Financial Crime World

Nepal’s Anti-Money Laundering and Counter-Terrorist Financing Measures Under Scrutiny: APG Report

Overview

The Asia-Pacific Group on Money Laundering (APG) has evaluated Nepal’s anti-money laundering (AML) and counter-terrorist financing (CTF) measures in their Third Round Mutual Evaluation Report, released in September 2023. The report offers a comprehensive assessment of Nepal’s efforts to combat financial crimes up to December 2022.

About APG

Asia-Pacific Group on Money Laundering (APG) is a non-political, technical body formed in 2019, consisting of 42 members from the Asia- Pacific region and beyond. The primary aim of APG is to implement and enforce globally accepted standards against AML, CTF, and proliferation financing, as set by the Financial Action Task Force (FATF).

Image: Chungba Sherpa © Nepal Tourism Board.>

APG Membership and Objectives

For more information about APG, visit their website.

Key Findings and Recommendations

The report covers various aspects of Nepal’s AML/CTF measures, including ML/TF risks, preventive measures, international cooperation, and supervision. The document can be accessed here.

ML/TF Risks and Scoping of Higher-Risk Issues

  • The report highlighted Nepal’s exposure to ML/TF risks.
  • Higher-risk issues were identified, including casinos, charities, and money services businesses.

Structural Elements, National Policies, and Coordination

  • Strengths: Effective regulatory and legal frameworks, AML/CTF agency, and financial intelligence unit (FIU).
  • Recommendations: Improve coordination among different stakeholders, especially between FIUs and law enforcement agencies.
  • Advancements: Nepal has updated its legislation to address AML/CTF challenges.
  • Areas for improvement: Implementing regulations effectively and increasing operational capacity.

Financial Intelligence Units, Cash Couriers, Risk Management, and Reporting Suspicious Transactions

  • Recommendations: Enhance the functionality and independence of the FIU, address capacity constraints, and strengthen suspicious transaction reporting.

Countermeasure Measures against Terrorist Financing and Proliferation Financing

  • Nepal has made progress in countermeasure measures against terrorist financing.
  • More needs to be done to address proliferation financing threats.

Conclusion and Next Steps

While Nepal demonstrates some strengths in its AML/CTF framework, there are critical areas that require improvement based on APG’s evaluation. The country must address the recommendations in the report to enhance its ability to combat money laundering and terrorist financing effectively.

For more information on APG and its evaluations, visit their website.