DAVID GREENE, HOST:
OK, several important dates to follow in Afghanistan this month. On June 14, Afghans will vote in a runoff election to choose their next president. And about a week later is a deadline for Afghanistan to enact new laws against money laundering and terrorism financing. If the government misses the deadline, Afghanistan will be placed on a blacklist by the Financial Action Task Force, an international agency made up of the world's strongest economies. That could have devastating consequences for a fragile economy. Here's NPR's Sean Carberry.
SEAN CARBERRY, BYLINE: I'm at one of a handful of Western-style supermarkets in Kabul. And almost everything I can see here, from vegetables, to ramen noodles, to energy drinks, is imported. That means the supermarket has to send money to countries like China to pay for all the imported goods. If Afghanistan is blacklisted, foreign banks will likely sever their ties with Afghan banks. That could mean these shelves here could soon be empty.
KAHLIL SEDIQ: Afghanistan is a country which we are importing everything - everything.
CARBERRY: Khalil Sediq is head of Afghanistan's banking association. He says, the blacklisting would not only starve the people of food, fuel and medicine; it would starve the government of a vitally needed source of revenue.
SEDIQ: When these imports drops, it means their income from custom also drops.
CARBERRY: Blacklisting would also mean aid organizations and foreign companies will face difficulties transferring money into Afghanistan.
SEDIQ: This will be a disaster for this country.
CARBERRY: This potential financial crisis isn't coming out of nowhere. Afghanistan has had more than two years notice that it needs to bring its financial laws into conformity with international standards.
SEDIQ: Money laundering and financing terrorism should be considered as a crime. And the law should determine what's the punishment for that.
CARBERRY: Sediq says that's not the case under current law in a country with a rampant drug trade and that's seen a major banking scandal in recent years. The country's financial laws currently lack a number of critical oversight and enforcement mechanisms. Sediq says a ministerial committee started working on revised laws a year and a half ago.
SEDIQ: Because of many reasons - unexplained reasons - it has been two, three times rejected.
CARBERRY: After what's been described as a nontransparent process, draft legislation recently made it to parliament. The counter terrorism financing law has been passed. But the anti-money laundering legislation is missing a number of provisions required by the task force. Sayed Ikram is the first secretary of the lower house of parliament.
SAYED IKRAM: It's difficult, in to two week or three weeks, to decide about and to bring changes.
CARBERRY: He says there simply isn't enough time to amend and pass the law. So he says they'll do what they can and hope for leniency from the task force come June 22. But even that assumes both houses of parliament will pass the law, and outgoing president, Hamid Karzai, will sign it in time. The effects are already being felt. European, Turkish and Chinese banks have halted transactions with some banks here. That's forcing many people to turn to informal systems like the Shahzada money exchange market in Kabul.
HAJI HUMAYON: (Speaking foreign language).
CARBERRY: Haji Humayon is spokesman for the market. He says the cost of money transfers has gone up 80 percent, in part because of the shortage of dollars coming in from foreign banks.
AHMAD FUAD: (Through translator) It's good for our business, but harmful for the economy.
CARBERRY: Ahmad Fuad runs a business in western Afghanistan importing electronics from China.
FUAD: (Through translator) For the last week, we've had difficulty transferring money overseas. We can't deliver our cash on time to foreign suppliers, so there's a delay in importing goods.
CARBERRY: Fuad is in Kabul looking for alternatives. And if Afghanistan fails to pass the anti-money laundering law, or one without enough teeth, this is just the beginning of what could be a five-year plague on Afghanistan's banks and economy. Sean Carberry, NPR News, Kabul. Transcript provided by NPR, Copyright NPR.