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Entities May Be Demanded for Support in Conducting Inquiry

Kathmandu, Nepal - In a bid to crack down on money laundering and terrorist financing, the government has given itself the authority to demand support from various entities and public corporate bodies while conducting inquiries and investigations under the Anti-Money Laundering and Combating Financing of Terrorism Act.

Support Demanded from Entities

According to Section 15 of the Act, the Department may demand support from any entity or public corporate body in the course of conducting an inquiry and investigation into a suspected offense. The provision also states that it shall be the duty of such entities and bodies to provide support to the Department at the time of demand.

  • The government has empowered itself to seek support from Nepal Police under Section 16, stating that it shall be the duty of the concerned police officer or police staff to provide support to the Department if demanded.
  • Additionally, Section 17 allows the Department to consult with specialists belonging to an entity and involve them in the investigation and inquiry process, even if they are not required by prevailing laws. The entities are obligated to provide such specialists to the Department at the time of demand.

Filing of Cases

The Act also provides for the filing of cases against individuals deemed to have committed offenses under its provisions.

  • According to Section 22, the Department shall write to the concerned government attorney to decide whether a case should be filed or not.
  • If the government attorney decides to file a case, the Department shall file it with the court prescribed by the Government of Nepal by publishing notice in the Nepal Gazette, as per Sub-Section (2) of Section 22.

No Limitation on Filing Cases

Notably, there is no limitation period for filing cases related to offenses under this Act, as stated in Section 23.

Government as Plaintiff

The Government of Nepal shall be the plaintiff in all cases relating to offenses under this Act, as per Section 24.

Suing Under Prevailing Laws

Section 25 allows a case to be filed under other prevailing laws if an offense under this Act is also punishable under any other law. In such cases, the entity or officer conducting the investigation and inquiry shall inform the Department of the same.

Confidentiality

Investigation officers, staff, and persons involved in investigations are prohibited from violating confidentiality of matters or submitted documents that come to their notice during the course of investigation and inquiry, unless required by prevailing laws, as stated in Section 26.

Automatic Suspension

Any official or staff of a bank, financial institution, non-financial institution, or civil servant shall be deemed to be in automatic suspension for a period they are under custody as per this Act or until their case is decided if a case has been filed against them, as per Section 27.

Assets Deemed to Have Been Gained through Laundering

In cases where assets of an individual suspected of money laundering are found to be unnatural in comparison to their income source or financial condition, they shall be required to prove the source of earnings. If they fail to do so, they shall be deemed to have earned such assets by committing offenses under this Act, as per Section 28.

Offense Not Required to Be Proven

Notwithstanding prevailing laws, it shall not be necessary to prove that an offense has occurred in order to penalize the offense under Section 3. Similarly, a person who has committed an offense under Section 3 shall not be deemed to have been barred from being penalized simply because no case was filed or the case was dismissed, as per Section 29.

Punishment

The punishment for offenses under this Act is outlined in Chapter 7 of the Act.

  • According to Section 30, anyone committing an offense under Section 3 shall be punished with a fine equal to the amount involved in the offense or imprisonment from one year to four years, or both.
  • In addition, Section 31 provides for fines ranging from five hundred thousand rupees to banks and financial institutions, and twenty-five thousand rupees to individuals.