Nepal Faces Scrutiny as Asia-Pacific Group Launches Money Laundering Probe

Sept 10, 2023

Mutual Evaluation Report on Nepal’s Anti-Money Laundering and Counter-Terrorist Financing Measures

Nepal’s financial sector is under scrutiny after the Asia/Pacific Group on Money Laundering (APG) published a mutual evaluation report (MER) on the country’s adherence to international standards against money laundering and terrorist financing on September 8, 2023.

Launch of the Report

Director of the APG’s Secretariat announced the report’s release, stating that it was an essential step in ensuring Nepal’s financial system remained protected against financial crimes.

Concerns and Challenges

Nepal’s financial sector has long been a subject of concern due to its proximity to major drug-producing regions in South Asia and its landlocked status, which pose unique challenges to anti-money laundering efforts.

Findings of the Report

The APG report highlighted several areas for improvement:

Prevention of Terrorism Financing: Implementing effective legal frameworks to prevent the financing of terrorism.
Financial Intelligence Sharing: Improving financial intelligence sharing between law enforcement agencies.
Customer Due Diligence: Strengthening customer due diligence measures to prevent money laundering.

Government’s Response

Nepalese Ministry of Finance officials acknowledged the report’s findings and committed to addressing the deficiencies identified. swift action will be taken to improve Nepal’s anti-money laundering and counter-terrorist financing framework.

International Scrutiny

This evaluation is crucial for Nepal to maintain a transparent and credible financial system and comply with international best practices. Nepal is also looking to strengthen its relationships with the international community and attract increased foreign investment.

Review by FATF

The report and Nepal’s responses will be reviewed by the Financial Action Task Force (FATF) during its next plenary meeting in February 2024.