Published: February 18, 2011

http://www.nytimes.com/2011/02/19/world/asia/19ansari.html

WASHINGTON — The Treasury Department imposed sanctions on Friday against one of the largest money exchange houses in Afghanistan, along with 15 of its executives, on charges that it used billions of dollars transferred in and out of the country to help hide proceeds from illegal drug sales.

The authorities designated the New Ansari Money Exchange a “major money-laundering vehicle,” under the Foreign Narcotics Kingpin Designation Act, saying that the exchange used its subsidiaries in Dubai to funnel drug money out of Kabul and into American and other international financial institutions. They also imposed sanctions on New Ansari’s senior managers, including some who have ties to President Hamid Karzai of Afghanistan.

With these actions, the United States has seized any assets New Ansari and its managers hold in the United States. American banks and businesses are prohibited from transactions with those named in the order.

The move is part of a delicate balancing act by the Obama administration, which aims to crack down on the corruption that reaches the highest levels of the Afghan government without derailing the counterinsurgency efforts that are dependent on Mr. Karzai’s cooperation.

It comes as Afghanistan struggles to overcome the turmoil caused by the near collapse of its largest financial institution, the Kabul Bank. The Afghan government’s failure to take steps to deal with the bank’s corruption and fraud has been a major factor in a decision by the International Monetary Fund to delay indefinitely the renewal of its credit program with Afghanistan.

The sanctions by the Treasury Department against the money exchange represent one of a handful of instances in which the United States has taken strong steps to stop corruption in Afghanistan.

The move against New Ansari comes more than a year after Washington and Mr. Karzai first clashed over the money exchange company, after two special anticorruption units, trained by the United States, conducted a secret raid on New Ansari’s headquarters in Kabul. New Ansari has largely stopped operating since the raid, the authorities said, but its executives have begun working with the Ahmad Shah Money Exchange, which was also named in the Treasury Department’s action on Friday.

The raid fueled tensions between the United States and Mr. Karzai, who accused Washington of infringing on his country’s sovereignty.

An aide to Mr. Karzai, Mohammed Zia Saleh, was arrested in July 2010, after investigators wiretapped him soliciting bribes from New Ansari, according to a Western official with knowledge of the case. After Mr. Karzai intervened, Mr. Saleh was released.

American officials involved in the investigation of New Ansari viewed Mr. Karzai’s actions as an attempt to protect his inner circle and the high-profile exchange house. Since then, however, the Obama administration has made a concerted effort to ease the tensions and work more closely with Mr. Karzai. American officials said he had been briefed about the sanctions by senior Treasury Department officials before they were announced.

A senior Drug Enforcement Administration official who is an expert on money laundering said that exchange houses dominated Afghanistan’s feeble economy. There are only 17 registered banks in the country, he said, but more than 400 registered exchange houses, known as “hawalas.”

New Ansari, run largely by businessmen from Kandahar, Mr. Karzai’s hometown, is among the largest of them.