Thursday, June 6, 2013

Government approves anti-money laundering legislations

The country is finally out of the risk of being blacklisted by Financial Action Task Force (FATF) as it has fulfilled its international commitments, albeit three years late.
The cabinet today approved second amendment of Assets Laundry Prevention Act and Proceeds of Crime Bill — the key concern of the FATF in fighting dirty money flow — as ordinances and has sent it to the President Dr Rambaran Yadav for his final seal of approval. The president also endorsed the two ordinances late in the evening to save the country from being blacklisted.
"Nepal is out of the danger zone of being blacklisted by global anti-money laundering watchdog," deputy governor of central bank Maha Prasad Adhikari said.
FATF — the global standard setter for anti-money laundering and countering the financing of terrorism — had asked Nepal to amend Assets Laundry Prevention Act (ALPA) according to the international standard and bring Proceeds of the Crime Bill that will help in the management of seized property and give enough teeth to authorities to fight organised crime.
However, the country will still be under continuous observation for a couple of plenary before International Co-operation Review Group (ICRG) — a body under FATF that analyses high-risk jurisdictions and recommends specific actions against them — reports to the FATF plenary.
"The ICRG will now review the recently approved Conventions and amended and new Act, and report them to the FATF plenary," Adhikari said, adding that the FATF plenary will then decide to send Nepal out of regular observation of ICRG. "After about two plenaries, Nepal will be completely out of the regular observation too."
Meanwhile, the government is sending a team led by law and justice secretary Bhesh Raj Sharma to FATF Plenary and Working Group meeting that will be held on June 16. the team will report the country's latest developments and compliance.
Earlier, Nepal had escaped the blacklisting in February and remained under continuous observation as it had on at the last minute approved the Organised Crime Bill, the last of the three Bills — Mutual Legal Assistance Bill, Extradition Bill and Organised Crime Bill — under the country's international commitments since 2009.
The FATF plenary had then kept Nepal under a status quo – improving global AML/CFT compliance ongoing process which is the grey zone – under the ICRG recommendation.
The successive meetings of Asia-Pacific Group (APG) — of which Nepal is a member — and plenaries of FATF — an inter-governmental anti-money laundering watchdog consisting of 36 member-jurisdictions and a number of observers — has been showing basic concerns on Nepal's slow response to UN security council resolutions like terrorist financing, seizing, freezing and confiscation of organised crime assets.
The country was already placed under the high-risk and non-cooperative jurisdictions — which means almost blacklisted — in October 2012 for AML/CFT deficiencies and no substantial progress on FATF's 40+9 recommendations that can also help combat corruption. Once blacklisted, the country will have difficulties to trade internationally, getting foreign aid and in traveling abroad as they will be rigorously checked.


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