KABUL -  The Afghan president has signed a key package of legislation aimed at combating financial crime, a statement said on Wednesday, making it less likely the country will be added to an international blacklist this week.
The laws have been rushed through both houses of parliament in a last-ditch bid to meet the deadline set by the international watchdog, the Financial Action Task Force (FATF), after the draft was wrangled over by ministers for over a year. ‘I put my signature to it… this decree is to be published in the national gazette along with the parliament drafts,’ the statement by President Hamid Karzai said.
The government is hoping the eleventh-hour breakthrough will convince the FATF it has done enough to prove it is serious about cracking down on money laundering and terrorist financing.
If not, Afghanistan would join states including Iran and Pakistan on the watchdog’s blacklist. Its banks could be cut off from the global financial system, disrupting up to $10 billion worth of annual imports and putting all sectors of its aid-dependent economy under strain.
Many banks have already stopped dealing with Afghanistan because of weak regulation and last month most Afghan banks were dealt a fresh blow when their Chinese counterparts abruptly put a halt to dollar transactions. FATF is midway through its June 23-27 meeting and is expected to discuss Afghanistan on the last day.