US sanctions target Afghan money laundering

KABUL, Afghanistan – Stepping up its pressure on corruption in Afghanistan, the United States on Friday sanctioned a major Afghan money-exchange outfit suspected of laundering billions of dollars in drug money.

The U.S. Treasury Department sanctioned the New Ansari Money Exchange, which it says is at the center of a network of individuals, money-exchange houses and other businesses operating in Afghanistan and the United Arab Emirates.

U.S. officials and others in the international community have been pushing President Hamid Karzai to crack down on corruption in his government and in its financial and business sectors. The near collapse of the Kabul Bank, the nation's largest private financial institution, because of questionable lending practices, as well as petty bribery schemes throughout the government have hurt the Karzai administration's efforts to woo the loyalty of the public from the Taliban insurgents.

Between 2007 and 2010, the New Ansari Money Exchange used billions of dollars it transferred in and out of Afghanistan to conceal illicit narcotics proceeds, the U.S. Treasury Department said in a statement released in Washington. New Ansari transfers money to its Dubai subsidiaries — Green Leaf General Trading LLC and Al Adal Exchange — which then transfer money through U.S. and international financial systems, the statement said.

"Today's designation is another important step in our ongoing efforts to target money laundering and narcotics trafficking activity in Afghanistan," said Stuart Levey, undersecretary for terrorism and financial intelligence. "We will continue to work to expose the funding and support mechanisms for such illicit activity, and to take actions to safeguard the U.S. and Afghan financial sectors from abuse."

The issue of corruption puts the U.S in a delicate situation because it doesn't want to undermine the very Afghan government that it is trying to shore up so that foreign troops can leave the security of the nation to Afghan forces by the end of 2014.

The groups were sanctioned under the 1999 Foreign Narcotics Kingpin Designation Act. The act targets major foreign drug traffickers, their organizations and associates who act on their behalf. The law prohibits all trade and transactions between designated traffickers and U.S. companies and individuals, and freezes their assets within U.S. jurisdictions. The so-called Kingpin Act doesn't target the countries in which the designated individuals and companies operate or the countries' governments.

According to U.S. treasury officials, elements of the New Ansari network have laundered money for Azizullah Alizai and the Haji Juma Khan Organization, both identified as significant foreign narcotics traffickers by the United States in June 2007 and May 2009, respectively. Alizai is a major heroin trafficker and supplier in Southwest Asia and the Middle East while the Haji Juma Khan Organization is an international opium, morphine, and heroin trafficking organization based in the border regions of Iran, Pakistan and Afghanistan, the Treasury Department statement said.

The sanctions were issued after an investigation by U.S. Treasury Department officials, the U.S. Drug Enforcement Administration and the Afghan Threat Finance Cell, an interagency center that collects, analyzes and disseminates relevant financial intelligence on individuals and organizations involved in financing the insurgency in Afghanistan.

"The New Ansari network is yet another example of money launderers exploiting legitimate financial systems to launder their ill-gotten gains, including illicit drug proceeds, as part of their criminal enterprise," said DEA Administrator Michele Leonhart.

"Cash is the ultimate commodity for these criminal networks, and these proceeds often fuel insurgent activity and corruption, while undermining the authority of developing governments."

The sanctioned individuals include several who play key roles in the New Ansari Money Exchange, including exchange founder Abdullah Barakzai Ansari, manager Mohammad Khan, day-to-day operations manager Mohammad Jan, stakeholder and director Haji Noorullah, Afghan banker Mohammad Rafi Azimi and Mohammad Noor, the manager of New Ansari subsidiaries in Dubai.

Key cash couriers Eissa Jan Abdul Qayoum and Rahmatullah Mohammad Afzal were also sanctioned. Between December 2009 and January 2010, Afzal transferred $94 million from Afghanistan to Dubai for New Ansari, the U.S. Treasury Department said.

Also sanctioned were Ahmad Shah Hakimi and his business, Ahmad Shah Money Exchange, which was used by Hakimi to launder money for New Ansari after it was raided Afghan authorities in January 2010 in Kabul, the department said.