* U.S. adds Taliban commander to narcotics "Kingpin" list
* Designation freezes any assets he may hold in the U.S.
* Fears of deepening Taliban involvement in drug trade
* Move might complicate dialogue with insurgents
By Matthew Green
ISLAMABAD, Nov 15 (Reuters) - The U.S. government added a top Taliban commander to its list of suspected drug trafficking "Kingpins" on Thursday in the first such designation of a leader of the Afghan insurgency.
The move underscores concerns that Taliban commanders may be playing a growing role in heroin production, seeing the trade as a lucrative revenue stream to fund their campaign after most foreign troops have left Afghanistan by the end of 2014.
The U.S. Treasury said it had put Mullah Naim Barich on the Kingpin list, which bans U.S. citizens from doing business with him and freezes any assets he may hold in the United States, for trafficking drugs from the southern Helmand province - the centre of Afghanistan's heroin industry.
"Today's action exposes the direct involvement of senior Taliban leadership in the production, manufacturing, and trafficking of narcotics in Afghanistan," Under Secretary for Terrorism and Financial Intelligence David S. Cohen said in a statement.
Barich is the Taliban's "shadow governor" of Helmand, a term used by insurgents in their campaign to establish parallel administrations in territory they control.
The Kingpin designation puts the Taliban fighter on a par with notorious drug lords from Mexico, Venezuela and Colombia.
Although the listing is unlikely, by itself, to derail Barich's activities, it may signal a growing belief in parts of the administration that the U.S. should take a more robust approach to Afghanistan's nexus of traffickers and insurgents.
For years, Western officials have debated the extent to which the Taliban has profited from the drug trade primarily by taxing the harvesting and shipment of opium, the crop used to make heroin, or by dabbling in running the industry directly.
The U.S. Treasury said Barich was deeply involved in the heroin trade and had issued a decree ordering his followers to launch attacks to disrupt a plan announced by Helmand's provincial government in January to eradicate poppy crops.
"Barich is involved in many levels of the heroin and opium drug trade, including leading meetings with drug traffickers, controlling opium production, and owning his own drug loads," the Treasury said.
Afghan officials fear the departure of most foreign troops could trigger an increase in heroin production in a country where drug cartels have long established links with members of the government and security forces.
"As soon as foreign forces leave Afghanistan, there will be a surge in drug cultivation," said Al-Haj Wali Alizai, the head of the counter-narcotics commission in the Afghan parliament.
"It's not only the Taliban who are connected with drug trafficking. Everybody is involved," he said.
Barich's Kingpin designation may inject a new variable into attempts by the Obama administration to kindle a dialogue with the Taliban since it might raise legal questions over any attempt to include him in any future negotiations.
"Mullah Barich is a very senior person in the current Taliban leadership," said Gretchen Peters, author of Seeds of Terror, a book on the Taliban and the drug trade.
"This raises a new level of complexity for officials in the Obama administration and State Department who are seeking to reconcile with the Taliban," she said.