U.S. formalizes guidance allowing personal remittances to flow to Afghanistan

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A crowd gathers around a makeshift wrestling arena at the cricket field in Kabul, Afghanistan October 15, 2021. REUTERS/Jorge Silva/File Photo

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WASHINGTON, Dec 10 (Reuters) - The United States on Friday formalized guidance allowing personal remittances to flow to Afghanistan, providing protection to senders and financial institutions from U.S. sanctions on the Taliban as the country faces a deepening humanitarian crisis and economic collapse.

The Treasury Department issued a general license authorizing transactions involving the U.S.-blacklisted Taliban or Haqqani Network that are incident and necessary to the transfer of noncommercial, personal remittances to Afghanistan, including through Afghan depository institutions.

The license, which formalizes existing guidance given to financial institutions, is being implemented in an effort to ensure people can continue to send support to their families in Afghanistan, a Treasury spokesperson told Reuters.

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Remittances from family and friends abroad have become critical lifelines for numerous Afghans struggling to buy food and meet other expenses amid an economic crisis that accelerated when the Taliban seized power in August as the former Western-backed government collapsed and the last U.S. troops withdrew.

The United States and other donors cut financial assistance on which the country became dependent during two decades of war with the Islamist militants, and more than $9 billion in Afghanistan's hard currency assets were frozen.

The United Nations is warning that nearly 23 million people – about 55% of the population – are facing extreme levels of hunger, with nearly 9 million at risk of famine as winter takes hold in the impoverished landlocked country.

While the U.S. Treasury has provided "comfort letters" assuring banks that they can process humanitarian transactions, concern about U.S. sanctions continues to prevent passage of even basic supplies, including food and medicine.

"U.S. sanctions on the Taliban are not the cause of the calamities facing the Afghan economy, and these additional authorizations will not resolve the fundamental causes of the situation," the spokesperson said.

Western Union Co (WU.N) and MoneyGram International Inc (MGI.O)resumed money-transfer services to Afghanistan in September after suspending services after the Islamist militia captured Kabul at lightning speed.

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Reporting by Daphne Psaledakis and Jonathan Landay; Editing by Daniel Wallis

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