Financial Crime World

Title: Nepal’s Central Bank Governor Addresses Annual Anti-Money Laundering Summit: Urges Stricter Compliance

Opening Remarks by Dr. Chiranjibi Nepal, Governor of Nepal Rastra Bank

In his opening address at the 4th Annual Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Summit held in Nepal on February 1, 2019, Dr. Chiranjibi Nepal, Governor of Nepal Rastra Bank, underscored the importance of increased vigilance against financial crimes.

  • Appreciation for the conference organization “It is my pleasure to address the opening ceremony of this important conference on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). I applaud the National Banking Institute and other international organizations for their efforts in organizing this event,” said Dr. Nepal.

The Threat of Money Laundering and Terrorism Financing

  • Global Concerns and Economic Impact Money laundering and terrorism financing pose significant threats to financial institutions and the entire financial system. IMF estimates that the extent of money laundering is around 2-5% of global GDP. A poor AML/CFT rating can affect the ease of doing business for financial institutions adversely.

  • Preparing for Nepal’s Next Evaluation Nepal, which secured a satisfactory rating in its last mutual evaluation in 2014, should focus on improving its AML/CFT regime for the upcoming evaluation in 2020. Consequences of a weak rating include listing as a country with significant deficiencies in AML/CFT.

Banks’ Role in AML/CFT Compliance

  • Partners in AML/CFT Efforts Banks and financial institutions (BFIs) are vital partners in deterring and detecting money laundering and terrorism financing. Compliance with relevant laws and regulations is crucial.

  • New Vulnerabilities and Responses With increasing technology usage in banking, stronger internal controls, adequate risk management, and effective policy implementation are essential in addressing new vulnerabilities.

Nepal’s Current Efforts and Progress

  • Legal and Institutional Frameworks Nepal has FATF-recommended legal and institutional frameworks in place for AML/CFT compliance.

  • Active Prevention and Detection The financial intelligence unit (FIU-Nepal) and the Nepalese police have been actively implementing preventive measures and investigating potential financial crime cases. In the 2017/18 fiscal year, they received 45,93,5817 transaction reports and 887 Suspicious Transaction Reports (STRs). Of the STRs, nearly 312 were dissembled to law enforcement agencies for further investigations and potential convictions.

Stakeholder Collaboration for a Secure Financial System

  • Crucial Role of Stakeholders Effective collaboration among stakeholders, including the government, regulatory bodies, law enforcement agencies, financial institutions, civil society, and support agencies, is essential for controlling financial crime and maintaining financial stability in the country.

  • Educating Delegates and Preparing for Upcoming Evaluation Successful implementation of robust AML compliance mechanisms is essential. Delegates attending the summit will be able to enhance their knowledge of the risks and trends in money laundering and terrorism financing, enabling them to better prepare for Nepal’s upcoming mutual evaluation.

Conclusion

The 4th Annual AML/CFT Summit in Nepal is a crucial platform where attendees will gain valuable insights to enhance their AML/CFT compliance strategies. The collective commitment of all stakeholders is crucial for the ongoing effort to address and prevent financial crimes effectively.