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.

Government decides to accept Rs 52 billion grant assistance from US

The government has decided to accept the grant assistance of Rs 51.38 billion ($500 million) to be received from the US Millennium Challenge Corporation (MCC) for road maintenance and transmission line projects.
A cabinet meeting held at Office of the Prime Minister and Council of Ministers in Singha Durbar today has decided to accept the biggest foreign grant amount in its history, under the 'compact programme' pledged by the Millennium Challenge Corporation (MCC) of the US government.
The Millennium Challenge Corporation (MCC) is an independent US government agency working to reduce global poverty through economic development. This is the first grant that the country is receiving through MCC.
Under the compact programme, the MCC will invest up to Rs 51.38 billion ($500 million) via grant while the government will contribute an additional Rs 12.88 billion ($130 million) to raise the total fund to Rs 64.26 billion (US$ 630 million).
The cabinet approval will pave way for its voting by MCC’s board of directors and the US Congress for approval. "The final grant agreement is likely to be signed by September," according to MCC’s regional deputy vice president for Europe, Asia, the Pacific and Latin America Fatema Z Sumar, who visited Kathmandu last week to finalise the deal. Once the final deal is sealed, the government and the MCC will fix a date to roll out the projects as the MCC compact is a funding scheme that requires the recipient country to complete the projects ‘on time and on budget’.
"Once the deal is signed, the government will have to finalise all issues related to land acquisition, introduce regulatory reforms, including passage of the Electricity Regulatory Commission, and take other key steps that will be required to complete the projects in five-year period,” she said, adding that the project related to the energy sector is expected to have an impact on at least 72 per cent of the households currently connected to the grid, while maintenance works on around 300 km of road segments will benefit 205,000 households across the country. "The assistance is for a five-year compact fund that has no time overrun in the project execution once the project kicks off."
The compact proposal seeks to address these constraints by investing in an Electricity Transmission Project (ETP) and a Road Maintenance Project (RMP). ETP would transform power sector by expanding and strengthening the high voltage electricity transmission network to support new investments in generation and allow greater cross-border electricity trade. The RMP is expected to improve the road maintenance regime in Nepal and complement existing efforts to build new roads by other parties.
Around 300-km transmission line under ETP at a total cost of $400 million and 305-km road under RMP will be developed at a total cost of $52 million, according to the MCC. The grant will be utilised for maintenance of roads of a cumulative length of 305-km, which includes the Charali to Phidim, Dharan to Basantapur, Kadmaha (Lahan) to Gaighat, Hetauda to Bhimphedi, and Amiliya to Salyan Bazar sections.
Likewise, the transmission line projects include construction of total 300-km of line, from Hetauda to Butwal via Naubise and Damauli, and construction of three substations, one each at Naubise, Damauli and Butwal. The transmission line component also includes cross-border transmission line of Butwal-Gorakhpur, which aims at facilitating energy exchange with India.
The signing of the MCC compact funding coincides with the celebration of 70 years of US-Nepal friendship. Nepal is the only recipient of the MCC compact assistance in South Asia.
Following Nepal’s strong performance on the MCC policy indicators like economic freedom, rule of law, and control of corruption, Nepal was selected as the eligible country to develop the compact in December 2014.
The Office of the Millennium Challenge Nepal (OMCN) – a government office which coordinates development of the MCC programme – has finalised the projects in coordination with MCC that are going to be implemented under the MCC grant.
The MCC had selected Nepal for a smaller threshold programme in December of 2011. The MCC and the government of Nepal had analysed constraints to economic growth and jointly prepared a policy improvement programme based on the results. Given Nepal’s strong performance in its MCC policy indicator scorecard through 2014, MCC’s board of directors selected Nepal as being eligible to develop a compact, a larger grant-based investment.

Construction of international airport in Pokhara starts, finally

Construction work of Pokhara Regional International Airport formally started from today, some 15 months after the foundation stone for the regional airport was laid.
The then Prime Minister KP Sharma Oli had laid the foundation stone for the national pride project on April 13, 2016. Similarly, CPN (Maoist Centre) supremo Pushpa Kamal Dahal, CPN-UML senior leader Jhalanath Khanal, then deputy prime minister duo Kamal Thapa and Bijay Kumar Gachhadhar, former foreign minister Ananda Prasad Pokharel and Nepali Congress General Secretary Shashanka Koirala had also laid stones at the construction site.
Albeit the construction was started on July 11, 2017, tourism minister Jitendra Dev today formally inaugurated the construction of the airport.
Dev, on the occasion, said that the project could be a milestone for the development and prosperity of the country once it comes into operation. It is one of the three new international airports planned in the Himalayan country.
Initially the Rs 22 billion-national pride project was planned to be completed by July, 2020. But Dev said that the project will be completed by July, 2021, also due to 15-month delay in starting construction work after laying foundation stone.
Of the 21 projects categorised as national pride projects by the government, five falls under the Ministry of Culture, Tourism and Civil Aviation. Dev also said that he would spare no effort to make sure that the national pride project is completed within the deadline.
Director general of Civil Aviation Authority of Nepal (CAAN) Sanjiv Gautam, on the occasion, said that Pokhara has waiting for this moment for almost 42 years. "The progress in expansion of Tribhuvan International Airport (TIA) and construction of Bhairahawa International Airport is not so satisfactory," he said, adding, "But Pokhara Regional International Airport project should be completed on time."
Completion of construction on time is important, as our plan is to repay the loan secured to build the project by using revenue of the airport," he added.
According to the CAAN, the loan will be repaid in 26 installment, two installments per year.
Project manager of China CAMC Engineering Yang Jerry, on the occasion, said that they have begun building dormitories for worker. "We will start major construction works after the monsoon ends," he said, committing to complete the project in time, if they get support from the locals.
The government had signed a $215.96 million concessional loan agreement with China's Export and Import (EXIM) Bank – in March 2016 – to construct the Pokhara Regional International Airport. The loan has to be cleared within 13 years of the completion of the seven-year grace period.
China CAMC Engineering – the main contractor of the Pokhara Regional International Airport Project that bagged the contract in May 2014 – is constructing the project in Engineering Procurement Construction (EPC) modality under 4D model according to the criteria set by International Civil Aviation Organisation (ICAO).
The government had acquired more than 3,100 ropani of land spread in Ward No 14, 15, and 18 of Pokhara Municipality four decades ago. It acquired another 521 ropani later on.
Rabindra Adhikari, president of the parliamentary Development Committee, said adding that the locals of Pokhara have worked very hard to see this day. "We have now authorised the construction company to fulfill our decades-long dream," he added.
Lawmakers Sarada Poudel and Sita Giri, Airport Construction Project director Pradip Adhikari, former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Ananda Raj Mulmi, president of Pokhara Chamber of Commerce and Industry Bishwa Shankar Palikhe, among others stressed on the need for the State to prioritise the construction of supporting infrastructures along with the construction of the airport.
Once the airport is ready for operation, it will have 2,500 meters long and 45 meters wide runway, which can handle medium category jets like Boeing 757 and Airbus 320, according to the project office.

Three more firms get Insurance licence

Three more life insurance companies have obtained operating licence from the Insurance Board today.
The insurance sector regulator granted Sun Nepal Life Insurance, Reliance Life Insurance and Reliable Life Insurance, according to Insurance Board (IB).
Altogether six new life insurance companies have obtained the operating licence since the the board resumed granting licence to the companies, whose applications were pending since long.
Earlier the board had granted operating licence to three life insurance companies including IME Life Insurance, Union Life and Jyoti Insurance, making a total of six new players. The entry of new life insurance companies in the market has made a total number of life insurance companies in the country to 15.
After increasing the paid-up capital requirement through the ‘Directives on Insurer Registration and Insurance Business Operation’ to Rs 2 billion and Rs 1 billion for life and non-life insurance companies, respectively, the insurance sector regulator has started granting licence. The companies that had submitted applications in the fiscal year 2007-08 were given three weeks’ time to resubmit applications with new capital requirement.
Earlier, Life Insurance companies need to have Rs 500 million paid-up capital and Rs 250 million for non-life firms.
Meanwhile, the board is also planning process for non-life insurance companies. The board has received four applications – from General Insurance, Sanima Insurance, Ajod Insurance and Manakamana Insurance – for the operating licence of non-life insurance companies.
There are currently 17 non-life insurance companies in operation in Nepal.

Experts stress policy regime to reward farmers

Experts emphasised on the need for a policy regime that can ensure that the communities which spend generations preserving and innovating plant genetic resources are rewarded. Such a regime should be able to provide due recognition to the farmers and breeders through intellectual property rights, and offer them a share in benefits derived from the use of their traditional knowledge which they have honed for generations.
Stating that research and development in agriculture is not limited to scientists and laboratories but takes place in the field by farmers, executive director of Enhanced Integrated Framework (EIF) at World Trade Organisation (WTO) Ratnakar Adhikari said, Addressing a two-day workshop ‘Reimagining the Governance of Genetic Resources and Intellectual Property for Agriculture and Food Security in Asia’ that started here today he said that it is critically important that communities that have spent generations preserving and innovating the genetic resources are rewarded. "Balancing breeders’ right with rights of farmers is a challenge."
Organised by South Asia Watch on Trade, Economics and Environment (SAWTEE), together with ARC Laureate Project on Intellectual Property and Food Security at the University of Queensland and Fridtjof Nansen Institute (FNI) the workshop aims at critically assessing the arrangements related to plant genetic resources in national laws and international agreements like the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the WTO, the Convention on Biodiversity, and the International Union for the Protection of New Varieties of Plants (UPOV).
This issue is highly relevant to Nepal as the country is currently exploring options to create policy and legal space for the rights of farmers and breeders, for example, in its draft law on plant variety protection and the existing Seed Act and Seed Regulations, according to the experts.
Among the developing countries, India is the only country that has adopted sui generis system to govern plant genetic resources.
Sharing India’s experience, registrar general at India’s Protection of Plant Varieties and Farmers’ Rights Authority, Rakesh Chandra Agrawal said that registration of plant genetic varieties had a slow start but now two-thirds of the total registrations are coming from the farmers. Discussing the Indian plant variety protection law, he pointed out that India even protects farmers from prosecution in cases of innocent infringement. India has legislated the Plant Variety Protection and Farmers’ Rights Act (PPVFR Act) in 2001, implementing a plant variety protection regime that protects the rights of both breeders and farmers.
Another research fellow at TC Beirne School of Law, University of Queensland Australia, Kamalesh Adhikari, on the occasion, pointed out that protecting the interests of plant breeders and farmers offers opportunities in areas of agriculture, food security and the use of plant genetic resources.
Papers on the experience of different countries, including Nepal, India, Bangladesh, Pakistan, Sri Lanka, Timor-Leste, Thailand and Ecuador regarding the governance of genetic resources and intellectual property will be present during the workshop.

Cooking gas price down by Rs 25 per cylinder

Nepal Oil Corporation (NOC) has reduced the price of Liquefied Petroleum Gas (LPG) – popularly known as cooking gas – by Rs 25 per cylinder.
A cooking gas cylinder will now cost Rs 1,325 per cylinder, according to the state-owned petroleum monopoly. "The new price will come into effect from Wednesday."
With the new price, NOC still earns a profit of Rs 74.90 on sales of every cylinder of LPG. According to the NOC, the Indian supplier has reduced the price of cooking gas by Rs 54 per cylinder.
The decision is expected to give some respite to consumers, NOC spokesperson Sitaram Pokhrel said, adding that the decision to adjust the price downwards was based on price in the international market that has been continuously coming down in recent month.
Pokharel said that the NOC revised the LPG price after Indian Oil Corporation (IOC) – the sole supplier of petroleum products to Nepal – reduced the price. "However, prices of other petroleum products have remained unchanged, as according to Pokharel, IOC has raised prices of rest of the petroleum products this time. "It will cause the NOC's projected profit to drop to Rs 620 million per month from Rs 800 million."
The Indian supplier has raised the price of petrol by 1.08 per litre and that of diesel by 48 paisa per litre. Also, kerosene price has gone up by Rs1.10 per litre and air fuel has become costlier by Rs1.14 per litre.
According to the revised prices, NOC will earn a profit of Rs 4.84 on sales of every litre of petrol and Rs 17.13 on sales of every litre of kerosene. It will, however, suffer a loss of Rs1.18 on sales of every litre of diesel. Likewise, the NOC will earn a profit of Rs 9.16 on every litre of fuel sold to domestic airlines and Rs 20.29 on every litre of fuel sold to the international airline companies.
Last month too NOC had reduced petroleum prices.

Himalayan Travel Mart to be organised every year

The Pacific Asia Travel Association (PATA) Nepal Chapter and Nepal Tourism Board (NTB) today announced that Himalayan Travel Mart would be organised every year in the country to boost domestic tourism.
Addressing a debriefing of the Himalayan Travel Mart that Nepal hosted between June 1 and 4, NTB chief executive officer (CEO) Deepak Raj Joshi said that Nepal had not been able to host big tourism events in the country for many years even though tourism events are crucial to promote Nepal as a tourist destination in the global market.
"The Himalayan Travel Mart this year was a grand success with hundreds of international tourism experts, bloggers and media representatives attending the event and promoting Nepal’s tourism globally," he said, adding that the PATA Nepal Chapter and NTB will jointly organise such marts every year from now onward in between the last week of May and first week of June.
Joshi also said that the Himalayan Tourism Mart this year has already started showing its impact on domestic tourism, with relatively more number of tourists visiting the country in the first half of the year.
According to the Department of Immigration, Nepal received a total of 460,237 tourists in the first half of this year via air route, against 313,512 in the corresponding period of the previous year.
President of Nepal PATA Chapter Suman Pandey, on the occasion, informed that the Himalayan Travel Mart was able to promote Nepal’s tourism among more than 250 foreign tourism stakeholders and it was a great achievement for the domestic tourism industry. "The government and the private sector should collaborate to organise more of such events in the country to promote Nepal’s tourism potential and attract more foreign visitors," he added.