Nepal still fears blacklisting next year from the international agency that checks the flow of dirty money.
The Asia Pacific Group (APG) of the Financial Action Task Force (FATF) will evaluate Nepal by the end of 2020 to ensure implementation of its international commitments in fight against the flow of dirty money.
The APG – by the end of 2020 – will be looking for concrete action by Nepal in implementing the 40 suggestions and 11 results that it committed in 2010. The evaluation next year will focus less on laws and more on implementation and results, which remains weak due to long political transition.
As Nepal has no records of wealth of any individual, neither Money Laundering Investigation Department nor the government can figure out wealth with any individual is legal or not. The business people have been, thus, asking the government to let them declare their wealth once, so that the government can have a record of individuals before taking any legal action, on illegal earnings.
Likewise, the Money Laundering Investigation Department – that was set up as a commitment in 2010 evaluation and also to escape the black listing then – also lacks coordination, though Financial Investigation Unit (FIU) under the central bank coordinates and shares suspicious transaction report (STR) with it.
According to the department insiders, the government has also been finding it difficult to implement the law because so many of them enjoy political protection. “The politicians and high ranking officials will not be able to show source of their wealth, if the Money Laundering Prevention Act is implemented,” they said, adding that the legislation was brought and department was created to escape the blacklisting from FATF only, not to implement it. “Implementation of the Act was never a priority for the government as the government is knee deep in corruption.”
Earlier too Nepal was put under an international monitoring list in February 2010 by the APG working committee after it found that Nepal’s attempts to control money laundering were not effective enough. Nepal – to fulfill its international commitment in fight against the flow of dirty money – and also to escape the blacklisting passed the Anti-Money Laundering legislation and established a Money Laundering Investigation Department. The department, however, has been not able to function due to pressure from the higher political leadership, who are flushed with money from ‘commission’ and ‘corruption’. The FATF has identified a politically exposed person (PEP) as a high risk person in the fight against the flow of dirty money. The PEP is an individual, who is or has been entrusted with a prominent function, many of whom hold positions that can be abused for the purpose of laundering illicit funds or other predicate offences such as corruption or bribery. Because of the risks associated with PEPs, the FATF Recommendations require the application of additional AML/CFT measures to business relationships with PEPs.
Established in 1999, FATF tracks down and stop money laundering and funding of terrorist activities around the world. Nepal – a member of FATF associate organisation APG that investigates regional member countries – had passed the Money Laundering Prevention Act in 2008 under pressure, but took 2 years to implement it. Though Nepal brought legislation to escape the black listing in 2010, it does not seem to have made much progress since then in actually preventing tax evasion and money laundering. But the APG will be investigating on its own next year, which is going to create troubles to Nepal. The APG evaluation committee – under the FATF – meets twice a year to review the progress of the member countries and jurisdictions. On June 21, next week, the APG evaluation committee will meet but Nepal’s evaluation will be done in the second meeting of 2020, which will decide the fate of the country.
FATF has, currently, blacklisted Iran and North Korea, whereas 12 countries, including Sri Lanka, Pakistan, Cambodia, Ethiopia, and Syria, are on its international monitoring list.
The Asia Pacific Group (APG) of the Financial Action Task Force (FATF) will evaluate Nepal by the end of 2020 to ensure implementation of its international commitments in fight against the flow of dirty money.
The APG – by the end of 2020 – will be looking for concrete action by Nepal in implementing the 40 suggestions and 11 results that it committed in 2010. The evaluation next year will focus less on laws and more on implementation and results, which remains weak due to long political transition.
As Nepal has no records of wealth of any individual, neither Money Laundering Investigation Department nor the government can figure out wealth with any individual is legal or not. The business people have been, thus, asking the government to let them declare their wealth once, so that the government can have a record of individuals before taking any legal action, on illegal earnings.
Likewise, the Money Laundering Investigation Department – that was set up as a commitment in 2010 evaluation and also to escape the black listing then – also lacks coordination, though Financial Investigation Unit (FIU) under the central bank coordinates and shares suspicious transaction report (STR) with it.
According to the department insiders, the government has also been finding it difficult to implement the law because so many of them enjoy political protection. “The politicians and high ranking officials will not be able to show source of their wealth, if the Money Laundering Prevention Act is implemented,” they said, adding that the legislation was brought and department was created to escape the blacklisting from FATF only, not to implement it. “Implementation of the Act was never a priority for the government as the government is knee deep in corruption.”
Earlier too Nepal was put under an international monitoring list in February 2010 by the APG working committee after it found that Nepal’s attempts to control money laundering were not effective enough. Nepal – to fulfill its international commitment in fight against the flow of dirty money – and also to escape the blacklisting passed the Anti-Money Laundering legislation and established a Money Laundering Investigation Department. The department, however, has been not able to function due to pressure from the higher political leadership, who are flushed with money from ‘commission’ and ‘corruption’. The FATF has identified a politically exposed person (PEP) as a high risk person in the fight against the flow of dirty money. The PEP is an individual, who is or has been entrusted with a prominent function, many of whom hold positions that can be abused for the purpose of laundering illicit funds or other predicate offences such as corruption or bribery. Because of the risks associated with PEPs, the FATF Recommendations require the application of additional AML/CFT measures to business relationships with PEPs.
Established in 1999, FATF tracks down and stop money laundering and funding of terrorist activities around the world. Nepal – a member of FATF associate organisation APG that investigates regional member countries – had passed the Money Laundering Prevention Act in 2008 under pressure, but took 2 years to implement it. Though Nepal brought legislation to escape the black listing in 2010, it does not seem to have made much progress since then in actually preventing tax evasion and money laundering. But the APG will be investigating on its own next year, which is going to create troubles to Nepal. The APG evaluation committee – under the FATF – meets twice a year to review the progress of the member countries and jurisdictions. On June 21, next week, the APG evaluation committee will meet but Nepal’s evaluation will be done in the second meeting of 2020, which will decide the fate of the country.
FATF has, currently, blacklisted Iran and North Korea, whereas 12 countries, including Sri Lanka, Pakistan, Cambodia, Ethiopia, and Syria, are on its international monitoring list.
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