The United States said Wednesday it would set up an external, professionally managed fund to manage $3.5 billion in Afghan reserves, concluding it cannot trust the Taliban leadership with the country’s money.

The new Afghan Fund, based in Geneva, will be entrusted with central central bank functions such as paying Afghanistan’s international arrears and its electricity imports, and possibly future needs such as currency printing.

The decision comes after talks between the Taliban and the United States failed to convince President Joe Biden’s administration that it should hand over frozen assets despite the urgent humanitarian needs in Afghanistan when Islamist militants returned to power 13 months ago .

In a letter to the Afghan central bank, US Deputy Treasury Secretary Wally Adeyemo expressed regret that it had failed to address US concerns, including demonstrating independence from the Taliban, enforcing commitments before the Taliban against the financing of Counter terrorism and money laundering and incorporating a reputable outside monitor.

“There is currently no institution in Afghanistan that can guarantee that these funds will only be used for the benefit of the people of Afghanistan, including DAB,” he wrote, using the acronym of the central Da Afghanistan Bank.

“Until these conditions are met, sending assets to DAB would put them at unacceptable risk and jeopardize them as a source of support to the Afghan people,” he wrote in a letter seen by AFP.

The Afghan Fund will be established in Switzerland with a board of two appointed Afghan economists who have nothing to do with the Taliban and representatives from the US and Swiss governments.

It will maintain an account with the Bank for International Settlements, owned by the world’s central banks, and will also pay for key functions such as Afghanistan’s access to the global SWIFT banking system.

The United States expects the bulk of the reserves to be preserved and “responsibly managed” until the situation changes, a senior official said.

The United States froze $7 billion in Afghan assets in New York in August 2021 as the two-decade-old Western-backed government rapidly collapsed with Biden’s withdrawal of US troops.

Biden said in February that half of the assets would be made available to victims of the September 11, 2001 attacks that sparked the US invasion of Afghanistan that toppled the Taliban, who had harbored al-Qaeda.

The decision outraged the Taliban, but the militants later entered talks with the United States on how to proceed, momentum building after Afghanistan suffered a devastating earthquake in June.

Then, in August, the United States killed al-Qaeda leader Ayman al-Zawahiri in an attack on his home in Kabul. Secretary of State Antony Blinken said the Taliban had broken promises to oppose terrorism they made during a deal with former President Donald Trump to withdraw US troops.

The new fund will not go into support. In a statement, Deputy Secretary of State Wendy Sherman said that since the Taliban takeover, the United States has contributed $814 million in humanitarian assistance, channeled through international agencies and aid groups and not given to the Taliban.

The Afghan Fund will help “reduce the suffering of the people of Afghanistan and improve economic stability while continuing to hold the Taliban accountable,” Sherman said.

A World Bank survey conducted late last year found that 70 percent of Afghans said they were unable to meet their basic needs, including food, versus 35 percent who said so just before the Taliban takeover.

A senior US official said on condition of anonymity that the government had concluded that increasing liquidity at the central bank would not improve the humanitarian situation.

The official said the United States is still open to “pragmatic engagement” with the Taliban, including at the central bank.

Another $2 billion in Afghan assets have been blocked by Britain, Germany and the United Arab Emirates. Another US official said other nations could also send Afghan reserves to the new fund.