optimised :
DAT
org
entry
       'init result value
       mov R,#0

       'make x the smallest
       'optimization to ensure maximal 16 loops if no overflow
       abs x1,x
       abs y1,y
       CMP x1,y1 wc,wz
       if_nc mov y1,y
       if_nc mov y,x
       if_nc mov x,y1

       test x,#1 wz
       if_nz sub R,y
       shl y,#1
loop   test x,#1 wc
       test x,#2 wz
       if_nz_and_nc sub R,y 'if 10 sub
       if_z_and_c   add R,y 'if 01 add  
       shl y,#1 wz
       if_nz sar x,#1 wz
       if_nz cmp x,TRUE wz
       if_nz jmp #loop
       ret
    x LONG -99999 'ARG1
    y LONG -2 'ARG2
    R LONG 0 'RESULT
    x1 LONG 0
    y1 LONG 0
  TRUE LONG -1


not optimised but short :

DAT
org
entry
       mov R,#0
       test x,#1 wz
       if_nz sub R,y
       shl y,#1
loop   test x,#1 wc
       test x,#2 wz
       if_nz_and_nc sub R,y
       if_z_and_c   add R,y
       shl y,#1 wz
       if_nz shr x,#1 wz
       if_nz jmp #loop
       ret
    x LONG 12 'ARG1
    y LONG 12 'ARG2
    R LONG 0 'RESULT

C version :

#include <stdio.h>

int main(int argc, char** argv)
{
  int multiplicand = atoi(argv[1]);
  int multiplier = atoi(argv[2]);

  unsigned int A=multiplicand;
  unsigned int P=0;
  int Q=multiplier;
  if (multiplicand < multiplier)
  { // swap P,Q could be made with xor
    unsigned int temp = Q;
    Q = A;
    A = temp;
  }
  if (Q&1)
    P-=A;
  A<<=1;
  while (Q!=-1 && Q) {
     switch(Q&3) {
        case(2):
           P-=A;
           break;
        case(1):
           P+=A;
           break;
     }
    Q>>=1;
    A<<=1;
  }

  printf("%i\n", multiplicand*multiplier);
  printf("%i\n", (int)P);

}