Nepal’s Fight Against Financial Crimes: An Overview of Preventive Measures and Legislation

Nepal, a landlocked country in South Asia, has made significant strides in implementing international conventions to prevent financial crimes. One such convention is the United Nations Convention against Corruption (UNCAC), which Nepal signed on December 10, 2003, and ratified on February 23, 2011.

Since then, the Government of Nepal (GoN) has adopted the National Strategy and Action Plan (Action Plan) to effectively implement the UNCAC. The GoN has taken various measures, including legislative, administrative, and judicial actions, to tackle financial crimes recognized in the Action Plan.

Legislation: A Strong Foundation

Nepal has enacted several pieces of legislation to fight corruption and financial crimes. Some of these legal provisions are:

1. Prevention of Corruption Act, 2002

   • Criminalizes corrupt activities
   • Strict punishment for offenses
   • Regulations for reporting and receiving bribes

2. Commission for Investigation of Abuse of Authority Act, 1991

   • Establishes Commission for the Investigation of Abuse of Authority (CIAA)
   • Powers to investigate, arrest, and seize assets

3. Judicial Council Act, 2017

   • Allows the Judicial Council to investigate and prosecute judges for corruption

4. Special Court Act, 2002

   • Establishes a special court for delivering speedy and effective justice in cases related to corruption, money laundering, and economic crimes

5. Money Laundering (Prevention) Act, 2008

   • Criminalizes money laundering and terrorist financing
   • Asset freezing, seizure, and confiscation
   • Procedures for investigations and trials

6. Mutual Legal Assistance Act, 2014

   • Facilitates mutual legal assistance between Nepal and foreign states for various judicial proceedings, including those related to corruption and financial crimes

7. Bank and Financial Institution Act, 2017

   • Regulates banking and financial sector for transparency
   • Protects depositor rights
   • Maintains financial stability

8. Right to Information Act, 2007

   • Guarantees the right to information on matters of public concern
   • National Information Commission and fines for non-compliance

9. Public Procurement Act, 2007

   • Promotes transparency, competition, and objective decision-making
   • Reduces opportunities for corruption

Institutional Provisions: Strengthening Capabilities

Several key institutions and bodies have been established and engaged in activities related to corruption prevention and control in Nepal:

• Office of the Prime Minister and Council of Ministers
• Ministry of Law, Justice, and Parliamentary Affairs
• Commission for the Investigation of Abuse of Authority (CIAA)
• Department of Money Laundering Investigation (DMLI)
• Office of the Attorney General
• Office of the Auditor General
• Revenue Investigation Department
• National Vigilance Centre
• Public Procurement Monitoring Office

Each of these entities plays a vital role in preventing and controlling financial crimes in Nepal. For example, the CIAA investigates corruption cases against public officials, while the Office of the Attorney General makes the final decision to initiate proceedings on behalf of the Government.

Conclusion

Nepal has taken comprehensive measures through legislation and institutional provisions to prevent and control financial crimes, including corruption. These efforts support Nepal’s commitment to the UNCAC and reflect a concerted attempt to build a more transparent, accountable, and corruption-free society.