Financial Crime World

Title: APG’s Scathing Report on Nepal’s Anti-Money Laundering Measures: Pressing Needs for Improvement

Subtitle

In a bid to strengthen Nepal’s financial system and tackle growing concerns about money laundering and terrorist financing, the Asia/Pacific Group on Money Laundering (APG) has released a damning evaluation report on the country’s anti-financial crime measures.

Assessing Nepal’s Shortcomings

On September 8, the APG published the Mutual Evaluation Report (MER), outlining Nepal’s crucial deficiencies in its legislative framework, regulatory oversight, and operational effectiveness against financial crimes.

Legal Framework & Regulatory Failures

The report emphasizes Nepal’s inadequate legal framework and regulatory lapses:

  • Absence of crucial provisions related to money laundering and terrorist financing
  • Lack of effective implementation of UNSC resolutions on terror financing

FIU Limitations & Data Analysis

The report revealed substantial weaknesses in Nepal’s financial intelligence unit (FIU):

  • Ineffective analysis and dissemination of STRs and CTRs
  • Insufficient coordination and information sharing

Customer Due Diligence (CDD)

The report stressed the need for enhanced CDD procedures:

  • Inadequate account opening and monitoring procedures
  • Limited information exchange between financial institutions and regulatory authorities

Fragmented Regulatory & Supervisory Framework

The report recommended reinforcing Nepal’s regulatory and supervisory framework:

  • Only commercial banks currently fall under Nepal Rastra Bank’s regulations
  • Other sectors, such as real estate and casinos, lack regulatory oversight

Nepal: Taking a High-Level Approach

The APG urges high-level commitments to address the gaps:

  1. Implementing a roadmap for improvement
  2. Timely reforms in legislative framework, regulatory oversight, and operational effectiveness

By adhering to these recommendations, Nepal can enhance its financial system’s stability and effectively counteract money laundering and terrorist financing threats.

[To access the full APG report on Nepal’s Anti-Money Laundering and Counter-Terrorist Financing Measures, click here.]

[Note: The views expressed in this article are that of the author, and Fiscal Nepal holds no responsibility for the accuracy, reliability, or timeliness of the information presented.]