Nepal Takes Major Step to Avoid Greylisting by FATF with Endorsement of Money Laundering Bill
Nepal’s lower house has endorsed a bill aimed at combating money laundering, marking a significant move to minimize the threat of being greylisted by the Financial Action Task Force (FATF).
Background on FATF and Greylisting
The FATF is an international anti-money laundering body that monitors countries’ compliance with its standards. It maintains two lists: the “High-Risk Jurisdictions subject to a Call for Action” blacklist, featuring countries like North Korea, Iran, and Myanmar; and the “jurisdiction under increased monitoring” greylist, which signals enhanced transactional risks.
Nepal’s Current Status
Nepal has been facing the threat of being greylisted due to its failure to improve in several areas pointed out by the Asia-Pacific Group on Money Laundering (APG), a regional anti-money laundering body. According to APG’s mutual evaluation report last year, Nepal only fully complied with five of 40 FATF recommendations.
The Endorsed Bill
The endorsed bill aims to address these deficiencies by revising 20 laws and strengthening the country’s anti-money laundering regime. Key amendments include:
- Giving money laundering investigation authority to the pertinent crime investigation agency
- Criminalizing terrorist acts and proliferation of weapons of mass destruction
- Requiring non-profit organizations to report suspicious transactions to the Financial Intelligence Unit
The bill also seeks to improve enforcement and prosecution of financial crimes, particularly targeting powerful individuals involved in frauds.
Government Response
“We are on our way to complete the first task required to avoid being greylisted by the FATF,” said a Nepal Rastra Bank official. “Along with legislation, enforcement of laws should also be strong and visible.”
The government has already prosecuted those responsible for recent scams and smuggling cases, but officials emphasize that more needs to be done to ensure effective implementation.
Timeline
Nepal has until October this year to show marked improvement in both legislations and law enforcement to avoid being greylisted at the FATF’s plenary meeting scheduled for February 2025.