Financial Action
Task Force (FATF) continued to keep Nepal under Grey List or jurisdiction to watch.
The
FATF plenary that
ended today in French capital Paris has decided not to remove from International
Cooperation Review Group (ICRG) monitoring for the time being as the country
has not yet passed the Acts to check the flow of dirty money, according to
deputy governor of the central bank Maha Prasad Adhikari.
The
three-day plenary – that started on February 12 – sought all ordinances be enacted
as permanent law, Adhikari said in email from Paris.
Nepal
has earlier in the October meeting escaped from being blacklisted at the last
moment by bringing the ordinance. However, the status quo since the last
October meeting continued due to lack of parliament that could pass the
ordinances and stamp them as permanent law.
The
second Constituent Assembly (CA) election in November has elected the
Legislature-Parliament that has just started to enter into regular business. The
parliament needs to enact the five ordinances as permanent law in 60 days of the
starting of the parliament.
Nepal
had earlier committed to the international community to bring anti-money
laundering acts by 2010 to check the flow of dirty money. However, prolonged
political transition has delayed the process and in October the government had
brought the ordinance to narrowly escape the black listing.
The
Legislature-Parliament has to approve ordinances – Mutual Legal Assistance, Procedures of Crime, Extradition
Treaty and Anti-money Laundering Act (second amendment) and made them a permanent
law.
The
ordinances have been tabled in the parliament a week ago.
According
to the law, they have to be endorsed to make them Act within 60 days.
A team from
the FATF – a global anti-money laundering body – had recently visited Nepal to study
country's progress in anti-money laundering measures and status of the
ordinances.
The Paris
FATF Plenary discussed on the report and the next meeting in June will decide
the fate of Nepal.
"However, Nepal's recently
elected Parliament will need to consider the ordinances and ratify them as
permanent parliamentary statues," the FATF said, encouraging Nepal to
urgently enact the ordinances as Parliamentary statutes within the statutory
time frame. "Until then, FATF will continue to monitor Nepal."
"Nepal has made significant
progress to improve its AML/CFT regime by adequately criminalising money
laundering and terrorist financing, establishing and implementing adequate
procedures to identify and freeze terrorist assets, implementing adequate
procedures for the confiscation of funds related to money laundering, enacting
and implementing appropriate mutual legal assistance legislation, ensuring a
fully operational and effectively functioning Financial Intelligence Unit (FIU)
and establishing adequate suspicious transaction reporting obligations for
money laundering and terrorist financing," the FATF statement read, adding
that it was able to confirm all of the technical requirements are in place and
Nepal's strong commitment to implementing the reforms.
If
blacklisted a country can not be able to get foreign aid, international trade
as the banks and financial institutions will not be able to open letter of
credit for importer and the countrymen will have to pass through the red
channels while travelling abroad.
Currently,
North Korea and Iran are in the black list – with counter measure –of the FATF
that sets standards and promotes effective implementation of legal, regulatory
and operational measures for combating money laundering, terrorist financing
and other related threats to the integrity of the
international financial system.
According
to the FATF statement, some 19 countries are in grey list, whereas two are in
dark grey, nine in black list and two countries are in blacklist with counter
measures.
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