Afghan United Bank CEO Stresses his Humanitarian Activities

S E C R E T SECTION 01 OF 02 KABUL 000455 NOFORN SIPDIS C O R R E C T E D C O P Y (ADDED CAPTION) E.O.: 12598; DECL: 02/06/2020 TAGS: EFIN KTFN PTER KCOR AF SUBJECT: Afghan United Bank CEO Stresses his Humanitarian Activities KABUL 00000455 001.3 OF 002 Classified by CDDEA Ambassador E. Anthony Wayne for reasons 1.4 (b) and (d). ¶1. (C) Summary: In a February 4 meeting, Haji Mohammed Jan, CEO of Afghan United Bank (AUB) and Naqebullah, Chairman of Afghan United Petroleum, discussed with Ambassador Wayne and Treasury Attache AUB's plans for expansion. Their primary interest, however, was to describe their support for development projects in Kandahar and deflected attempts to engage on their bank's (shady) activities. Ambassador Wayne emphasized the importance of vigilance in the area of combating money laundering and terrorist financing. End Summary. AFGHAN BANKING SECTOR AND ACCESS TO CREDIT -------------- ¶2. (C) Haji Mohammed Jan, Chairman of Afghan United Bank (AUB) and Naqebullah, Chairman of Afghan United Petroleum, visited the Mission on February 4 after requesting a meeting to discuss AUB operations. One of Afghanistan's 17 licensed banks and licensed by the Central Bank in October 2007, AUB currently has nine branches and plans to establish 21 additional branches by the end of 2010. (Note: In recent conversations, bank executives have given the number as between 15 and 21 End Note) AUB's website states that it has paid-in capital of $14 million and correspondent banking relationships with Commerzbank in Frankfurt and Habib American Bank in New York. (NOTE: Bank officials, in previous conversations, noted ongoing efforts to secure correspondent banking relationships with Bank of America and Citi. End Note.) ¶3. (C) Mohammed Jan explained that AUB lent $85 million to commercial enterprises in the last year and was planning to provide additional loans for housing and agriculture. He said he was also applying for a license to set up an insurance company, in response to lender demands for this service (the company would be just the second Afghan-owned insurance provider). Mohammed Jan also discussed his involvement in the Aino Mina development in Kandahar, reportedly a high-end residential real estate project of which he controls approximately 7.5% of the total 10,000 hectares. Jan stated that the houses under construction are "so nice that you would not believe you were in Afghanistan." His goal is to make the developments an 'example' for Kandahar, he stated. ¶4. (C) When Ambassador Wayne pressed Jan to describe the origins of his bank -- particularly how he was able to generate sufficient capital so soon after the fall of the Taliban in 2001 -- Jan deflected the question. Instead, he stated that finding funds was not difficult due to his reputation as a trustworthy business partner dating back to the first business he started at age eighteen, which involved trade and currency exchange. "Reputation is the key currency of business in Afghanistan," he stated. ¶5. (C) Responding to Ambassador Wayne's comment on the importance of improving access to credit, Mohammed Jan reported that more and more Afghans are getting involved in the formal financial sector, particularly after Da Afghanistan Bank put a 15% ceiling on the bank lending rate in Afghanistan in 2009. Jan noted that Afghans' confidence in the banking sector had been very low following the fall of the Taliban in 2001, due mainly to bank lootings and failures during multiple periods of political instability. Since then, the people's trust in the banking sector has improved significantly, despite Afghanistan's prior banking challenges, he commented, citing as an example the pride many Afghans have in showing off their bank cards. (NOTE: He specifically cited Kabul Bank as an example. End Note.) Jan also expressed confidence that mobile banking will generate even further interest in the formal banking sector. Ambassador Wayne reminded the bankers of the importance of maintaining vigilance in combating money laundering and terrorist financing as the banking sector continues to expand in this high risk jurisdiction. MOHAMMED JAN PORTRAYS HIMSELF AS A HUMANITARIAN -------------- --- ¶6. (C) Deflecting further probes by Ambassador Wayne into AUB activities, Mohammed Jan sought to portray himself as "the business leader of the South," spending most of the rest of the meeting describing the development projects he supports in Kandahar. Jan expressed particular interest in investing in education in the region, describing a group of business partners from Southern Afghanistan he is organizing to fund the creation of a university in Kandahar. Jan attributed his sympathy to educational needs in the south, to disruption of his education as a child. Ambassador Wayne observed that Minister of Education Wardak has also emphasized the need for higher levels of investment in education in Afghanistan, particularly in the south. Jan went on to describe multiple projects that he and his business partners are planning to fund in Kandahar, including fruit harvesting facilities, a bottled water-processing plant, and several projects to improve Kandahar's export infrastructure. Jan's other development projects in Kandahar include employing several master rug makers from Peshawar to teach the craft to widows and orphans in Kandahar City and sending 60 high-school graduates to management training. Jan cited ongoing electricity KABUL 00000455 002.3 OF 002 shortages as one of the biggest challenges in developing the province, prompting Ambassador Wayne to describe that the Mission is focused on addressing this problem. ¶7. (C) Mohammed Jan also mentioned that he was grooming his son, Haji Bashir, to be a power broker in the Afghan business and financial community, commenting that Bashir already has significant responsibilities at AUB for his age (he is 23 years old). Asked whether AUB was still trying to establish a correspondent banking relationship with U.S. banks, Jan said he did not pay attention to such 'technical details' and instead left them for his son. (Comment: Jan's answer rings false because as the bank's CEO he would certainly be involved in a high-level decision such as this. End Comment) BIO DATA -------------- ¶8. (S/NF) Background: Several intelligence reports on Chairman Mohammad Jan generally paint a picture of a successful businessmen who seeks to move Afghan United Bank (and affiliated companies) into more legitimate businesses and away from narcotics and a reliance on its hawala business. Born in around 1970 and a member of the Tolkhi tribe, Jan reportedly started working with New Ansari hawala as a teenager and now controls the daily operations of both AUB and the larger New Ansari network, of which AUB and New Ansari Hawala are parts. Jan is said to hold a 50% share of New Ansari, but only 18% share of AUB. Jan reportedly claims close relationships with President Karzai, Afghan National Army Chief of Staff Bismullah Khan and Defense Minister Abdul Rahim Wardak. COMMENT -------------- ¶9. (C) A recent raid by Afghan law enforcement officers of New Ansari in Kabul has likely given Mohammed Jan, Naqebullah and other associates cause for concern. We judge their request for a meeting with Ambassador Wayne to be an escalation by New Ansari associates who aim to persuade senior USG officials that they are "good citizens," champions of humanitarian causes and that their bank is a legitimate enterprise. While Jan may be advancing legitimate development projects, it does not absolve Afghan United Bank, New Ansari, or other related companies from the illicit finance concerns (and other criminal concerns) under review by the Afghan Threat Finance Cell (ATFC) and their Afghan counterparts. Going forward, the Treasury Attache Office, in coordination with other USG agencies, will engage Afghan United Bank executives (namely Haji Bashir) and request more specific information about the bank's operations, customers, connections, and future plans. EIKENBERRY