Nepal to face hard times in face-to-face in APG review meeting

Nepali participants in the face-to-face meeting of regional members on the fight against dirty money next month will face a tough time convincing members about the prolonged political transition that has pushed the approval of one of the critical Bills — Bill Against Organised Crime — further, though Nepal escaped from being blacklisted in June after the President approved two Bills.

Nepal will participate in the face-to-face review meeting in the third week of January in Hong Kong, informed deputy governor of central bank Maha Prasad Adhikari.

“The country will report its progress since the last meeting in September,”Adhikari said, adding that the country has made some progress in the last three months.

“The amendment to the Anti-Money Laundering Act is underway and is expected to be completed by July,” Adhikari added. “Likewise, operational independence and automation of Financial Information Unit (FIU) is also in process, though the process to buy software has failed twice. The third round has started and it might succeed in getting the software to link Financial Information Unit  with other global members.

In September too, the face-to-face meeting of the Regional Group and Financial Action Task Force (FATF) had shown concerns regarding the approval of the Bill Against Organised Crime, operational independence of Financial Information Unit, and amendment of Anti-Money Laundering Act.

It had shown concern on the delay in the approval of the Bill Against Organised Crime — one of the key Bills among the three — which Nepal had long committed to approve.

The approval of the Bill will help the country present itself as a better investment destination that facilitates foreign direct investment.

The absence of a parliament, prolonged political bickering, and intra-party feud within UCPN-Maoist, have been making it difficult for caretaker prime minister-led government to approve the Bill Against Organised Crime, though two Bills — Mutual Legal Assistance Bill and Extradition Bill — were approved through ordinance on June 18 by the President.

Earlier, Nepal had committed to amend the Anti-Money Laundering Act before June 13, the deadline the country had submitted to the Financial Action Task Force  — an inter-governmental policymaking body whose purpose is to establish international standards and develop and promote policies, both at the national and international levels, to combat money laundering and the financing of terrorism.

Though the country had repeatedly been committing to address the Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT), it has been difficult also due to the CPN-Maoist which is opposed to the Bill.

CPN-Maoist has been criticising the Bill saying that it has incorporated more political issues than financial crime.

The operational independence of Financial Information Unit — that is under the central bank — and its membership with Egmont Group of Financial Intelligence Units, however, is not a difficult task.

The Egmont Group of Financial Intelligence Units members are connected through a software that helps them exchange information on the flow of dirty money. But Anti-Money Laundering/Counter-Financing of Terrorism is still in the process of acquiring the software that will harmonise the software of all member countries.

After the January 2013 face-to-face meeting in Hong Kong, the Financial Action Task Force plenary will meet in October 2013. The FATF's plenary is a decision making body on Anti-Money Laundering/Counter-Financing of Terrorism that meets three times a year.

Nepal is a member of APG — under FATF — that is going to hold its 16th annual meeting  in Shanghai on July 15 - 19, 2013.

FATF shows concern on Bill Against Organised Crime

The face-to-face meeting of the Regional Revenue Group and the Financial Action Task Force (FATF) has shown concerns regarding the approval of the Bill Against Organised Crime, operational independency of Financial Information Unit (FIU) and amendment of Anti-Money Laundering Act.

Though the meeting held in Sydney hailed Nepal's action plan on improving the legal and procedural environment in fighting against the flow of dirty money, it showed some concern on the delay in the approval of the Bill Against Organised Crime — one of the key Bills among the three — Nepal had long committed to approve, said deputy governor of the central bank Maha Prasad Adhikari.

Participants were interested in the process of how the Bill could be approved in the absence of a parliament and if it was on the government's priority list, he said, adding that the Nepali team led by finance secretary Krishna Hari Baskota, however, convinced them that the Bill would be approved at the earliest. Two Bills — Mutual Legal Assistance Bill and Extradition Bill — were approved through ordinance on June 18 by the President, according to the country's international commitment.

Baskota, on the occasion, briefed the meeting of the country's effort to amend the Anti-Money Laundering Act and its draft that is under consultation currently.

Nepal will have an amended Anti-Money Laundering Act before June 13, the deadline the country has submitted to the FATF — an inter-governmental policymaking body whose purpose is to establish international standards and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism — as it is already in the pipeline and also due to high-level political commitment to address the Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT).

Similarly, the operational independency of FIU and its membership with the Egmont Group of Financial Intelligence Units were also discussed in the meeting. "Though FIU is under the central bank, it is a fully independent entity," Adhikari informed the meeting that further discussed on making FIU fully automated.

The Egmont Group of Financial Intelligence Units members are connected through a software that helps them exchange information on the flow of dirty money. "But FIU is still in the process of acquiring the software from United Nations Office on Drugs and Crime (UNODC) that helps harmonise the software of all member countries," he said, adding that Nepal has also requested donors for help in acquiring the UNODC software that will help mitigate risks when upgrading to a new software. "FIU's membership of Egmont Group of Financial Intelligence Units has been delayed due to the lack of the software."

Nepal also presented its 12-point AML guideline and progress on its fight against money laundering. The next face-to-face meeting will be held in January — by when the Bill Against Organised Crime is expected to be approved — and the FATF plenary will be held in October.

Nepal, Taiwan sign pact to jointly combat money laundering

Nepal signed a memorandum of understanding (MoU) with Taiwan today to join hands in fighting against money laundering, terrorism funding and other financial crimes.

Head of the Financial Information Unit of Nepal Rastra Bank Dharma Raj Sapkota and director-general of Investigation Bureau (IB) under Ministry of Justice of Taiwan Chang Chi-ping signed the MoU on behalf of their respective institutions in Taiwan.

Under the MoU, the two countries will exchange information about suspected money laundering and other cross-border financial criminal activities, including terrorism financing.

Nepal and Taiwan both are members of the Asia Pacific Group (APG) on Money Laundering. The two countries began discussions last year on the MoU during an annual APG conference in Singapore.

As Taiwan was designated to help Nepal meet the requirements to join the Egmont Group to counter money laundering, Taiwan has sponsored a training programme for central bank officials of financial intelligence department on how to craft a legal framework for documentation of financial dealings and prevention of money laundering.

Only Egmont Group membership qualifies Nepal to exchange information -- relating to Money Laundering and Terrorism Financing -- with and among the FIUs around the world. Nepal has made preliminary application for Egmont Group membership in January 2010.

The Egmont Group of Financial Intelligence Units (FIUs) provides a forum for FIUs to improve cooperation in the fight against money laundering and the financing of terrorism and provide support for the implementation of domestic AML/CFT regimes.

The Group was founded in 1995, when a group of FIUs met at the Egmont Arenberg Palace in Brussels, and now has 116 members worldwide. The member FIUs meet regularly to find ways to cooperate, especially in the areas of information exchange, training and the sharing of expertise.

Currently known as the Egmont Group, these FIUs meet regularly to find ways to cooperate, especially in the areas of information exchange, training and the sharing of expertise.

As part of the recognised global network of FIUs, Egmont members can take advantage of the cooperation and mutual assistance fostered by the group. Meetings and workshops provide a forum for the sharing of best practices, and allow all members to participate fully in Egmont Group decision-making. Members share experiences and ideas, offer advice, and learn from the successes and mistakes of colleagues.

The Egmont Group has fostered a collegial environment over the years, a forum of goodwill where colleagues meet, become acquainted and openly and eagerly assist one another.