KABUL, July 3 Afghan President Hamid Karzai
signed a law aimed at curbing the financing of terrorist groups,
a government statement said on Thursday, the second of two
measures needed to save its banks from being put on an
"After the judiciary verified that this law does not violate
our national sovereignty and human rights, he (the president)
ratified it," the statement said.
Together with the anti-money laundering law that was signed
last week, the legislation will help persuade the international
financial watchdog that the Afghan government is serious about
combating financial crimes.
Many banks have already stopped dealing with Afghanistan
because of weak regulation, making it difficult for businesses
to pay for imports or families to send money to children
In May, many Afghan banks and importers were dealt a blow
when their Chinese counterparts halted to dollar transactions.
The international watchdog, the Financial Action Task Force
(FATF), warned Afghanistan in February that its banks would be
blacklisted at its next meeting in June unless it showed a more
serious commitment to clamping down on financial crime.
Despite a last-ditch effort by the central bank and others
to push the laws through, only the money law was signed by the
deadline, but that turned out to be enough to avoid the
blacklist at least until FATF meets in October.
Although both laws have now passed, Afghanistan will still
have to prove that they are being adequately enforced to remove
the threat of the blacklist.
(Reporting by Jessica Donati; Editing by Jeremy Laurence)