Nepal seeks two months time extension from FATF

Nepal has lobbied to get two months extension from Financial Action Task Force (FATF) to pass the pending three Bills that are key to fight money laundering.
According to a source close to the Prime Minister Dr Baburam Bhattarai, Nepal has lobbied with the FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for the last time.
The FATF meeting that has been going on in Paris from February 13 will last till February 17, when it decides on Nepal's fate either to down-grade it to high-risk zone or black list it.Despite repeated commitments and time extension, Nepal has failed to pass the three key Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to the FATF in fighting the flow of dirty money.The UCPN-Maoist led government has tabled the Bills in the House on February 13 and is planning to pass on February 17, despite the pressure from its own lawmakers as they fear it could be used against them.
Meanwhile, the government has tabled the Extradition Bill removing six key issues under ‘Not to be Considered Political Offence," blamed the main opposition Nepal Congress (NC) that has supported the Bills on Monday. "The government has tabled Extradition Bill removing six essential issues relating to organised crime for its vested interest," according to the NC parliamentary party meeting today in Singh Durbar.
"Earlier, there were 20 issues listed under the section that are not considered political offences," the NC leaders claimed, adding that the government has removed homicide, offence of making physical damage by using weapons and other risky substances, offence of using and manufacturing explosive substances intending to damage life and property, offence of arms and ammunitions, offence of using arms to be free from lawful detention and arrest and offence of illegal detention, taking hostage, kidnapping and seizure from the section.
"If these offences are considered political offences, the political parties and criminal groups will enjoy state of impunity," NC lawmaker Ramesh Lekhak said, adding that UCPN-Maoists removed the 'serious' issues with ill intention that its party workers and leaders might be dragged under the offences, if the party opted for ‘revolt’ in the future.
Since these are serious crime against humanity and serious human rights offences, they should be included under non-political criminal offences," the NC demanded.
The NC, according to parliamentary party spokesperson Nabindra Raj Joshi, has called a meeting of parties outside the government tomorrow morning to prepare common standing on the removed key six issues.
"We are serious in passing the three Bills related to money laundering at the earliest with the inclusion of these issues,” Joshi added.
The three Bills under the UN Convention that Nepal had earlier ratified 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 that will cost 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 had agreed on time extension but Nepal needs to prepare Acts according to the Conventions soon.
In absence of passing of the Bills, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit country's international trade.
Similarly, 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.
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.
The Bills 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 is key.
Meanwhile, President Dr Ram Baran Yadav today during the meeting with three senior leader of Nepal Congress, CPN-UML and UCPN-Maoist urged them not to let the country blacklisted.