Nepal may escape blacklisting

Nepal might escape black listing as the Parliament is planning to pass the three key Bills that are key in fighting flow of dirty money, on Friday.
Despite UCPN-Maoist lawmakers boycott today, the government tabled three Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among Nepal's major commitments to the global anti-money laundering watchdog Financial Action Task Force (FATF) in fighting money laundering.
The FATF is meeting in its headquarters in Paris from today to take stock of member countries' and territories' progress on their commitments in joining hands globally in fighting money laundering and terrorist financing and will decide the fate of Nepal on Friday, the day Parliament has set to pass the Bills.
"We wanted the government to take a fast track route and pass the Bills today," said main opposition Nepali Congress chief whip Laxman Ghimire. “If the country is black listed, the government must take the blame, as the lawmakers of the party that is leading the government is opposing the Bills,’ fearing that they could be used against the UCPN-Maoist in future.
The three Bills under the UN Convention are very important for Nepal to pass to escape the blacklisting. Currently, Nepal is in the risk zone and it has only tow options — in absence of passing of the Bills — either to be blacklisted or downgraded to the high-risk zone costing Nepal dearly.
Nepal had sought one year extension to pass the three Bills by December 2011, after it failed to pass a year ago. Since, the country has ratified key UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June 2011, the FATF has agreed on time extension but Nepal needs to prepare Acts according to the Conventions but it has been delayed due to UCPN-Maoist intra-party rift.
In absence of passing of the three Acts, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit imports.
"The foreign grants will be completely halted and the donors will charge high interest on loan as they will switch to commercial loans instead of current soft loans, which will hit the budgetary support," according to finance secretary Krishnahari Baskota.
"Nepal will be completely isolated from the international financial sector, after the FATF black lists it, as the international community will treat it like the Iran and North Korea — both black listed by the FATF — though the FATF is only the global anti-money laundering watchdog," he said, adding that Nepl has not touched 33 of the 40 plus nine commitments of the FATF.
The Acts will help Nepal check flow of dirty money and create investment environment, though both the Bills — Mutual Legal Assistance Bill and Extradition Bill — will come into effect only after Nepal enters into a separate agreement with any country.
Similarly, to develop healthy financial system and boost international trade and attract Foreign Direct Investment (FDI), the Bill Against Organised Crime will support.