevention, 
protection of human rights defenders, protection of religious and 
ethnic minorities or early warning and response systems and rights-
based education initiatives), women's rights (addressing women's 
economic empowerment, support to women-led civil society, prevention of 
gender-based violence, etc.) and conflict and stabilization (such as 
community-level dialogue, conflict prevention, mediation, conflict 
resolution, and violence prevention at the local level) should be 
continued and authorized through general licenses.
    Second, the United States should clarify to whom the sanctions 
apply. Is the Taliban deemed to have an interest in the Government of 
Afghanistan and, if so, whether the Afghanistan Government's assets are 
blocked and transactions with it are prohibited? Since the Taliban is 
the de facto Government, do sanctions apply broadly to the entirety of 
the Government, or just the designated ministers? And if a minister is 
sanctioned, does that mean any dealings with their ministry are 
prohibited? Further clarifications and legal protection are necessary 
for payments to be processed in support of these programs. In addition 
to GLs, providing NGOs and financial institutions with official 
assurance codifying OFAC's no enforcement policy that inadvertent 
violations will not be the basis of enforcement actions if due 
diligence is exercised, could go a long way toward mitigating risk 
aversion.
    Third, because it is likely to be months before the Afghan 
financial system stabilizes with international payments in support of 
humanitarian and civil society NGOs being regularized, the U.S., 
together with international partners, financial institutions, and NGOs, 
need to develop a safe and reliable system to move humanitarian funds 
into Afghanistan. A viable mechanism to support these important 
programs in a way that does not benefit the Taliban but ensures 
necessary funds, goods, and services are able to be transferred into 
the country with appropriate protections is necessary to forestall a 
widespread humanitarian and economic collapse.
    Fourth, the U.S. needs to work within the Security Council to 
create safeguards to ensure humanitarian action can continue in 
Afghanistan. Clear guidance is needed, not only from national 
regulatory authorities, but also from the 1988 Taliban sanctions 
committee to clarify that sanctions are not intended to impede 
humanitarian action, and that Member States must refrain from any 
measures or restrictions on humanitarian activities carried out by 
impartial humanitarian actors--building on UNSCR 2462's requirement 
that States must implement sanctions consistent with their obligations 
under International Humanitarian Law.
    Further, explicit measures to safeguard humanitarian activities and 
the provision of essential goods and services in Afghanistan should 
authorized through the adoption of an exception. An exception or 
``carve-out'' as currently exists in the UNSCR 751 regime regarding 
Somalia is needed for transactions and other activities required for 
humanitarian activities and for the provision of essential supplies and 
services in Afghanistan. The Somalia regime provides a precedent upon 
which to build to ensure that all impartial humanitarian organizations' 
activities and transactions required to provide essential supplies and 
services in Afghanistan can continue.
    Fifth, the U.S. needs to work closely with allies to harmonize 
policies and regulatory practices, as well as engage with other 
countries that have relationships with Afghanistan. Recognizing 
national interests of other countries such as Russia, China and 
Pakistan vary, all States have common interest in ensuring that 
Afghanistan does not become a safe haven for al Qaeda and other 
terrorist groups, ensuring regional stability, managing refugee flows, 
and preventing a return by the Taliban to violence and practices of the 
past concerning women and minorities. Other countries with more 
influence on the Taliban, such as Qatar also represent opportunities 
for cooperative engagement.
    Sixth, the USG needs to engage banks and other financial and money 
service providers, insurance and transportation companies, and 
exporters to provide assurances that they will not be violating 
sanctions by authorizing and facilitating transactions that are 
permitted under licenses or a U.N. exception. This includes the 
issuance of ``comfort letters'' and other forms of guidance and 
encouragement to the private sector as a means of effective risk 
sharing among stakeholders.
Long-Term Systemic Reform Is Necessary
    While the focus of today's hearing is clearly on the immediate 
crises in Afghanistan and finding ways to maintain existing 
humanitarian and civil society programs and activities in Afghanistan 
that benefit the Afghan people, this crisis brings into sharp relief 
the complicated interplay between sanctions and humanitarian action.
    Time after time when there are crises in countries subject to 
sanctions, the U.S. regulatory system goes through a difficult process 
to clarify, define, and except humanitarian action. Just this year, 
we've been faced with the threat of withholding humanitarian assistance 
in Yemen (following the designation of Ansarallah in January 2021), 
Burma, Ethiopia, and Afghanistan. There is a need for systemic reform 
to create standing carve-outs for humanitarian action.
    In fact, when Congress passed the International Emergency Economic 
Powers Act, \17\ the foundational authority for Treasury's financial 
sanctions, it included Section 203(b) a humanitarian exemption. Since 
9/11, however, most terrorism-related Executive orders issued under 
IEEPA automatically waive this exemption without rationale. In doing 
so, humanitarian aid is treated as prohibited transactions with 
designated terrorist organizations, affecting everything from 
negotiating access to civilians to coordinated rescues during 
earthquakes and floods. \18\ It's time to restore the Congressionally 
mandated humanitarian exception and reform the financial sanctions 
framework so general licenses do not have to be created each time. 
Humanitarian exceptions should also be routinely included in U.N. 
Security Council sanctions as well.
---------------------------------------------------------------------------
     \17\ Public Law 95-223, 28 December 1977. ``(2) donations, by 
persons subject to the jurisdiction of the United States, of articles, 
such as food, clothing, and medicine, intended to be used to relieve 
human suffering, except to the extent that the President determines 
that such donations (A) would seriously impair his ability to deal with 
any national emergency declared under section 202 of this title.''
     \18\ Charity & Security Network, ``Proposals for New Congress and 
Biden-Harris Administration To Support and Facilitate Humanitarian and 
Peacebuilding Operations Through Nongovernmental Organizations'', 
https://charityandsecurity.org/wp-content/uploads/2021/03/CSN-
Transition-Memo-V4.pdf.
---------------------------------------------------------------------------
    Distinguished Members of the Committee, significant U.S. security 
and foreign policy interests are at stake with the Taliban's recontrol 
of Afghanistan. A serious assessment of the past two decades of U.S. 
policy is certainly in order as we seek to learn from this tragic 
experience. As the U.S. respond to the many challenges in Afghanistan, 
it's important that sanctions do not further compound the humanitarian 
crisis evolving on the ground in which real people are suffering. The 
U.S. and the international community maintain valuable leverage to 
influence the Taliban through frozen reserves and assets, continued 
sanctions, and ultimately, recognition. But humanitarian assistance 
should not be conditional--it's fundamental to U.S. values and 
commitments to protect human rights and international humanitarian law. 
``Saving lives and also saving livelihoods'' is the best way of 
achieving U.S. objectives to prevent Afghanistan from becoming again a 
safe haven for terrorists, precipitating a refugee crisis, and 
maintaining regional stability. A humanitarian catastrophe and collapse 
of the economy would have devastating consequences for millions of 
people and risk destabilizing neighboring countries--an outcome that 
serves noone's interests.
    The U.S. has invested much in Afghanistan and its' people over the 
past 20 years; the U.S. must continue critical assistance programs and 
support the broad range of NGOs' activities and access in Afghanistan 
through urgent and coordinated action with international partners.
                                 ______
                                 
                 PREPARED STATEMENT OF THOMAS JOSCELYN
          Senior Fellow, Foundation for Defense of Democracies
                            October 5, 2021

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                       FROM ADAM M. SMITH

Q.1. Some have suggested using U.N. agencies as a conduit to 
continue humanitarian, development, and reconstruction aid to 
Afghanistan, even though its mission has been hampered by the 
need to evacuate many of its staff in the wake of the Taliban 
takeover.
    If the legal arrangements could be worked out, would U.N. 
entities be a viable means--a safe channel--to provide not only 
aid from Western Governments directly to the Afghan people, 
bypassing the Taliban Government, but also to use at least a 
portion of Afghanistan's currency reserves to provide such aid? 
How would this likely work, as a practical matter?

A.1. The U.N. agencies--in addition to the Bretton Wood 
institutions--could be viable means to leverage in order to 
provide aid to the Afghan people. Some agencies, like UNICEF, 
already have experience in making direct payments to parties 
outside the Taliban's purview (even in areas that have been 
under Taliban control even before the formal takeover). U.N. 
agencies and multilateral development banks (both the IBRD and 
the Asian Development Bank) have significant experience in 
working in challenging environments and leveraging both their 
good offices and the expertise of their personnel to prioritize 
certain forms of aid and strategize for its delivery.
    The source of any development funds to be deployed is a 
distinct question and should be delinked from the mechanisms of 
delivery. It is not clear that domestic foreign currency 
reserves can be used without Taliban oversight (assuming that 
such funds are housed at the Central Bank which is now run by 
the Taliban). Rather, any funds could be provided directly to 
the U.N. agencies or others who are vetted by foreign 
officials. The Taliban could be informed that any interference 
in delivery will lead to the immediate cessation of such funds. 
Alternatively, the international community could focus on in-
kind aid in the immediate term, rather than cash transfers.

Q.2. Since the Taliban takeover in August, daily and weekly 
limits have reportedly been placed on bank withdrawals, due to 
currency shortages in-country. This has forced an even greater 
reliance on the Hawala system, which most Afghans use--but that 
system is also reportedly strained.
    What do you think U.S. and other Western Governments should 
be doing now to ease the economic strain on ordinary Afghan 
families caused by currency shortages--besides allowing an 
expansion of personal and family remittances through entities 
like Western Union and Money Gram, now restored after being 
briefly cut off, to flow into Afghanistan?

A.2. In the immediate term the United States and other Western 
Governments should work on the mass expansion of in-kind aid 
delivery (rather than cash payments). With winter quickly upon 
Afghanistan the need for heating, clothes, blankets, food, and 
medicine are critical if the international community seeks to 
arrest a near-certain humanitarian emergency. The importance of 
in-kind deliveries comes not just because of the absence of 
such goods in the Afghan market, but the reality that it is 
very difficult to get money into the country even if goods 
existed to buy. The U.N.'s Office for the Coordination of 
Humanitarian Affairs (OCHA) reports that 89 percent of NGOs are 
unable to bring any money (of whatever currency) into the 
country.
    In addition to in-kind aid, the international community 
must urgently clarify how to interpret the scope of both U.S. 
sanctions on the Taliban, and U.N. Security Council Resolution 
1988. The international aid community has interpreted both U.S. 
and U.N. sanctions to extend not only to named individuals or 
entities, but also to every person who works with or on behalf 
of an agency that is run by a listed person. For example, this 
has meant that line workers providing key services on behalf of 
the Ministry of the Interior are being denied payments by the 
international community because their ministry is being run by 
a sanctioned individual. That aggressive interpretation has 
never been employed in other sanctions programs--and the 
international community must act quickly to publicize and 
clarify that that is not the case here.

Q.3. Since just after 9/11, the Taliban has been a Specially 
Designated Global Terrorist organization, and its leaders and 
many of its members have been designated separately as well. 
Entities or individuals listed under that authority are 
effectively blacklisted from the U.S. financial system, and 
from the global financial system because the restrictions apply 
with respect to U.S. persons, U.S. banks, or transactions that 
might traverse the United States, including most U.S. dollar 
trade around the world.
    Can you discuss the legal implications of that designation 
and what it means for organizations operating in Afghanistan? 
What if anything more should Treasury do to clarify its 
enforcement policy for aid organizations working in the region, 
to enable them to continue to operate effectively?

A.3. The U.S. Treasury's sanctions system--operated principally 
by the Office of Foreign Assets Control (OFAC)--is enormously 
successful in restricting the ability of named parties to 
access the global, formal financial system. As a legal matter, 
individuals or entities named as Specially Designated Global 
Terrorists appear on the Specially Designated Nationals and 
Blocked Persons List (the ``SDN List'') and any property they 
own that is in U.S. jurisdiction (or that comes into U.S. 
jurisdiction) is frozen. Additionally, any entity that is owned 
50 percent or more by a listed party is itself blocked (even if 
that entity does not appear on the SDN List itself). Parties 
that continue to deal with sanctioned or blocked persons--or 
who are deemed to ``cause'' other parties to deal with such 
persons--can face both substantial criminal and civil 
consequences.
    There are two additional impacts of being listed. First, 
because the vast majority of global trade continues to be 
conducted in the U.S. Dollar--and most U.S. Dollar transactions 
require a financial institution under U.S. jurisdiction to 
serve as a correspondent bank--listed parties are essentially 
shut out of the global U.S. dollar-based trading system. And, 
second, given OFAC's professionalism (all employees at OFAC are 
career civil servants--many of whom have devoted their entire 
professional careers to the agency), and the ubiquity of the 
U.S. Dollar, numerous financial institutions and corporations 
throughout the world choose to comply with U.S. sanctions even 
if they are not legally obligated to do so. As such, a listed 
party can find themselves outside the formal financial system 
almost no matter where they work in the world or in what 
currency they choose to operate.
    The shadow of the SDN List--on which the Taliban, the 
Haqqani Network, and numerous related individuals appear--makes 
it very challenging and risky for any party to transact with 
them. The challenge comes from the fact that counterparty 
institutions critical for any work in Afghanistan (financial 
intermediaries and providers of logistics and aid) will 
potentially be unwilling to play a part for fear of tripping up 
their own sanctions compliance obligations. And, second, while 
perhaps unlikely, there is a theoretical risk that aid groups 
could find themselves sanctioned or enforced against for 
providing support to the Taliban and/or the Haqqani Network. 
The Executive orders underlying almost all sanctions programs 
(including the Specially Designated Global Terrorist program) 
include the provision of ``material support'' to listed parties 
as a potential basis for designation. Indeed, there have been 
several nominally charitable groups that have found themselves 
listed and/or enforced against for providing aid to sanctioned 
terrorist groups.
    Given the impact of even potentially being designated or 
enforced against, the U.S. Government needs to lean forward to 
provide clarity and comfort with respect to what sorts of 
activities with the Taliban and the Haqqani Network are 
permitted and what sort of activities will not give rise to 
enforcement. On the permission side of the equation, OFAC has 
only issued two general licenses. While a good start, they need 
to be broader and clearer. They only extend to humanitarian 
activity, which is undefined but clearly falls short of 
``development'' activities. As the U.N. Secretary General made 
clear, saving livelihood is critical to saving lives in 
Afghanistan. As such, the U.S. Government should consider the 
careful expansion of these licenses to include more than 
emergency humanitarian provision.
    To provide a sense of what might be needed, in my testimony 
I spoke about the designation of the Venezuelan Government. In 
that context, in an effort to limit the collateral consequences 
on innocent Venezuelans (while restricting the flow of funds to 
the regime of Nicolas Maduro) OFAC has issued several dozen 
licenses of various sorts to permit a wide of transactions 
needed to support the livelihoods (and the future) of 
Venezuelan citizens. Similarly, in the context of the 
Palestinian Authority, the U.S. has also provided general 
licenses. In 2006 when Hamas assumed the majority party within 
the Palestinian Legislative Council OFAC provided that U.S. 
persons were prohibited from engaging with the Palestinian 
Authority unless licensed. OFAC quickly issued several broad 
general licenses authorizing transactions with the PA, fees and 
tax payments, and transactions undertaken with parts of the PA 
in which Hamas was not present.
    Every case is different, but both the Venezuela and the PA 
situations make clear that two general licenses--limited solely 
to the immediate humanitarian needs of the populace--are 
insufficient to provide for the Afghan people and to meet U.S. 
interests in the country.
    With respect to enforcement, OFAC could follow the example 
set in the Somalia context and underline that it will not 
pursue enforcement actions in cases in which incidental 
benefits accrue to the Taliban or the Haqqani Network in the 
process of delivery of aid or other services.

Q.4. In your written testimony to the Committee, and in your 
oral presentations, you both advocated for expanded use of 
OFAC's General Licenses to allow for the delivery of food, 
medicine, and related items. For some time, the Taliban have 
raised revenue by ``taxing'' or imposing surcharges on the 
illegal movement of ordinary goods, like fuel and consumer 
imports.
    Given our shared desire to facilitate the delivery of 
humanitarian and development aid while denying any benefit to 
the Taliban or its allies, how would you suggest restructuring 
western aid delivery mechanisms to avoid the kind of sanctions 
``leakage'' you talked about--including denying the ability of 
the Taliban to benefit from the imposition of illegal 
surcharges, taxes, or other fees on aid?

A.4. As noted above and in my testimony, there does not appear 
to be a way to completely eliminate leakage of aid to the 
Taliban and its allies. However, there are ways to reduce the 
amount of such leakage. A key way will be to move towards 
greater reliance on in-kind aid rather than cash payments. Cash 
is difficult to get into the country and the risk of ``taxes'' 
(or outright theft) of large quantities of hard currency bills 
is very high. It is possible for the Taliban to purloin aid 
delivery as well but it is harder to do so and harder to 
monetize--as a consequence, in-kind aid is more likely to be 
received.
    A second approach that I know the World Bank and others are 
assessing, is to develop an electronic payments system for the 
country. Cell phone penetration in Afghanistan is very high and 
there are numerous technologies available to roll out cell 
phone-based e-payment systems that would allow the delivery of 
electronic money to persons directly and then permit them to 
purchase goods using their phones. While this technology is 
well-tested and used in many parts of the world, the difficulty 
in Afghanistan is an absence of trust in the economic system 
and the likely desire for participants to cash out of the e-
money system in order to secure hard currency. While such an 
electronic payment system is a potentially promising avenue--
especially if the printing of hard currency Afghanis proves 
difficult to restart--it is likely a midterm solution rather 
than one that can arrest the onset of the immediate crisis.
                                ------                                


         RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED
                       FROM ADAM M. SMITH

Q.1. What are your thoughts on the best way to structure 
sanctions on the Taliban?

A.1. The United States needs to continue sanctioning the 
Taliban but needs to do so in a thoughtful and targeted manner. 
We need to focus on the right entities and to ensure that 
interpretations of the restrictions and exceptions to them are 
clear and in line with our policy interests. To that end, OFAC 
must clarify the extent of the ``Taliban'' sanctions. It must 
provide clarity if the sanctions extend to the work of all 
employees of all ministries under Taliban and/or Haqqani 
Network control--this is an interpretation that is very 
prevalent in the international aid community and is proving to 
be a significant hindrance to the delivery of critical 
supplies. Additionally, the United States must clarify if the 
exemptions also extend to any commercial imports into 
Afghanistan that are not purely ``humanitarian'' in nature. 
This may require a new set of licenses. If the U.S. Government 
does not seek to encourage commerce (in addition to providing 
humanitarian support) viable, non-opium-related business will 
wither, as will any educational or health care advancements 
that were seen during the past two decades. As such, I would 
recommend a careful and targeting broadening of the exceptions 
to dealings with the Taliban and the Haqqani Network so as to 
promote legal commercial activities outside the grasp of 
narcotics dealers and terrorists.

Q.2. What is your assessment of how the Trump administration's 
unilateral negotiation of the Doha Agreement affected our 
ability to work with allies and partners using the nonmilitary 
tools of national security making?

A.2. Multilateralism is critical for successful diplomacy in 
almost all cases involving complex international problems with 
numerous, cross-cutting equities like in Afghanistan. The Trump 
administration's highly unilateral approach to dealing with 
Afghanistan made it difficult for the United States to gain the 
support from and trust of core allies who had been fighting 
with us in Afghanistan for decades. The Doha Agreement, which 
set up the unilateral departure, removed key partners from the 
equation and have made it difficult on a going forward basis to 
rely on them to assist in Afghanistan's new chapter. Such 
countries' willingness to assist in the aid efforts, in 
maintaining strong, nuanced sanctions on the Taliban and the 
Haqqani Network, and even engaging with the new Afghanistan 
Government is much less more subdued than it would have been if 
they had all been consulted and engaged with as partners in the 
lead up to the departure.

Q.3. What role do you think our allies and partners should play 
in structuring effective sanctions? What should the role of 
multilateral institutions be in this process--including the 
U.N., the EU, or the G7?

A.3. The multilateralization of sanctions is always preferable. 
While the United States benefits due to the role of the U.S. 
Dollar and remains the most important sanctions actor 
unilaterally, we know from experience that if the European 
Union, the United Kingdom, the G7, and even the United Nations, 
are able to impose parallel measures the consistency and impact 
of sanctions will be greatly improved. In this case the 
existence of a U.N. sanctions program (under U.N. Security 
Council Resolution 1988) makes it even more important to 
achieve international buy in. There is no consistency of 
interpretation of Resolution 1988 which has left many aid 
groups uncertain as to their ability to provide assistance into 
Afghanistan. The U.N. needs to clarify its interpretation of--
and provide needed exceptions to--the Resolution in order to 
meet the international community's goals.
    I recognize that going forward the Security Council may be 
too divided to impose new nuanced sanctions measures. The veto 
powers of the P5 may make that impossible. However, as we know 
from situations including Yemen and Syria, the United States 
has been able to develop sanctions coalitions that allowed a 
great deal of coordination of sanctions authorities without the 
U.N. imprimatur. The United States develop a ``Friends of'' 
model in these cases in which the Security Council proved 
unable to move forward. I would strongly recommend that the 
United States work towards a similar ``like minded'' grouping 
to assist the people of Afghanistan.

Q.4. Are there ways to free up currency to the Afghan people 
without it flowing through a Taliban Government?

A.4. The importance of cash in the Afghan economy and the 
shortage of notes (both hard currency U.S. Dollars and 
Afghanis) threatens a major economic collapse. As such, finding 
a way to get currency into Afghanistan is critical--and doing 
so while limiting any benefit to the Taliban Government equally 
so. While different strategies are possible, the one that is 
likely the easiest in the short term is to leverage the 
structure and professionalism of one of an Afghani private 
financial institution to take on the role of the Central Bank 
(which is now under the control of the Taliban). A bank such as 
AIB--which is likely the most sophisticated, westernized, and 
regulation-driven institution in the country--could be up to 
the task. AIB could serve the role as depository of hard 
currency, as the holder of auctions for the currency, and the 
provider of necessary financing and liquidity. However, the 
U.S. Government would have to be willing to provide hard 
currency to the AIB which is certainly risky. Despite this, 
given the dire situation in Afghanistan it might be possible to 
convince the Taliban that such an avenue needs to be protected 
if the entire country is to be spared from economic calamity.
    A medium term approach that the World Bank and others are 
considering is to lean into digital payments rather than hard 
currency payments. The cell phone penetration in the country is 
very high and if the network was developed e-payments from cell 
phone to cell phone could end run around both the shortage of 
hard currency notes and the Taliban's avariciousness.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                       FROM ADAM M. SMITH

Q.1. Money laundering and terrorist financing remains a global 
threat that is especially pervasive in Nations and regions 
immediately after a significant destabilizing event such as a 
swift and violent regime change like the one Afghanistan 
experienced in August. How do you assess the networks financing 
the Taliban following the August takeover? Do you understand 
there to be any significant changes to these networks?

A.1. I am not aware of any meaningful changes in these networks 
since the August takeover.

Q.2. In recent years, cryptocurrencies and other emerging 
decentralized finance products have created new opportunities 
for economic development in many communities, including in 
Arizona. However, organized crime networks and other bad actors 
have also begun to utilize these products to launder money to 
support criminal and terrorist operations. What steps can 
businesses that facilitate the transfer and use of 
cryptocurrencies take to prevent their platforms from being 
used for illicit purposes? How can Treasury empower businesses 
to take these steps?

A.2. Treasury needs to provide more guidance to the industry 
and to do so must balance regulation against the need for 
innovation and the reality that regulation will always be 
playing catch up with technology. This is an area in which 
public-private partnerships, to educate each other and develop 
best practices, are critical. Clarity is especially needed at 
the point of interface between offline fiat transactions and 
cryptocurrencies. Without that clarity it is possible that 
either the industry could be needlessly hobbled or could 
quickly migrate into areas much more challenging for regulatory 
oversight and enforcement.

Q.3. The United Nations reported in June 2021 that the Taliban 
reaps hundreds of millions of dollars in income from the poppy 
harvest and drug trade, which may continue to be the Taliban 
Government's largest source of revenue. Our servicemembers 
fought to curtail drug production and worked with the Counter-
Narcotics Police of Afghanistan to limit those illicit 
activities. What can we do now to limit opiate production and 
prevent those drugs from finding their way to America?

A.3. The lure of opium production as a viable source of hard 
currency for an Afghan economy that lacks much else makes the 
likelihood of opium returning to the forefront of Government 
revenue sources under Taliban leadership very high. As such, 
there are only two options. The first, is to promote 
eradication of crops which will be difficult now that the 
United States has departed. The second, longer-term solution, 
is to encourage education and opportunities outside the illegal 
drug sector. Focusing on development and the promotion of legal 
enterprises, demonstrating the possibility for a livelihood in 
other areas, is the only certain way to move the country away 
from its dependence.

Q.4. In September 2021, Treasury's Office of Foreign Assets 
Control issued two licenses authorizing humanitarian assistance 
and exportation of medical devices, pharmaceuticals, and food 
and livestock to Afghanistan. These permitted transactions with 
the Taliban or Haqqani network. How do you evaluate the 
benefits and risks to providing this aid? How can U.S. funding 
and resources be most effectively deployed, and with which 
Nations, international governing bodies, or nongovernmental 
organizations should the U.S. partner to accomplish this?

A.4. The two general licenses are a good start but will likely 
be insufficient to provide Afghanistan with what it needs and 
to meet U.S. policy interests in the country and the region. 
The two licenses are limited to providing humanitarian aid, 
excluding assistance for development or education, for example. 
In the immediate term the licenses should assist in providing 
comfort to encourage aid groups to provide assistance. However, 
in the medium term they will not allow aid agencies to provide 
for education and development opportunities critical to 
establishing a viable state for Afghanis and preventing either 
a complete Taliban-ization of the country or a disintegration 
of the State. There are risks, of course, to providing any aid 
into Afghanistan given the possibility for the Taliban to seize 
some of it. However, if the aid is principally in-kind (rather 
than cash) and the United States leverages experienced 
multilateral actors (like the U.N. agencies, the World Bank, 
and other multilateral development banks) the possibility of 
leakage to the Taliban reduces substantially.

Q.5. Treasury sanctions relating to Afghanistan are primarily 
directed toward the Afghan Taliban and not toward the 
Government of Afghanistan. However, the Taliban now controls 
the majority of former Afghan Government assets, including Da 
Afghanistan Bank (DAB), Afghanistan's central bank. The Federal 
Reserve currently holds over $9 billion in frozen assets 
belonging to DAB. Do these frozen assets provide the U.S. 
Government sufficient leverage to negotiate for more 
humanitarian policies as the Taliban moves to govern?

A.5. It does not appear that the Federal Reserve's continued 
freezing of the DAB's account provides leverage over the 
Taliban. The Taliban would clearly like this money but simply 
releasing it would not provide the Afghan economy the necessary 
ballast to continue functioning. There are systemic and 
systematic concerns in the economy--including the inability to 
get currency into the country and the shortages of Afghani 
notes (given the cessation of printing)--neither of which would 
be ameliorated by the release of these funds. As such, given 
both the Taliban's philosophical bent and that the Federal 
Reserve funds would not be a panacea, it is not surprising that 
the continued hold fails to provide substantial leverage to 
encourage the Taliban's behavior.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                       FROM NAHEED FARID

Q.1. The United Nations reported in June 2021 that the Taliban 
reaps hundreds of millions of dollars in income from the poppy 
harvest and drug trade, which may continue to be the Taliban 
Government's largest source of revenue. Our servicemembers 
fought to curtail drug production and worked with the Counter-
Narcotics Police of Afghanistan to limit those illicit 
activities. What can we do now to limit opiate production and 
prevent those drugs from finding their way to America?

A.1. The drug trade is one of the largest sources of income for 
the Taliban. As Afghanistan's economy teeters on total 
collapse, and the Taliban struggles to pay salaries and 
operational costs for its own soldiers, let alone millions of 
former Government employees and departments, we are likely to 
witness a significant increase in opiate production and 
trafficking by the Taliban and its terrorist allies. Outside of 
international aid, they simply do not have any other means of 
generating large sums of income right now.
    Unfortunately, America has limited options available to 
stop the Taliban from engaging in the drug trade. It can 
monitor and track production and trafficking through drones and 
other means. It can urge neighboring countries such as Pakistan 
and Iran to intervene and seize shipments. But America cannot 
change the Taliban's official policy, dating back 25 years, of 
growing and selling drugs. Absent an intervention from U.S. 
servicemembers or empowered allied Afghan forces, the Taliban 
will not stop its involvement in the drug trade. In the 
immediate term, maintaining and enhancing a sanctions regime 
that targets Taliban leadership, and all those individuals and 
entities that support their illicit drug trade, would be the 
most effective course of action.

Q.2. In September 2021, Treasury's Office of Foreign Assets 
Control issued two licenses authorizing humanitarian assistance 
and exportation of medical devices, pharmaceuticals, and food 
and livestock to Afghanistan. These permitted transactions with 
the Taliban or Haqqani network. How do you evaluate the 
benefits and risks to providing this aid? How can U.S. funding 
and resources be most effectively deployed, and with which 
Nations, international governing bodies, or nongovernmental 
organizations should the U.S. partner to accomplish this?

A.2. Afghanistan is in the midst of an unprecedented 
humanitarian disaster. The economy and health care system are 
failing. There are millions of IDP's stranded, unable or 
unwilling to return home. And according to a recent U.N. report 
more than 45 percent of the country faces an acute food crisis. 
There is no question that the people of Afghanistan desperately 
need assistance. The OFAC licenses are a lifeline to the Afghan 
people. But they also come with the obvious risk of empowering 
and enriching a Taliban regime and its terrorist allies. We are 
already seeing signs of both happening. I have heard reports of 
large NGO's and multilateral organizations sidelining female 
staff during direct interactions with the Taliban, and 
providing aid directly to Taliban leaders for their own 
personal use in return for permission to operate. The U.S. 
cannot give into the Taliban demands for unconditional aid. Aid 
to Afghanistan should be conditions based, it should empower 
our Afghan allies on the ground, and provide much needed 
employment and humanitarian relief to and tied to women's 
rights, human rights, democracy promotion, and freedom of 
speech.
    The Taliban have and will continue to use humanitarian aid 
as a weapon to increase its leverage over the Afghan people. We 
should aim not to benefit or enrich the Taliban in any way. No 
amount of aid should be tied to or lead to recognition and 
normalization of relations with the Taliban. By establishing 
humanitarian corridors in friendly neighbors such as 
Tajikistan, assistance can be provided. Working with local NGOs 
and civil society is the most effective way to deliver basic 
services directly to the neediest populations throughout the 
country, in the absence of a normal and functioning Government. 
Attached please find a list of trusted local NGOs that I and my 
committee have worked with throughout the years.

Q.3. Treasury sanctions relating to Afghanistan are primarily 
directed toward the Afghan Taliban and not toward the 
Government of Afghanistan. However, the Taliban now controls 
the majority of former Afghan Government assets, including Da 
Afghanistan Bank (DAB), Afghanistan's central bank. The Federal 
Reserve currently holds over $9 billion in frozen assets 
belonging to DAB. Do these frozen assets provide the U.S. 
Government sufficient leverage to negotiate for more 
humanitarian policies as the Taliban moves to govern?

A.3. No, I don't believe this money will provide the U.S. 
sufficient leverage to do such a thing because the Taliban will 
only promote the bare minimum humanitarian policies until funds 
are released. If the Taliban were to care about the Afghan 
people, then they would want to allow humanitarian aid to 
Afghans, since they do not have the capacity to provide basic 
services.
    At no point in their history has the Taliban proved to be 
honest brokers in any negotiations. The U.S. should not 
negotiate with a terrorist regime. Any concessions to the 
Taliban will only make them emboldened and will let the regime 
use the money against the Afghan people both militarily and 
politically. The Taliban has a long history of saying one 
thing, especially to western media and diplomats, and doing 
something entirely different on the ground. At its core the 
Taliban is a violent organization that uses fear and violence 
to control a large population with a relatively small force. At 
the DPPC we have been documenting human rights abuses that have 
occurred under Taliban rule, but do not get covered in 
mainstream or western media.
    In our latest report, which covers a 2-week period from 
late October through early November, there were 24 
extrajudicial killings across 16 provinces.
    Thank you for keeping the good work that benefits 
Afghanistan people and please keep them in your prayers too.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                        FROM SUE ECKERT

Q.1. Some have suggested using U.N. agencies as a conduit to 
continue humanitarian, development and reconstruction aid to 
Afghanistan, even though its mission has been hampered by the 
need to evacuate many of its staff in the wake of the Taliban 
takeover.
    If the legal arrangements could be worked out, would U.N. 
entities be a viable means--a safe channel--to provide not only 
aid from Western Governments directly to the Afghan people, 
bypassing the Taliban Government, but also to use at least a 
portion of Afghanistan's currency reserves to provide such aid? 
How would this likely work, as a practical matter?

A.1. Response not received in time for publication.

Q.2. In your written testimony to the Committee, and in your 
oral presentations, you both advocated for expanded use of 
OFAC's General Licenses to allow for the delivery of food, 
medicine, and related items. For some time, the Taliban have 
raised revenue by ``taxing'' or imposing surcharges on the 
illegal movement of ordinary goods, like fuel and consumer 
imports.
    Given our shared desire to facilitate the delivery of 
humanitarian and development aid while denying any benefit to 
the Taliban or its allies, how would you suggest restructuring 
western aid delivery mechanisms to avoid the kind of sanctions 
``leakage'' you talked about--including denying the ability of 
the Taliban to benefit from the imposition of illegal 
surcharges, taxes, or other fees on aid?

A.2. Response not received in time for publication.
                                ------                                


         RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED
                        FROM SUE ECKERT

Q.1. What are your thoughts on the best way to structure 
sanctions on the Taliban?

A.1. Response not received in time for publication.

Q.2. What is your assessment of how the Trump administration's 
unilateral negotiation of the Doha Agreement affected our 
ability to work with allies and partners using the nonmilitary 
tools of national security making?

A.2. Response not received in time for publication.

Q.3. What role do you think our allies and partners should play 
in structuring effective sanctions? What should the role of 
multilateral institutions be in this process--including the 
U.N., the EU, or the G7?

A.3. Response not received in time for publication.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                        FROM SUE ECKERT

Q.1. The United Nations reported in June 2021 that the Taliban 
reaps hundreds of millions of dollars in income from the poppy 
harvest and drug trade, which may continue to be the Taliban 
Government's largest source of revenue. Our servicemembers 
fought to curtail drug production and worked with the Counter-
Narcotics Police of Afghanistan to limit those illicit 
activities. What can we do now to limit opiate production and 
prevent those drugs from finding their way to America?

A.1. Response not received in time for publication.

Q.2. In September 2021, Treasury's Office of Foreign Assets 
Control issued two licenses authorizing humanitarian assistance 
and exportation of medical devices, pharmaceuticals, and food 
and livestock to Afghanistan. These permitted transactions with 
the Taliban or Haqqani network. How do you evaluate the 
benefits and risks to providing this aid? How can U.S. funding 
and resources be most effectively deployed, and with which 
Nations, international governing bodies, or nongovernmental 
organizations should the U.S. partner to accomplish this?

A.2. Response not received in time for publication.

Q.3. Treasury sanctions relating to Afghanistan are primarily 
directed toward the Afghan Taliban and not toward the 
Government of Afghanistan. However, the Taliban now controls 
the majority of former Afghan Government assets, including Da 
Afghanistan Bank (DAB), Afghanistan's central bank. The Federal 
Reserve currently holds over $9 billion in frozen assets 
belonging to DAB. Do these frozen assets provide the U.S. 
Government sufficient leverage to negotiate for more 
humanitarian policies as the Taliban moves to govern?

A.3. Response not received in time for publication.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                      FROM THOMAS JOSCELYN

Q.1. Money laundering and terrorist financing remains a global 
threat that is especially pervasive in Nations and regions 
immediately after a significant destabilizing event such as a 
swift and violent regime change like the one Afghanistan 
experienced in August. How do you assess the networks financing 
the Taliban following the August takeover? Do you understand 
there to be any significant changes to these networks?

A.1. The Taliban maintained multiple revenue streams throughout 
the nearly 20-year war, including from narcotics trafficking, 
wealthy donors, seemingly legitimate businesses and tax 
collection in the areas under the group's control. It is too 
early to fully assess how these networks have or will change, 
but I expect the Taliban's regime to receive more financial 
assistance from ideologically minded donors and other parties 
invested in the success of its Islamic emirate.

Q.2. In recent years, cryptocurrencies and other emerging 
decentralized finance products have created new opportunities 
for economic development in many communities, including in 
Arizona. However, organized crime networks and other bad actors 
have also begun to utilize these products to launder money to 
support criminal and terrorist operations. What steps can 
businesses that facilitate the transfer and use of 
cryptocurrencies take to prevent their platforms from being 
used for illicit purposes? How can Treasury empower businesses 
to take these steps?

A.2. This is a complex topic. In short, I think sunshine is the 
best disinfectant. The U.S. Treasury Department and other 
Government agencies should continue to educate businesses on 
the various nefarious schemes that are used to finance criminal 
and terrorist operations, including any involving 
cryptocurrencies. In particular, the U.S. Government should 
continue to flag instances in which known bad actors use 
cryptocurrencies in specific industries or transactions, 
alerting private businesses to the risks.

Q.3. The United Nations reported in June 2021 that the Taliban 
reaps hundreds of millions of dollars in income from the poppy 
harvest and drug trade, which may continue to be the Taliban 
Government's largest source of revenue. Our servicemembers 
fought to curtail drug production and worked with the Counter-
Narcotics Police of Afghanistan to limit those illicit 
activities. What can we do now to limit opiate production and 
prevent those drugs from finding their way to America?

A.3. First and foremost, the U.S. needs to keep exposing the 
Taliban members and affiliated actors who are profiting from 
the drug trade. The U.S. Government did this throughout the war 
by sanctioning key individuals, but there was always much more 
that could have been done. In some cases, additional sanctions 
are likely warranted. If the Taliban chooses to be a narco-
jihadist State, then the U.S. should make it clear to other 
countries that doing business with the Islamic Emirate of 
Afghanistan may implicate them in the drug trade and have 
various financial ramifications.

Q.4. In September 2021, Treasury's Office of Foreign Assets 
Control issued two licenses authorizing humanitarian assistance 
and exportation of medical devices, pharmaceuticals, and food 
and livestock to Afghanistan. These permitted transactions with 
the Taliban or Haqqani network. How do you evaluate the 
benefits and risks to providing this aid? How can U.S. funding 
and resources be most effectively deployed, and with which 
Nations, international governing bodies, or nongovernmental 
organizations should the U.S. partner to accomplish this?

A.4. As I and other witnesses recommended at the hearing, the 
U.S. should focus its aid efforts on foodstuffs and other 
commodities that are difficult to convert to cash. The risk 
with any such aid is that the Taliban, including the Haqqani 
Network, will use it for its own purposes and not for the 
intended recipients. I am not sure at this point which entities 
would be the best options for delivering aid.

Q.5. Treasury sanctions relating to Afghanistan are primarily 
directed toward the Afghan Taliban and not toward the 
Government of Afghanistan. However, the Taliban now controls 
the majority of former Afghan Government assets, including Da 
Afghanistan Bank (DAB), Afghanistan's central bank. The Federal 
Reserve currently holds over $9 billion in frozen assets 
belonging to DAB. Do these frozen assets provide the U.S. 
Government sufficient leverage to negotiate for more 
humanitarian policies as the Taliban moves to govern?

A.5. I am skeptical that these frozen assets provide the U.S. 
Government with much, if any, leverage. As I documented in my 
written testimony before both the Senate Banking Committee and, 
also recently, the Senate Armed Services Committee, the U.S. 
never had any real leverage over the Taliban going back to the 
1990s. For example, the U.S. and the United Nations threatened 
to sanction the Taliban's first regime if it didn't turn over 
Osama bin Laden. The Taliban chose to be sanctioned rather than 
give up the world's most wanted terrorist. More recently, the 
U.S. threatened to withhold aid if the Taliban used military 
force to overthrow the now former Government of Afghanistan. 
The Taliban chose military victory over cash. The Taliban 
certainly wants financial assistance, but I don't think this 
will lead the organization to moderate its behavior much at 
all. The Taliban's primary goal all along has been to rule 
according to its draconian version of Islamic law.