By Jonathan Stempel
NEW YORK (Reuters) -A&nbsp;U.S.&nbsp;judge&nbsp;decided on Tuesday that&nbsp;victims&nbsp;of the&nbsp;Sept.&nbsp;11, 2001, attacks are not entitled to&nbsp;seize&nbsp;$3.5 billion of&nbsp;assets&nbsp;belonging to&nbsp;Afghanistan's&nbsp;central&nbsp;bank&nbsp;to satisfy court judgments they obtained against the Taliban.
U.S. District&nbsp;Judge&nbsp;George Daniels in Manhattan said he was "constitutionally restrained" from finding that the Taliban was&nbsp;Afghanistan's legitimate government, a precursor for attaching&nbsp;assets&nbsp;belonging to Da&nbsp;Afghanistan&nbsp;Bank, or DAB.
Daniels said letting&nbsp;victims&nbsp;seize&nbsp;those&nbsp;assets&nbsp;would amount to a ruling that the Taliban are&nbsp;Afghanistan's legitimate government.
He said&nbsp;U.S. courts lack power to reach that conclusion, noting that Biden administration does not recognize the Taliban as&nbsp;Afghanistan's government.
"The judgment creditors are entitled to collect on their default judgments and be made whole for the worst terrorist attack in our nation's history, but they&nbsp;cannot&nbsp;do so with the funds of the&nbsp;central&nbsp;bank&nbsp;of&nbsp;Afghanistan," Daniels wrote.
"The Taliban - not the former Islamic Republic of&nbsp;Afghanistan or the&nbsp;Afghan&nbsp;people - must pay for the Taliban's liability in the 9/11&nbsp;attacks," he added.
Daniels' decision is a defeat for four groups&nbsp;of judgment creditors that claimed some of the $7 billion of DAB funds that had been frozen at the Federal Reserve&nbsp;Bank&nbsp;in New York.
"This decision deprives over 10,000 members of the 9/11&nbsp;community of their right to collect compensation from the Taliban," said Lee Wolosky, a lawyer for one creditor group known as the Havlish plaintiffs. "We believe it is wrongly decided and will appeal."
The other creditor groups&nbsp;are also planning an appeal, a separate Tuesday court filing shows.
In an executive order last February,&nbsp;U.S. President Joe Biden ordered $3.5 billion of the DAB funds set aside to benefit the&nbsp;Afghan&nbsp;people.
Last&nbsp;September, the&nbsp;U.S. Treasury said it would move that money to a Swiss-based trust beyond the Taliban's reach.
NOT THE TALIBAN'S MONEY
The creditor groups&nbsp;had sued many defendants, including al-Qaeda, over the&nbsp;Sept.&nbsp;11&nbsp;attacks, and obtained default judgments after the defendants failed to show up in court.
At the time of the attacks, the Taliban had allowed al-Qaeda to operate within&nbsp;Afghanistan.
The United States ousted the Taliban and al-Qaeda in late 2001, but the Taliban returned to power in 2021 when Western forces pulled out of the country.
In his 30-page decision, Daniels adopted findings of&nbsp;U.S. Magistrate&nbsp;Judge&nbsp;Sarah Netburn, who last August also recommended no recovery for the creditor groups.
Daniels said he lacked jurisdiction over DAB under federal law because the&nbsp;bank&nbsp;was an instrumentality of a foreign government and thus had immunity.
He also said&nbsp;Afghanistan, as opposed to the Taliban, neither qualified as a "terrorist party" nor had been designated a state sponsor of terrorism.
"Neither the Taliban nor the judgment creditors are entitled to raid the coffers of the state of&nbsp;Afghanistan to pay the Taliban's debts," Daniels wrote.
Other countries recently held about $2 billion of&nbsp;Afghan&nbsp;reserves.
Nearly 3,000 people died on&nbsp;Sept.&nbsp;11, 2001, when planes were flown into New York's World Trade Center, the Pentagon in northern Virginia, and a Pennsylvania field.
U.S. sanctions ban doing financial business with the Taliban but allow humanitarian support for the&nbsp;Afghan&nbsp;people.
The case is In re Terrorist Attacks on&nbsp;Sept.&nbsp;11, 2001,&nbsp;U.S. District Court, Southern District of New York, No. 03-md-01570.
(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy, Richard Chang and David Gregorio)

you might like

Sept. 11 victims cannot seize Afghan central bank assets -U.S. judge