Nepal may be removed from FATF ‘grey list’


Nepal could be removed from the current grey list by the Financial Action Task Force (FATF) after three months provided that the country convinces the global anti-money laundering body on the implementation of the anti-money laundering laws.

The grey list refers to the countries acting to improve the anti-money laundering measures. In June, Nepal avoided being blacklisted by the FATF after two new anti-money laundering laws—Amendment to the Anti-Money Laundering Act (2008) and the Proceeds of Crime Bill were introduced. Ever since Nepal made high-level commitments on anti-money laundering and combating financing of terrorism (AML/CFT) legislations and other measures in February 2010, the country has already introduced six laws and endorsed a few international conventions.

“Nepal has a great chance of being removed from the FATF grey list if we can convince the FATF team that we have started implementing the anti-money laundering laws,” said Baikuntha Aryal, joint-secretary at the Finance Ministry.

According to him, the FATF is expected to send its team to observe Nepal’s status in implementing the laws in October and the country should be able to convince them of the progress at the implementation level. The team usually visits the country every two-three years.

“The FATF team is expected to meet officials from the concerned agencies established to combat money laundering,” said a high-level official at the Nepal Rastra Bank (NRB).

In order to implement the anti-money laundering laws, the government has also been preparing regulations. “Work is under way to prepare necessary regulations to implement the recent ordinances,” said Aryal.

As long as the country remains on the list, Nepal has to answer the queries of bodies such as the FATF and the Asia Pacific Group on Money Laundering (APG) of which Nepal is a member. The FATF has also evaluated Nepal’s progress positively in its statement after its plenary held in Oslo in June. Bolivia, Brunei Darussalam, the Philippines, Sri Lanka and Thailand were removed from the grey list from the last plenary of the FATF.

It has stated that since February 2013, Nepal has taken significant steps to improving its AML/CFT regime, including by promulgating the Asset (Money) Laundering Prevention Amendment Ordinance and the Freezing, Seizing and Confiscation of Proceeds and Instrumentalities of Criminal Offences Ordinance.

However, the FATF has said that it has determined three deficiencies of Nepal that include establishing and implementing adequate procedures to identify and freeze terrorist assets; demonstrating adequate implementation of mutual legal assistance legislation; and ensuring an effectively functioning Financial Intelligence Unit (FIU). The government has made efforts to strengthen the bodies responsible for implementing the anti-money laundering measures including the revamping of the Department of Money Laundering Investigation and the automation of the FIU.

Posted on: 2013-07-07 09:01