Judge George Daniels ruled that US federal courts do not have jurisdiction over the frozen funds and are therefore legally prohibited from seizing them, the documents showed.
The judge said in his 30-page opinion that awarding the seized assets to the families of the victims of the terrorist attacks would be unconstitutional because acting otherwise would be an act of recognizing the Taliban* as the legitimate government of Afghanistan, which the current Biden administration has not done.
When the Taliban took over Afghanistan in 2021, approximately $7bln of the Da Afghanistan Bank (DAB) were stored at the Federal Reserve Bank of New York.
In February 2022, President Joe Biden froze the funds via executive order and declared that half of the money, or $3.5bln, would be used for the benefit of the people of Afghanistan.
More than 10,000 family members of the victims of the terrorist attacks had asked the judge to put his decision on hold while they appealed, but the court documents show Daniels ruled an appeal was unlikely to succeed following Biden's February 3 decision to extend the asset freeze by one year.
Daniels said that the Taliban, and not the people of Afghanistan, should pay for its liability in the September 11 terrorist attacks.
The money in the Afghan Central Bank includes assets such as currency, bonds and gold accumulated over the past 20 years in large part through foreign exchange funds attempting to generate economic activity in the region.
*The Taliban is subjected to UN sanctions over terrorist activities.