Has govt endorsed money laundering of cooperative fraud ?

While cases related to cooperative fraud and money laundering are still under judicial and investigative review, a recent controversial decision by the government has pushed Nepal into deeper risk under international anti-money laundering scrutiny.
Analysts warn that Nepal, already on the Financial Action Task Force (FATF) ‘grey list,’ could now be heading toward the far more damaging ‘black list.’
Nepal is currently classified by FATF as a ‘jurisdiction under increased monitoring,’ which means ‘grey list’. However, concerns intensified after the Office of the Attorney General (OAG) decided to amend charge sheets in cases involving Rastriya Swatantra Party (RSP) chair Rabi Lamichhane, his business partner and fugitive GB Rai, altogether 153 accused of cooperative fraud and money laundering. The move has raised fears that international confidence in Nepal’s commitment to fighting illicit finance is eroding.
The present civilian government, led by former Chief Justice Sushila Karki and formed in the aftermath of the Gen-Z protests of September 8 and 9 protests – that claimed the lives of 76 young demonstrators demanding good governance – now finds itself engulfed in a serious moral and legal crisis, largely due to decisions taken by its chief legal advisor.
Those protests were driven by calls for transparency, accountability, and the rule of law. Yet critics argue that the very government formed out of that movement has undermined its spirit. Attorney General Sabita Bhandari, appointed by the Karki administration, has issued a series of controversial decisions that many say strike at the core of judicial integrity.
And one of them is damaging to the country also. Most recently, on Thursday and Friday, Bhandari ordered amendments to charge sheets in money laundering and organised crime cases filed against Rabi Lamichhane, GB Rai – chair of Gorkha Media – and more than hundred others implicated in a major cooperative fraud scandal.
The decision is against the Section 36 of the Criminal Procedure Code, according to legal experts, who say that the OAG has misinterpreted it to alter cases that are already under judicial consideration.
Initially, the Attorney General sought to revise charges only against Rabi Lamichhane. However, citing legal complications in treating defendants differently within the same charge sheet, she ultimately removed organized crime and money laundering charges against all 153 accused linked to five cooperatives associated with Lamichhane. This decision also benefited fugitive suspect GB Rai, who according to Rabi Lamichhane also was the mastermind behind the fraud of billions.
AG Bhandari amended all accused charges as amending charges for only one accused in a case involving multiple defendants could have led to rejection by the court. As a result, even serious allegations against absconding suspects were diluted.
Critics further allege that Friday’s decision effectively legitimizes over Rs 5 billion allegedly siphoned from cooperatives and transferred abroad through shell companies, land transactions, and cryptocurrency. “This move has made it easier for those involved to sanitize illicit funds,” one former secretary said.
“Dropping serious charges against a politically exposed person under FATF’s highest-risk category is an act that places both citizens and the state itself in danger."
FATF classifies Politically Exposed Persons (PEPs), along with their family members and close associates, as high-risk under global Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) standards. Under FATF Recommendations 12 and 22, financial and designated non-financial institutions are required to apply enhanced due diligence and continuous monitoring to such individuals.
FATF also follows the principle of ‘once a PEP, always a PEP,’ meaning that heightened scrutiny does not automatically end when a person leaves office. “Given this framework, it is hard to believe that such a decision was taken without the knowledge or consent of the Prime Minister,” he noted.
Under Nepal’s own laws, organised crime and money laundering cases are not meant to be withdrawn in this manner. Beyond domestic legality, observers warn that the decision has put Nepal’s international financial credibility at stake.
After the controversial decision by AG Bhandari, victims of cooperative fraud have already taken to the streets, accusing the state of failing to recover their savings and protect their rights.
Nepal was previously placed on the FATF grey list due to weak enforcement, delayed investigations, and political interference. Analysts say leniency shown by past governments toward illicit financial networks worsened the situation and that the current administration’s actions have only amplified the risk.
Nepal is under pressure to fully implement its FATF action plan by January 2027. However, delays in completing a national risk assessment, poor coordination among investigative bodies, and a soft approach toward high-profile cases suggest the country may struggle to meet its commitments.
FATF has repeatedly urged Nepal to strengthen oversight of banks, cooperatives, casinos, precious metal and real-estate transactions, curb informal money transfer systems such as hundi – illegal transfer of money – enhance investigative and prosecutorial capacity, and ensure effective confiscation of illicit assets. Full compliance with targeted financial sanctions related to terrorism and weapons of mass destruction has also been emphasised.
Although the government claims to be working closely with FATF and the Asia-Pacific Group (APG) to address these weaknesses, analysts say recent decisions have made Nepal appear increasingly vulnerable in the global fight against money laundering.
As cooperative fraud and money laundering now directly affect Nepal’s international credibility, economic and foreign investment climate, experts warn that continued inaction – and politically motivated decisions – could push the country onto the FATF blacklist.
Observers also question the silence of political parties and civil society as the government appears to undermine the very ideals born out of the Gen-Z movement and the sacrifice of 76 young lives.
Despite having laws and institutions in place to combat illicit finance and terrorist funding, Nepal has produced limited tangible results in investigations, prosecutions, and asset seizures. Critics attribute this not only to institutional weakness but also to long-standing collusion between political leadership and notorious financial middlemen under previous administrations.
Analysts warn that Nepal’s situation deteriorated sharply in the immediate past after the then Prime Minister KP Sharma Oli government withdrew cases against members of the controversial ‘Thurman Gun gang’ and individuals including Deepak Bhatt from the Department of Money Laundering Investigation (DMLI) and Nepal Rastra Bank (NRB). They claim the risk has increased even further under the current government due to its controversial decisions, raising fears that Nepal could slide into the FATF ‘dark grey list’ or even the ‘black list.'
Although Nepal has established rules, laws, and institutional mechanisms to combat money laundering and terrorist financing, it has failed to produce tangible results in practice. As a result, progress in investigations, prosecutions, and asset seizures remains limited. Critics argue that this is not due to government inefficiency alone, but also because of alleged collusion between past governments and notorious networks and intermediaries like the so-called Thurmal Gun gang, during the tenure of former Prime Minister KP Sharma Oli and his Finance Minister Bishnu Paudel.
At present, however, analysts say Nepal has been pushed into even greater risk due to what they describe as the Karki government’s inexplicable leniency toward Rabi Lamichhane, a politically influential figure (PEPs) listed under FATF’s high-risk category.
Similar flawed decisions and delays in enforcing the law under previous governments led to Nepal being placed back on the FATF ‘grey list.'
Observers now find it troubling that a country already weakened by alleged close ties between political leaders and intermediaries accused of laundering illicit money may be moving toward the FATF ‘black list’ under Prime Minister Karki and her controversial Attorney General Bhandari.
This is because money laundering in Nepal is not limited to brokers and intermediaries alone; it is also widespread among politically connected figures like Rabi Lamichhane involved in the cooperative sector. Many cooperatives are allegedly operated by politicians and their family members, where public funds are misappropriated while enjoying protection from political parties and law-enforcement agencies. Rabi Lamichhane, critics argue, is only an example of a much broader problem.
For these reasons, the Lamichhane case is no longer just a domestic legal matter, it has become a test of Nepal’s commitment to global financial integrity. Failure to correct course, experts warn, could see Nepal slide from the grey list into the far more damaging FATF blacklist.

(Originally published at Nepalkhabar: https://en.nepalkhabar.com/news/detail/16925/)

कालो धन कारोबारलाई प्रधानमन्त्री कार्कीको स्वीकृति ? नेपाल कालोसूचीमा पर्ने जोखिम

सहकारी ठगी र सम्पत्ति शुद्धीकरणका मुद्दा अझै अदालत र अनुसन्धान प्रक्रियामै रहेका बेला सरकारको हालैको एक विवादास्पद निर्णयले कालोधन ओसारपसारसम्बन्धी अन्तर्राष्ट्रिय निगरानी सूचीमा रहेको नेपालका लागि झन् गम्भीर जोखिम उत्पन्न गरेको छ। विशेषगरी फाइनान्सियल एक्सन टास्क फोर्स (एफएटीएफ) को ‘ग्रे लिस्ट’ (खैरो सूची)मा रहेको नेपाल अब ‘ब्ल्याक लिस्ट’ (कालोसूची)तर्फ उन्मुख हुन सक्ने आशंका बढेको छ।
नेपाल हाल एफएटीएफको ‘खैरो सूची’ अर्थात् औपचारिक रूपमा बढी निगरानीमा रहेका क्षेत्राधिकारको सूचीमा छ।
तर महान्यायाधिवक्ता कार्यालयले राष्ट्रिय स्वतन्त्र पार्टीका सभापति रवि लामिछाने, उनका साझेदार तथा हाल फरार जीबी राईसहित १५३ जनाविरुद्ध दायर सहकारी ठगी तथा सम्पत्ति शुद्धीकरणसम्बन्धी मुद्दामा अभियोगपत्र परिमार्जन गर्ने निर्णय गरेपछि अन्तर्राष्ट्रिय तहमा नेपालप्रतिको विश्वास कमजोर हुन सक्ने चिन्ता व्यक्त गरिएको हो।
सुशासनका लागि गत भदौ २३ र २४ गते जेनजीले गरेको प्रदर्शनका क्रममा मारिएका युवाहरूको रगतको जगमा बनेको पूर्वप्रधानन्यायाधीश सुशीला कार्की नेतृत्वको सरकार यतिबेला आफ्नै कानुनी सल्लाहकारका कारण गम्भीर नैतिक र कानुनी संकटमा फसेको हो। सुशासन, पारदर्शिता र कानुनी राज्यको माग गर्दै जेनजी विद्रोह भएको थियो। तर, त्यसैको जगमा सत्तामा पुगेकी कार्कीले नियुक्त गरेकी कानुनी सल्लाहकार अर्थात् महान्यायाधिवक्ता सविता भण्डारीले एकपछि अर्को विवादास्पद निर्णय गर्दै जाँदा न्यायको मर्ममाथि नै प्रहार भएको छ। 
पछिल्लो समय महान्यायाधिवक्ता भण्डारीले तीनवटा ठूला र संवेदनशील प्रकरणमा लिएका विवादास्पद निर्णयले प्रधानमन्त्री कार्कीप्रति मात्र नभएर नेपालकै न्याय प्रणालीमा शंका उत्पन्न भएको छ।
भण्डारीले बिहीबार र शुक्रबार सहकारी ठगी प्रकरणका आरोपित राष्ट्रिय स्वतन्त्र पार्टी (रास्वपा)का सभापति रवि लामिछाने र गोरखा मिडिया प्रालिका अध्यक्ष जीबी राईसहित १५३ जनाविरुद्धको सम्पत्ति शुद्धीकरण र संगठित अपराधको मुद्दाको अभियोगपत्र संशोधन गर्ने निर्णय गरिन्। मुलुकी फौजदारी कार्यविधि संहिताको दफा ३६ को ‘गलत प्रयोग’ गर्दै भण्डारीले विचाराधीन मुद्दाको अभियोगपत्र संशोधन गर्न निर्देशन दिएकी हुन्।
महान्यायाधिवक्ता भण्डारीले सुरुमा रवि लामिछानेको अभियोगपत्र सच्याउने निर्णय गरेकी थिइन्। तर एउटै अभियोगपत्रमा रहेका अन्य अभियुक्तहरूका हकमा फरक व्यवहार गर्दा कानुनी जटिलता देखिने भएपछि रविसँग जोडिएका पाँच सहकारीका सबै १५३ प्रतिवादीलाई ‘संगठित अपराध’ र ‘सम्पत्ति शुद्धीकरण’ अभियोगबाट मुक्त गर्ने विवादास्पद निर्णय गरिन्।
एउटै प्रकृतिको अपराधमा संलग्नमध्ये एक जनाको मात्रै अभियोग परिमार्जन गर्दा अदालतबाट अस्वीकार हुन सक्ने अवस्था भएकाले फरार अभियुक्त जीबी राईजस्ता व्यक्तिको हकमा समेत गम्भीर अभियोग हटाइएको हो।
यो विवादास्पद निर्णयसँगै सहकारी ठगीबाट आर्जित तथा विभिन्न कम्पनी, जग्गा कारोबार र क्रिप्टो करेन्सीमार्फत नेपालबाहिर लगिएको ५ अर्ब बढी रकम वैध बनाउने रवि लामिछाने र जीबी राईको प्रयासलाई महान्यायाधिवक्ता भण्डारीले सहज बनाइदिएकी छिन्।
'एफएटीएफले उच्च निगरानीमा राखेको राजनीतिक रूपमा प्रभावशाली व्यक्तिसँग जोडिएको मुद्दा फिर्ता गर्नु राज्यले आफ्नै नागरिक र अन्तर्राष्ट्रिय प्रतिबद्धतामाथि जोखिम निम्त्याउनु हो,' एक पूर्वसचिव भन्छन्।
एफएटीएफले सबैभन्दा बढी निगरानी गर्नुपर्ने सूचीमा पहिलो नम्बरमा राखेको राजनीतिज्ञको गम्भीर प्रकृतिको मुद्दाफिर्ताको आफैँमा नेपाल देश र नेपाली नागरिकप्रति सरकारले गरेको ठूलो अपराध भएको उनको भनाइ छ।
स्मरण रहोस्, एफएटीएफले कालोधनको ओसारपसारको जोखिमअन्तर्गत सम्पत्ति शुद्धीकरण निवारण/आतंकवादी गतिविधिमा वित्तीय सहयोग निवारण (एएमएल/सीएफटी) वर्गीकरण गर्दा राजनीतिकरूपमा प्रभावशाली व्यक्ति (पेप्स), तिनका परिवारका सदस्य तथा नजिकका सहयोगीहरूलाई घुसखोरी, भ्रष्टाचार र सम्पत्ति शुद्धीकरणमा संलग्न हुने सम्भावनाका कारण उच्च जोखिम समूहका रूपमा पहिचान गरेको छ।
एफएटीएफको सिफारिस नम्बर १२ र २२ अनुसार यस्ता व्यक्तिहरूको कारोबारमा वित्तीय तथा गैर–वित्तीय संस्थाले कडा निगरानी र जोखिम व्यवस्थापन प्रणाली लागू गर्नुपर्ने स्पष्ट व्यवस्था छ।
एफएटीएफले अपनाएको ‘एक पटक पेप्स, सधैं पेप्स’ सिद्धान्तअनुसार पदबाट बाहिरिएपछि पनि जोखिम मूल्याङ्कनका आधारमा राजनीतिक रूपमा प्रभावशाली व्यक्तिमाथि निरन्तर निगरानी आवश्यक मानिन्छ। यही सन्दर्भमा ती पूर्वसचिव भन्छन्, 'यस्ता गम्भीर अभियोग हटाउने निर्णय प्रधानमन्त्रीको जानकारी वा सहमतिबिना भएको हो भन्न गाह्रो छ।'
एफएटीएफको मार्गदर्शनअनुसार राजनीतिकरूपमा प्रभावशाली व्यक्तिको हैसियतको समय सीमित हुँदैन भन्दै उनी भन्छन्, 'जोखिम मूल्याङ्कनको आधारमा कुनै व्यक्ति पदबाट बाहिरिएपछि पनि सधैं राजनीतिकरूपमा प्रभावशाली व्यक्तिकै रूपमा व्यवहार गर्न सकिने खुला दृष्टिकोण अपनाउन एफएटीएफले सुझाव दिएको छ।'
एकातिर नेपाली कानुनअनुसार पनि संगठित अपराध र सम्पत्ति शुद्धीकरणजस्ता गम्भीर मुद्दा फिर्ता गर्न नमिल्ने अवस्था छ भने अर्कोतिर यस्तो निर्णयले नेपालको अन्तर्राष्ट्रिय आर्थिक प्रतिष्ठामै प्रश्न उठाएको छ। सहकारी ठगीका पीडितहरू राज्यले बचत फिर्ता गराउन प्रभावकारी भूमिका नखेलेको भन्दै सडक आन्दोलन र न्यायिक पहलमा उत्रिएका छन्।
यसअघि पनि कानुन कार्यान्वयनमा कमजोरी, अनुसन्धानमा ढिलाइ र राजनीतिक हस्तक्षेपका कारण नेपाल एफएटीएफको ‘खैरो सूची’मा परेको थियो। विश्लेषकहरूका अनुसार अघिल्ला सरकारका विवादास्पद निर्णय र कालोधनसँग जोडिएका गिरोहप्रति देखिएको उदारताले स्थिति बिग्रिएको थियो। र, वर्तमान सरकारको विवादास्पद निर्णयले जोखिम झन् बढाएको छ।
नेपाल ‘खैरो सूची’बाट बाहिर निस्कन सन् २०२७ जनवरीसम्म कार्ययोजना कार्यान्वयन गर्नुपर्ने दबाबमा छ। तर एकीकृत राष्ट्रिय जोखिम मूल्याङ्कन प्रतिवेदन समयमै तयार नहुनु, अनुसन्धान निकायबीच समन्वयको कमी र ठूला मुद्दामा देखिएको नरम व्यवहारले लक्ष्य हासिल गर्न कठिन हुने संकेत देखिएको छ।
एफएटीएफले बैंक, सहकारी, क्यासिनो, बहुमूल्य धातु तथा घरजग्गा कारोबारजस्ता जोखिम पहिचान, उच्च जोखिम क्षेत्रमा कडा निगरानी, हुण्डी नियन्त्रण, अनुसन्धान र अभियोजन क्षमता सुदृढीकरण तथा अवैध सम्पत्ति जफत प्रक्रिया प्रभावकारी बनाउन स्पष्ट सुझाव दिएको छ। साथै आतंकवाद र आम विनाशकारी अस्त्रमा हुने वित्तीय लगानी रोक्न लक्षित प्रतिबन्धको पूर्ण पालना गर्न आग्रह गरेको छ।
नेपाल सरकारले एफएटीएफ र एसिया–प्यासिफिक ग्रुप (एपीजी)सँग मिलेर कमजोरी सुधार्ने प्रतिबद्धता जनाउँदै आए पनि पछिल्ला विवादास्पद निर्णयले नेपाललाई कालोधन ओसारपसारविरुद्धको अन्तर्राष्ट्रिय लडाइँमा अझै कमजोर देखाएको विश्लेषकहरूको ठम्याइ छ।
सहकारी ठगी र सम्पत्ति शुद्धीकरण अब केवल आन्तरिक कानुनी विषय मात्र नभई नेपालको अन्तर्राष्ट्रिय विश्वसनीयता, आर्थिक प्रतिष्ठा र वैदेशिक लगानीसँग प्रत्यक्ष जोडिएको मुद्दा पनि भएका कारण यस्ता निर्णयमा सुधार नआए, नेपाल कालोसूचीमा धकेलिन सक्ने चेतावनी पनि विज्ञहरूले दिएका छन्।
यसरी भदौ २३ र २४ को जेन जी आन्दोलको मर्म, कलिला शहिदको सपना तथा कानुनी राज्यको धज्जी उडाउँदै प्रधानमन्त्री कार्की सरकारले नेपाललाई अन्तर्राष्ट्रियस्तरमा कालोसूचीमा धकेल्ने विवादास्पद निर्णय गर्दा राजनीतिक दलहरू तथा नागरिक समाजको मौनता रहस्यमय छ।
नेपालले कालो धनको ओसार पसार र आतंकवादी लगानीविरुद्ध नियम, कानुन र संयन्त्र बनाए पनि व्यवहारमा ठोस परिणाम देखाउन नसकेका कारण अनुसन्धान, अभियोजन र सम्पत्ति जफतजस्ता उपलब्धि न्यून छन्। यसको कारण सरकारको असक्षमता मात्र नभई अघिल्ला सरकारका प्रधानमन्त्री केपी शर्मा ओली तथा उनका अर्थमन्त्री विष्णु पौडेलको थर्मन गन ग्याङजस्ता बदनाम गिरोह र ‘बिचौलिया’हरूसँग विगतका सरकारहरूको साँठगाँठ रहेको आरोप छ। तर, एफएटीएफको उच्च जोखिम सुचीमा रहेको प्रभावशाली राजनीतिक ब्यक्ति रवि लामिछानेप्रति कार्की सरकारको रहस्यमय प्रेमका कारण नेपाल थप जोखिममा परेको छ।
अघिल्लो सरकारका यस्तै गलत निर्णय तथा कानुन कार्यान्वयनमा ढिलाइका कारण नेपाललाई एफएटीएफले ‘ग्रे लिस्ट’मा पुनः राखेको थियो। ओली तथा पौडेलको बेडरुमसम्म कालोधनका ओसारपसारका आरोपित थर्मन गन ग्याङजस्ता विचौलिया तथा आरोपीसँग सम्बन्ध भएका कारण खैरो सूचीमा परेको नेपाल वर्तमान प्रधानमन्त्री कार्की तथा उनका विवादित महान्यायाधिवक्ता भण्डारीका कारण कालोसूची उन्मुख हुनु दुखद छ।
ओली सरकारले सम्पत्ति शुद्धीकरण अनुसन्धान विभाग तथा नेपाल राष्ट्र बैंकमा रहेका थर्मन गन ग्याङ र दीपक भट्टसहितका व्यक्तिविरुद्ध ती गिरोहका मुद्दा फिर्ता लिँएका कारण तत्कालनि अवस्थामा नेपालको अवस्था झन् बिग्रिएको थियो भने वर्तमान सरकारको विवादास्पद निर्णयले झन् जोखिम बढेर नेपाल ‘डार्क–ग्रे लिस्ट’ वा ‘ब्ल्याक लिस्ट’मा पर्ने जोखिम बढेको चेतावनी विश्लेषकहरूले दिएका छन्।
किनकि नेपालमा कालो धन ओसार पसार केवल बिचौलियामाझ मात्र नभई सहकारी क्षेत्रमा संलग्न राजनीतिक नेताहरूमाझ पनि व्यापक रहेको छ। धेरै सहकारी राजनीतिक नेता र उनीहरूको परिवारले चलाइरहेका छन्, जहाँ जनताको पैसा ठगी हुँदासमेत दल र कानुन कार्यान्वयन निकायको संरक्षण पाइरहेको आरोप छ। रवि लामिछाने त एउटा उदाहरण मात्र हुन्।
त्यसैले रवि लामिछानेको सहकारी ठगी र सम्पत्ति शुद्धीकरण मुद्दा केवल नेपालको घरेलु कानुनी मामला मात्र होइन अन्तर्राष्ट्रिय मान्यता, आर्थिक प्रतिष्ठा र विदेशी लगानीका लागि चुनौतीको विषय पनि हो।

(Originally published at NepalKhabar: https://nepalkhabar.com/opinion/263026-2026-1-18-22-23-52)

Rural Municipal chair threatens chief administrative officer for refusing to pay for government rally

 Chair of Shailung Rural Municipality threatened chief administrative officer as the later refused to pay fare for the bus that was hired to ferry people to take part in the government rally organised last week by the Oli-led faction of the ruling Nepal Communist Party (NCP) in Kathmandu.

Shailung Rural Municipality chair Bharat Dulal abused and threatened chief administrative officer Raju Prasad Shah after Shah refused to pay the fare of the bus used to ferry people from Dolakha to Kathmandu. Chair Dulal threatened Shah to leave the rural municipality, if he will not follow the order. Lately both the factions – Dahal-Nepal and Oli faction of ruling NCP (NCP) are competing in gathering huge mass to show their strength. They have been bringing the people from nearby districts to flex their muscle on the Kathmandu streets as the locals are not attracted towards the pro-and anti-government protests.

After he got threatened Shah filed a complaint at District Administration Office at the Dolakha district. Shah complained that chair Dulal misbehaved with him after he refused to pay bus fare that was not used for the official purpose. Most of the local governments have been misusing the funds supposed to be spend on the development activities, on their petty political interests. The tax-payers money have been lately misused in the political interest raising the question in the annual report of Office of Auditor General (OAG). The political rallies have become costly as both the factions have been ferrying people from outside the Valley in buses, and daily wage, and also lodgeing and fooding. Lack of transparency and accountability towards the people is leading towards financial indiscipline, which will also encourage the informal economy. 

On February 5, PM Oli-led faction of the NCP (NCP) had staged a mass gathering in Kathmandu bringing peoples from all over the country promising them of free two-way fare, lodgeing, fooding and also Pashupati tour. The bus had carried peoples from Dolakha district to Kathmandu for the mass gathering organised in Durbarmarg on February 5. Musing the government coffer, the Oli-faction had organised a mass gathering at DurbarMarg in Kathmandu on February 5, and yet organising another mass gathering in Butwal tomorrow.

MCA-Nepal appeals for timely ratification of MCC Compact

The Millennium Challenge Account -Nepal (MCA-Nepal) has appealed for timely ratification of the Millennium Challenge Corporation (MCC) Compact by the Federal Parliament, as opposition has been growing from the ruling party members against the MCC.
Organising a press conference to brief media today, MCA-Nepal has also clarified that a condition of ratification of the agreement for the grant of $500 million from the MCC Compact by the Nepali Parliament is a 'standard norm' used by the MCC to ensure that projects implemented under their support do not face any problems later due to other laws. In addition to the US grant, the government will chip in $130 million for implementation of the Compact.
“The Compact has outlined six Conditions Precedent (CPs) to be achieved as necessary prerequisites before the ‘Entry Into Force’ (EiF), set for June 30,” executive director of MCA-Nepal Khadga Bahadur Bisht said, adding that out of the six, four – Designating Electricity Transmission Project as a national pride project, signing of the project implementation agreement, drafting of Electricity Regulatory Commission Act and forming the commission, agreement between Nepal and India for cross-border transmission line (Butwal-Gorakhpur) – have already been met.
The EiF by June 30 is considered to be very important for Nepal because if the programme enters into force, all projects must be completed within five years. MCA-Nepal – an agency formed by the government to implement and manage programmes financed by the MCC – says that all compact-related works that are incomplete at the end of the five-year timeline will not be funded by MCC or unutilised funds will return to the US.
“The MCC needs to be ratified by the Parliament before the access to site – the two major remaining conditions – that will be required to ensure Nepal can access the funds allocated to implement the programme on time,” Bisht said, adding that the MCC- Nepal programme has identified projects under two headings – high-voltage transmission lines and road maintenance – which need to be completed by June 29, 2025.
The project will construct 312-km-long 400 kVA high-voltage transmission lines and three high capacity substations, including building 856 transmission line towers across the alignment, according to the MCA-Nepal. The transmission line will pass through 30 municipalities of 10 districts. The locations for three substations are in Ratmate, Damauli and New Butwal.
Likewise, the programme will build different road projects with a total length of 100 kilometres.
The projects will be implemented through the use of cutting-edge technology from United States.
The Road Maintenance Project aims to enhance current practices in the maintenance of Nepal’s strategic roads network and will provide technical assistance to the Department of Roads (DoR) and Roads Board Nepal. Maintenance interventions will include pavement improvement techniques and safety enhancement features. New pavement improvement technology adopted is Full Depth Recycling (FDR) and Superpave asphalt concrete which follows the principle of recycling existing pavement material.
Organising a press conference to brief media today, Bisht said that MCA-Nepal is in the final stage of preparatory works required for the implementation of its projects that aim to increase the availability and reliability of electricity, maintain road quality and facilitate power trade between Nepal and the region to help encourage investments. But, Bisht further said, the Parliamentarians or anyone has the right to raise questions regarding the project without trying to obstruct the project on any condition as it is not good for its timely implementation. “We will like to assure that MCA-Nepal is ready to hold necessary discussions regarding the project implementation with all the concerned stakeholders,” he said, adding that the condition is in line with the standard format of the MCC compacts. “Seventeen other countries, where compact is implemented also ratify the agreement.”
As the government is preparing to table the agreement for ratification in the ongoing session of Parliament, some ruling Nepal Communist Party (NCP) leaders have started criticising the MCC Compact, particularly the condition of the ratification, and also the provision that Nepal cannot audit the project. Bisht, however, said that there is not any clause in the agreement that bars auditing of the projects under this compact by the Office of Auditor General (OAG).
Speaking on the occasion, alternative board member of MCA-Nepal Gyanendra Lal Pradhan said that the Federal Parliament should ratify the project and pave the way to take forward the project as soon as possible. “According to the understanding of Vienna Convention, any development partner has the right to ‘change in law’ protection for any future uncertainty,” her said, adding, “If any political party’s leader obstructs the project implementation, we should stand against them.”

Harvard Alumni demand immediate release of Dr Roop Jyoti

Harvard University alumni today asked the government to immediately release Dr Roop Jyoti and his family members from imprisonment.
Dr Jyoti was arrested from Tribhuwan International Airport (TIA) upon his return from Singapore on November 7. “Independent press reports suggest that Dr Roop Jyoti was charged for a crime he was not involved in," reads a press note released by Nepali students and alumni members of Harvard University. "A multi-year and multi-party business dispute that should and could have been settled via a mediation or arbitration process appears to have been blown out of proportion into a criminal offence - targeting Dr Roop Jyoti and resulting in his arrest," the press note reads, adding that they are troubled by media reports, which suggest that Dr Jyoti is being harassed because he refused to succumb to extortion.
“We demand that the authorities investigate this charge,” reads the press note signed by more than two dozen Nepal students from Harvard University and alumni members.
Expressing their hopes that the rule of law will prevail, the alumni members, said, "While we expect the rule of law to prevail and to take its course, the circumstances and the manner in which Dr Jyoti and his family are being treated appear to be arbitrary, disproportionate and unfair.”
The alumni members also strongly urged the government to free Dr Jyoti and his family members. “As not doing so would send an adverse signal that the authorities in Nepal can arrest anyone under any pretext, thereby ruining the person’s reputation, damaging the worth of their societal contributions, and casting a chill in the way that civil society and the private sector operate with rights and privileges granted by the Constitution of Nepal," the press note further reads.
Renowned businessman, philanthropist and Vipassana meditation teacher, Dr Roop Jyoti, who completed his PHD from the prestigious Harvard University in 1999, is currently under police custody due to a case filed by Bigendra Krishna Malla against him.
However, Malla yesterday took his case back saying that he does not want to move to Court. The Police might release Dr Jyoti tomorrow. But the surprise arrest of Dr Jyoti – under the charge of fraud that is not criminal offence – has raised eyebrows of all quarters. The unlikely fast move of Nepal's police and the ‘suspected involvement’ of government in the case has also sent a negative message to the investors, domestic and foreign. The 'treatment' to the eight-decade old Jyoti Group has also terrorised the private sector. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chambers of Commerce (NCC), Nada Automobiles Association of Nepal, Nepal-China Chambers, National Business Initiative (NBI) and various business institutions have also issued the press note protesting against the government move to defame a reputed business group and Dr Roop Jyoti.
The private sector also held a rally protesting the arrest of Dr Roop Jyoti and his daughter today.
Meanwhile, Bigendra Krishna Malla – who had petitioned a case of fraud against former state minister and renowned industrialist Dr Roop Jyoti – has filed an application requesting withdrawal of case in the Office of the Attorney General (OAG) today in Kathmandu, informed assistant district attorney Num Raj Khanal. The decision of OAG to not move the Court – as also suspected to be out of the court settlement – will help police to free Dr Jyoti.
According to the First Information Report (FIR) filed by Malla alleging Dr Jyoti for defrauding Rs 12 million, the police had arrested Dr Jyoti and his daughter Suruchi Jyoti last Thursday. The Kathmandu District Court had already extended remand on the father-daughter duo two times, for further investigation. The eight-day remand is to end today, while the petitioner filed for withdrawal of the case yesterday. The police has, however, already submitted the investigation report to the Office of Attorney General (OAG), while the case is in process.

Some 149 local governments miss budget presentation deadline

At least 149 local governments missed the deadline – fixed by the Local Government Operation Act – to present their annual budget for the next fiscal year.
According to Section 71 of the law, local governments must table the annual budget at the municipal assemblies by Asar 10 (June 25 this year) after endorsing the estimation of annual income and expenditure from the municipal executive, according to the the Ministry of Federal Affairs and General Administration (MoFAGA).
Out of the total 753 local governments, some 565 presented their annual budget at their respective municipal assemblies yesterday, whereas the status of 39 local bodies still remains unknown.
The ministry has have received budget updates from 714 local units within office hours today. “The record shows that some 565 local governments have presented their budget yesterday –abiding by the law – whereas some 149 have not yet,” the ministry spokesman Jaya Narayan Acharya said, adding that the ministry had issued a circular to all local governments to unveil their budget by Asad 10 (June 25 this year) and endorse it within the deadline. “The local government law has made it mandatory to endorse annual budget of local governments from the municipal assembly by end of Asar (July 16).”
But the expenditures made by the local units without having endorsing such expenditures from the respective municipal assemblies are shown under unsettled accounts, according to the Office of the Auditor General (OAG). Local governments must spend their budget only after annual planning and budget allocation, and if they breach the process, the expenditures will be shown under unsettled arrears, according to OAG.
Some rural municipalities like Balan-Bihul Rural Municipality in Saptari district presented the budget for the current fiscal year in December 2018, which was endorsed by assembly only on April 13 this year, due to differences over allocation of budget among different wards. The rural municipality failed to present the budget for the next fiscal year 2019-20 as well.
According to the Intergovernmental Fiscal Arrangement Act, the local government must present their budget by Asad 10 (June 25 this year), but the law is being violated in a number of local governments since elected representatives assumed office after the 2017 local elections. Although the federal government had warned of cutting the grants to the local governments for failing to present the budget on time, it has not taken such step yet.
Delay in presenting the budget in time will hit the development projects at the local level, as the responsibility of the development of the local level has been on the local governments, under the federal structure. 

Government spent Rs 222.83b in last one month of fiscal 2017-18

The government’s habit of spending hefty sum on the last month of the fiscal year continued in he last fiscal year too. In the last month of the fiscal year 2017-18, the government agencies spent Rs 222.83 billion.
According to the report of the Office of the Auditor General (OAG) published today, the government agencies spent 20.55 per cent of the total budget of Rs 1.27 trillion for the fiscal year 2017-18. "The government agencies sped up their expenditure in the last week of 2017-18, spending 10.87 per cent of the total capital budget of Rs 117.92 billion for the fiscal year."
"Lack of effective implementation of the electronic procurement system, delays in awarding contracts and low capacity of the contractors hit the spending capacity as earlier years,” according to the report, that also revealed that low utilisation of foreign assistance, lack of proper planning for construction of national pride projects and awarding contracts without conducting the necessary preparation were also some of the key problems of the government machinery.
Earlier, it was said that the late budget presentation has hit the spending, so the Constitution has clearly stated to present the budget one-and-a-half months ago by May-end. The Finance Ministry has also issued time-bound action plan to speed up the capital spending.
Likewise, the government has also been unable to settle the tax dues. "The tax dues has reached Rs 252 billion, with an additional Rs 900 million due in the first nine months of the current fiscal year," the report revealed, adding that as of fiscal year 2017-18, the government was left to collect tax of worth Rs 161 billion. The government has been unable to monitor extended tax bases and tax mobilization mechanism," it added.

Per capita debt of Nepalis surges to Rs 31,750

Per capita debt of Nepalis has increased by Rs 7,043 in the fiscal year 2017-18 to Rs 31,750.
According to the Office of Auditor General's report, the debt burden of a Nepali citizen has gone up to Rs 31,750 from Rs 24,707 in the last fiscal year. "The total debt of the government was Rs 915.31 billion till 2017-18, an increase from Rs 217.62 billion."
Of the total debt, the internal debt and the external debt of the government stands at Rs 391.16 billion and Rs 524.15 billion, respectively. However the increasing debt in not as bad as it is claimed to be due to  low spending capacity and return on the debt that could have created employment and helped capital formation.

Arrears of government agencies rise by 36.7 per cent

Though, all arrears donot mean all the public money misused, the government arrears has increased by 36.7 per cent or by over Rs 183 billion in the last fiscal year 2017-18.
According to the 56th annual report of Office of the Auditor General (OAG) – handed over to President Bidhya Devi Bhandari by Auditor General Tankamani Sharma today – the unsettled amount of government agencies including federal government, provincial government offices, local government offices, district coordination committees and other organisations touched Rs 683 billion – till the last fiscal year 2017-18 – which is more than half of the budget for the current fiscal year. "Such arrears stood at Rs 500 billion till 2016-17," the report reveals.
This year, the OAG did auditing of 6,644 offices in the three tiers of the governments. "The total unsettled amount among federal government agencies stood at Rs 106 billion, which is 5.29 per cent of the audited amount of the federal government agencies," according to the report that reveals that arrears among provincial government agencies stood at Rs 190 million, which is 7.25 per cent of the total audited amount of provincial government agencies. "The OAG had carried auditing of government agencies in 747 local units out of 753 units, and local government agencies arrears stood at Rs 24 billion, which is 4.22 per cent of the total audited amount among local government agencies."
The arrears of different district coordination committees (DDCs) and other committees stood at Rs 10 billion.
Though, the Financial Procedures Act clearly directs to settle arrears within 35 days of getting official reminder but some of the government officials never take it seriously. Every year, the OAG produces the report and submits it to the the President within the nine months of the next fiscal year. The President sends the report to the Parliament for discussion and clear the arrears. The annual report is widely discussed in the Parliamentary Accounts Committee (PAC) and some of the amount is also settled. But the PAC also fails to settle all the arrears, which is increasing with every passing year. 

Sugar import higher than market demand

Nepal imported more than three folds sugar last fiscal year compared to a year before exceeding the actual demand of the domestic market.
According to the 56th annual report of Office of the Auditor General (OAG), the country imported a total of 274,000 metric tonnes of sugar in the last fiscal year 2017-18, against import of 71,000 metric tonnes in the fiscal year 2016-17.
The import of sugar surged also due to falling price in the international market. The government had also banned the sugar import following pressure from the sugar mill owners finally to be tricked by them, according to the Prime Minister. Finance Ministry had also increased import duty from 15 per cent to 30 per cent on December 11, 2017. However, the decision was implemented only on April 17, 2018.
The government lost Rs 536 million revenue due to delay in implementation of the decision,” reads the report. While the sugar import increased significantly, sugar produced within the country remained stored in warehouses, according to the mill owners. Consequently, sugar mill operators are yet to clear their dues to the sugarcane farmers, while the market was flooded by cheap imported sugar. But the mill owners raised the price of the sugar – immediately after the import ban – hitting the consumer hard.

PM dirests to increase development spending

Prime Minister Khadga Prasad Sharma Oli has directed government secretaries to spend 80 per cent of the budget in next two-and-a-half months.
Addressing an interaction with the secretaries at his Office in Singh Durbar, on 'Progress and challenges on the current budget' today, Oli directed them to anyhow spend 80 per cent of the development budget within next two months. The fiscal year is only two-and-a-half month remaining but the government has been able to spend only 19.69 per cent or Rs 40.50 billion till April 28. The eroding spending capacity of the government has taken toll on development projects, though the ministries have been asking for more budget for the next fiscal year.
The premier also asked the secretaries reason why the spending has been only 18 per cent by the mid-April, by the end of nine months of the current fiscal year.
Though the secretaries said that last year's earthquake, economic blockade and obstruction in project implementation process delayed the developmental projects and expenditure, they have not been in position to accelerate the development works in the last months of the fiscal year.
Going by the trend of the spending in the last fiscal years too, the successive governments have been spending most of the budget at the last trimester, also due to procedural dilemma and bureaucratic hassles.
The fiscal year is ending in next 75 days but the government still has Rs 168 billion development budget remaining, which means the government has to spend around an average of Rs 2.24 billion per day. However, haphazard spending at the end of fiscal year is dangerous as the quality of the development works could be compromised and no one will be accountable to the money that is people's tax.
The Office of the Auditor General has reported that some 328.52 billion arrears till the last fiscal year 2014-15, which means the misuse of public money is increasing and the government is not being accountable to the people and public spending. A tendency to allocate budget to politically motivated projects in the last quarter of the fiscal year to accelerate spending is also a serious concern for the auditor general.
On one hand the government is tightening the screw to mobilise revenue and on the other, it has been unable to spend, which means the government treasury is bulging, stashing the money unproductively in the central bank's vault. Due to failure to spend, the government treasury is stashed with Rs 170 billion – which is the highest over last four-five years – according to central bank.
During the meeting, most of the secretaries said that their ministries could spend capital budget in the range of 60 per cent to 70 per cent, according to a secretary present at the meeting. “The Finance Ministry has projected the capital expenditure of 75 per cent in the current fiscal year,” he said, adding that most of the secretaries were of the view that most of the spending takes places in the last four months and payment of expenditure made in first and second four months also take place at the same time, hence expenditure figure will grow.
Mid-Term budgetary review of the current fiscal year had mentioned that over the last seven years, the trend has it that over 70 per cent of actual capital expenditure takes place in the last four months. “This trend is likely to continue this year too.”
"The prime minister took stock of the progress made so far on capital expenditure and directed all the concerned ministries to speed up works and utilise the capital budget in an effective manner within the remaining two-and-half months of this fiscal year,” said spokesperson of the Office of Prime Minister and Council of Ministers Binod Bahadur Kunwar.
Many secretaries assured the prime minister that use of 80 per cent to 85 per cent of capital expenditure was still possible, if the works move ahead as planned.
However, former chief secretary Leela Mani Paudyal said that it’s almost impossible to achieve 80 per cent capital expenditure within the next two-and-half months. He argued that the expenditure ratio could however dramatically increase, if the government disbursed the private housing subsidy to those whose residences collapsed or were damaged by last year’s quake.
The government has plans to provide Rs 200,000 as private housing subsidy to each family. But it has not given even the first of four installments of this support to the victims.
"Expressing concern about low capital expenditure so far, the prime minister instructed the secretaries to speed up road, bridge and electricity project works,” said energy secretary Suman Prasad Sharma, who claimed that his ministry will spend up to 80 per cent of the capital budget. But Energy Ministry has so far spent only 28 per cent of the capital budget
Likewise, Ministry of Agriculture has so far spent just 30 per cent capital budget. But agriculture secretary Uttam Kumar Bhattarai claimed that the ministry has targeted to spend 80 per cent capital budget by the end of fiscal year.

Unsettled accounts related to ex-Maoist combatant cannot be settled: Secretary

Secretary at the Ministry of Peace and Reconstruction said that the arrears and unsettled accounts related to ex-Maoist combatant could not be cleared.

Speaking at a meeting of the Unsettled Accounts Clearance Committee meeting here today, the secretary Dhan Bahadur Tamang said that the unsettled accounts of the ex-Maoist combatant and resettlement would be difficult to settle.

The government had allocated a total of Rs 20 billion for the resettlement and rehabilitation of ex-UCPN Maoist combatant but the part itself has been involved in the financial indiscipline, according to the ex-Maoist combatant. The case has also been filed at the anti-graft watch dog, but it has not moved forward.

Finance secretary, who is also the coordinator of the committee, asked the secretaries not to increase any more unsettled accounts, and settle the old ones. The Office of the Auditor General has been asking the government to hold the respective ministers and secretaries responsible for the increasing unsettled accounts.

"Though the commitment to settle the accounts is a welcome step, it has to be settled through practical ways," he said adding that the committee has directed all the ministries to at least reduce unsettled accounts to half, if not settle completely.

"Though the unsettled accounts of the current fiscal year dropped to 13.5 per cent, the accumulated unsettled accounts have to be settled soon," said energy minister and a member of settlement committee Umakanta Jha, on the occasion.

Likewise, another committee member and agriculture minister Tek Bahadur Gharti urged to continue the momentum of the current pace of settlement.

The secretaries, on the occasion, sought help of the committee to settle the unsettled accounts as some of the accounts could not be settled by a single ministry. "The departments under the ministries are responsible to increase unsettled accounts," they said, briefing progress of their respective ministries.

Though, unsettled accounts always may not mean financial indiscipline, the settlement of accounts is important according to law and also to be accountable to the general people, who are the paid tax from their hard earned money.

According to the latest report, the government has settled almost half to Rs 20.93 billion, out of the total Rs 45.19 billion unsettled accounts. The settlement is some 46.33 per cent.

The government had formed a three-member committee to solve the problems of unsettled accounts led by finance minister. The secretary at the Office of Prime Minister Krishna Hari Baskota is the member secretary of the committee.

Baskota, on the occasion, advised to form a committee under every ministry to settle the unsettled accounts.

One sixth of the total budget is out of audit

The country does not have records of around one sixth of the total budget of last fiscal year, according to the Office of the Auditor General.

"The government has no records of some Rs 72 billion technical assistance (TA) of the last fiscal year," said spokesperson of the Office of the Auditor General Baburam Gautam.

The budget for the last fiscal year stood at Rs 404.82 billion. "But Rs 72 billion TA has not been reported in the auditor general's report, he said, adding that lack of monitoring of such huge amount will encourage financial indiscipline, and accountability of the foreign aid.

The National Planning Commission (NPC) has fixed 20 per cent maximum for the consultancy service in the total aid, a joint secretary of the NPC Gopi Nath Mainali.

Though the NPC has asked not to increase consultancy service fee to more than 20 per cent of the aid, it needs strict monitoring and auditing. "It has to be brought under the public scrutiny and audited, he said, adding that accountability and transparency will help boost the effectiveness of the foreign aid.

Recently the NPC has also asked to use local consultants to stop flow back of of the aid money in the name of consultant or technical assistance.

"The audit of total technical assistance by the supreme audit agency in the country will help trace financial flow, transparency and accountability.