Nepal, finally, buys time to pass pending three bills

Due to international lobbying, Nepal escaped the blacklisting from the Financial Action Task Force (FATF) — the global anti-money laundering watchdog — but only for a short time till next plenary.
"Nepal has sought two-month extension to pass three pending bills that are key to fight money laundering," according to a source at the central bank.
Prime Minister Dr Baburam Bhattarai has lobbied with Kathmandu-based envoys of FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for one last time.
FATF meeting that concluded today in Paris has however blacklisted 15 countries. The meeting started on February 13 decided on Nepal’s fate today, the source said, adding that there was a high possibility of Nepal being either downgraded to 'high-risk zone' or black listed (the public statement) from the current risk zone but the international lobbying has saved the country.
"But Nepal has to fulfill its commitment and pass the three pending bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to FATF in fighting the flow of dirty money till the next face-to-face meeting — in two months — that will forward the proposal to the plenary that will be held in June, on Nepal's final decision. "If the country could not pass the bills, it will certainly be blacklisted in the June meeting," the source said, adding that nothing can save the country then.
Due to the UCPN-Maoist, the country has been failing to fulfill the international commitment, despite repeated pressures and time extension.
However, the UCPN-Maoist-led government has tabled the bills in the House on February 13 and was supposed to start discuss today, despite the pressure from its own lawmakers who fear it could be used against them, but the discussion could not take place.
Prime Minister Bhattarai today morning called Speaker Subash Chandra Nembang and requested him not to start discussion on the bills today, due to UCPN-Maoist internal rift. "Had the government and opposition started discussion today, we were set the obstruct the House, according to UCPN-Maoist leader CP Gajurel, who is close to vice chairman of UCPN-Maoist Mohan Baidhya. "The party is against the bills and wants the government to take it back from the House."
However, the main opposition Nepali Congress has asked the government to amend the Extradition Bill as the government has removed six key offences related to organised crime from the bill. The NC is but for the passing of the bills that are vital to check flow of dirty money and create investment friendly environment.
The government’s failure in fulfilling its international commitment in fighting flow of dirty money is going to cost the country dearly apart from the financial sector that is going to feel the heat the most, apart from the flow of foreign investment.Similarly, the donors will also include more stringent conditionalities for aid and grants once the country is blacklisted. Apart from the financial sector that will be hit hard as they cannot have any international transactions, in case of failure in approving the bills, the country will lose its international markets as the cost of exports will go up making Nepal's exports expensive.
Earlier, Nepal had committed FATF to approve these Bills coupled with other reforms by December 2011, but the country — passing through transition phase — has not been able to keep its promise.

FATF review
KATHMANDU: In February 2010, Nepal made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Nepal should continue to work on implementing its action plan to address these deficiencies, including by adequately criminalising money laundering and terrorist financing under recommendation 1 and special recommendation II; establishing and implementing adequate procedures to identify and freeze terrorist assets under special recommendation III; implementing adequate procedures for the confiscation of funds related to money laundering under recommendation 3; enacting and implementing appropriate mutual legal assistance legislation under recommendation 36; ensuring a fully operational and effectively functioning Financial Intelligence Unit under recommendation 26 and establishing adequate STR reporting obligations for money laundering and FT under recommendation 13 and special recommendation IV. The FATF encourages Nepal to address its remaining deficiencies and continue the process of implementing its action plan.