According to a US judge, the victims of the 9/11 attacks do not have the right to seize $30.5 billion (£20.9 billion) in assets that belong to the central bank of Afghanistan.
Compensation seekers argued that these funds could be used to pay off court judgments they had won against Afghanistan's Taliban government.
The Taliban had given al-Qaeda militants permission to operate out of Afghanistan at the time of the attacks in 2001.
2,977 people were killed in the American suicide plane attacks.
As approving access to the frozen US funds would amount to declaring that the Taliban were Afghanistan's legitimate government, Judge George Daniels claimed he was "constitutionally restrained" from doing so.
He pointed out that since the Biden administration had refused to recognize the Taliban, neither US courts nor the government had the authority to do so.
Judge Daniels stated in his 30-page ruling that while "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," they are unable to do so using money from the Afghan central bank.
He continued, "The Taliban must bear responsibility for the Taliban's liability in the 9/11 attacks, not the former Islamic Republic of Afghanistan or the Afghan people.
A US-led military coalition forced the Taliban out of power in Afghanistan in 2001, but after the withdrawal of Western forces in 2021, the Taliban regained control of the nation.
Before planes were flown into the World Trade Center in New York and the Pentagon in northern Virginia, along with a fourth jet that crashed into a field in Pennsylvania, Al-Qaeda, an Islamist extremist network, planned the 11 September attacks from Afghanistan.
The judge's decision is a setback for those who sought access to some of the $7 billion in central bank funds for Afghanistan that were frozen at the Federal Reserve Bank in New York.
Lee Wolosky, a lawyer who argued for victims' compensation, stated that this ruling denies over 10,000 members of the 9/11 community the ability to seek compensation from the Taliban. "We will appeal because we think it was decided incorrectly.
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