U.S. frees $25.5 million in Afghanistan's assets frozen under Taliban rule

WASHINGTON (AP) -- The Bush administration authorized the release Friday of $25.5 million to cash-starved Afghanistan in assets frozen while the country was ruled by the Taliban militia.

The latest assets ordered unblocked belong to four government-owned banks, the Treasury Department said. Treasury identified the banks as: Afghan Export Promotion Bank, Bank Millie and its subsidiaries, Afghan House and Afghan Trading.

Last month, the administration released assets now valued at $218 million belonging to the Afghan Central Bank.

The Clinton administration froze the assets in 1999 under an order that blocked all assets within the United States associated with the Taliban.

In January, the United Nations lifted international sanctions on some financial institutions, which cleared the way for the Treasury Department's action.

"We are committed to helping the Afghan people during this critical period of rebuilding," said Treasury Secretary Paul O'Neill. "We are optimistic that the funds unblocked today will play an integral role in this new chapter of Afghan history."

Neither the United States nor the United Nations recognized the Taliban as the legitimate government of Afghanistan. Taliban fighters seized control of the Afghan capital, Kabul, in 1996 and were ousted late last year by U.S.-aided guerrillas from the northern Afghan alliance.

The government seated to replace the Taliban is headed by Hamid Karzai, the country's interim prime minister.

The unblocked assets of the four banks involved in Friday's action will be turned over to the interim government, the Treasury Department said.

Treasury's action does not affect financial assets linked to the Taliban that were frozen by the Bush administration after the Sept. 11 attacks on the World Trade Center and the Pentagon, officials said.

Last month, the United States, Japan and the European Union promised to provide about $1.3 billion over three years to help rebuild Afghanistan. That contribution accounted for half the total $2.6 billion pledged by various countries attending an international conference.

The money will help Afghanistan pay the bills of its interim government, clear some of the millions of mines and other unexploded ordnance in the countryside and pay for other state building measures.

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