Thursday, August 3, 2017

Finance Ministry forms AML Cell

The Finance Ministry has formed an ‘Anti-Money Laundering Cell’ to facilitate the government initiatives to curb money laundering activities.
The cell – that will to monitor the progress made by various bodies in combating financial crime, such as money laundering and terror financing, in a bid to prevent the country from falling back into the watch-list of the Financial Action Task Force (FATF) – has been under the leadership of Economic Policy Analysis Division of the Finance Ministry, will help various regulatory bodies, like the Nepal Rastra Bank, the Insurance Board, the Securities Board of Nepal, and Institute of Chartered Accountants of Nepal, and state agencies, like the Immigration Department and the Customs Department, to conduct self-evaluation of their performance in combating financial crime.
It will also study the government’s initiatives on anti-money laundering programmes and recommend necessary corrective measures, according to the ministry. "The representatives of Anti-Money Laundering Department and Nepal Rastra Bank will be the members of the cell."
The government has also formed 16 sub-committees under the main committee, which will study the laws related to anti-money laundering, capacity enhancement of related organizations. Based on outcomes of self assessments, various legal and policy reforms would be made, and capacity of institutions conducting research and analysis into money laundering and terrorist financing would be enhanced. Based on these assessments, various measures would be recommended to control money laundering and terror financing in the country. The committee has also been assigned to formulate a national strategy on anti-money laundering and against financing of terrorist activities.
These initiatives are being taken to prevent the country from being enrolled in the watch-list of the FATF, an international body that creates standards to fight global financial crime. A country’s entry into FATF’s watch-list will tarnish its image and make it difficult for Nepali financial institutions to collaborate with international financial institutions, raises various financial transaction costs, and deters foreign investment and aid from entering the country.
The FATF had included Nepal in its watch-list in 2010 citing Nepal had not made adequate legal reforms and strengthened institutions to tackle financial crime according to Nepal's commitment with the international body. The FATF removed Nepal from its watch-list in June 2014 after the parliament passed Money Laundering Prevention Act, Proceeds of Crime (Confiscating, Seizing and Freezing) Act, Mutual Legal Assistance Act, Organised Crime Control Act and Extradition Act.
The FATF will now review Nepal’s performance in controlling financial crime in fiscal year 2019-20. The assessment will continue till 2020-21. During the assessment, the FATF will oversee compliance of its 40 recommendations, which constitute the international standards for anti-money laundering and combating financing of terrorism.
The newly formed cell, which comprises representatives of the Finance Ministry, the Department of Money Laundering Investigation and the Nepal Rastra Bank, will remain in place until the FATF’s assessment is over.
"We hope that it will help to reform the national system on anti-money laundering," Subedi said, adding that the cell will also finalise the agenda for the annual meeting of Asia Pacific Group on Money Laundering that is going to be held next year in Nepal.
Nepal will host the annual meeting of the Asia Pacific Group (APG) on Money Laundering, an autonomous regional inter-governmental anti-money laundering body in 2018. This is the first time Nepal is hosting the meeting. The APG’s annual meeting generally discusses ways to tackle new threats that can foster financial crime. The meeting also evaluates measures being taken by various countries in the Asia and the Pacific to combat financial crime, and recommends measures to strengthen capacity of various institutions and give more teeth to legal framework to control money laundering and terror financing. The APG, which comprises 41 member countries and a number of international and regional observers, is the de facto Asia-Pacific chapter of the Financial Action Task Force, an international body that creates standards to fight global financial crime.

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