Our correspondent Andreas Frank reports;  If Afghanistan does not do more to combat corruption in its financial sector by June, the country risks being “blacklisted” by an inter-governmental task force — which the U.S. watchdog for Afghan reconstruction (SIGAR) said would would be “devastating” for the sector and the overall economy.

In the most dangerous country in the world for aid workers and where armed insurgents still control large swathes of territory, the reconstruction effort’s number one enemy should be corruption, John Sopko, the special inspector general for Afghanistan reconstruction, said.

Attracting and maintaining foreign investment is vital to sustaining Afghanistan’s economy as U.S. assistance funding – which has totalled over $102 billion so far – declines.

Sopko criticized U.S. government agencies for failing to produce a comprehensive anti-corruption strategy, claiming that unless corruption is specifically targeted and combated it could be the “spoiler” that “will jeopardize every gain we have made over the last 12 years.”

Corruption in Afghanistan’s financial sector presents a particular threat to the country’s ability to attract foreign investment: “Failure to sufficiently reform and regulate the banking sector is putting the country’s immediate future development at risk.”

Sopko reported that the Financial Action Task Force, an inter-governmental body that sets the standards required to combat money laundering, terrorist financing, and other threats to the integrity of the international financial system, recently downgraded Afghanistan’s status based on the country’s lack of progress implementing its much-touted anti-money laundering and terrorist financing action plan.

If Afghanistan continues to fall short on these measures, the FATF could “blacklist” the country as early as June, an outcome the SIGAR chief said would be “devastating” for the country.   Atlantic Council Remarks