Second Circuit blocks insurers from recovering $7 billion in frozen Afghan bank assets

Judge Menashi dissented separately, agreeing that the president’s recognition of Afghanistan as a state should stand but arguing the bank itself no longer qualifies as an agency of that state. He pointed out that the Afghan banking law the panel relied on – which says the bank’s capital belongs to the state of Afghanistan – is effectively inoperative, and that a 2017 doctoral dissertation cited by the panel simply repeated those now-defunct legal formalities without reflecting who actually controls the institution today. On the TRIA question, Menashi highlighted what he described as a perverse result: under the panel’s timing rule, if the government had waited to freeze the assets until after the Taliban formally took over the bank, the funds would be available to victims, but because the government acted quickly to block the assets as the Taliban was seizing power, the victims cannot recover. Menashi observed that the statute concerns actual ownership, not ownership frozen in time.