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Money laundering law too lax in Nepal
KATHMANDU, MAY 18 -
With Nepal being high on the agenda among South Asian countries along with Pakistan and Sri Lanka at the plenary meeting of the Financial Action Task Force (FATF) to be held in Amsterdam from June 21-25, Nepal has sent it a commitment letter on the outstanding issues it is required to fulfil.
Nepal has to fulfil the requirements of the FATF, an inter-governmental organisation of G-20, within September 2010. Nepal is one of the 20 countries listed by the FATF as nations seriously deficient in “anti-money laundering (AML) and combating financing of terrorism (CFT)”.
According to government sources, the commitment letter sent by Finance Minister Surendra Pandey to the FATF stated that the Nepal would ratify the four UN conventions related to anti-money laundering and corruption within the current fiscal year. Nepal is required to ratify the UN conventions including the convention against corruption, terrorism financing and transnational crime.
Likewise, the letter sent on Feb. 10 has also stated that Nepal would bring the Mutual Assistance Act within 2010 which will give recognition to evidence obtained from abroad to present at the court. The necessity of such an act was sought as criminals involved in money laundering and terrorism financing may go abroad after committing a crime.
As part of its commitment, the finance minister has also pledged that the government would set up a web-based connection between the agency that looks into money laundering activities (the Financial Information Unit of Nepal Rastra Bank) and the agencies (banks, land revenue offices) that will provide details about suspicious transactions within 2010.
“Nepal has to strengthen the information system of the FIU and institutional strengthening of the Department of Revenue Investigation since it is an implementing agency,” said Mahesh Dahal, director general of the Department of Revenue Investigation. The FATF had written a letter to Nepal seeking the latter’s commitment on the above issues on Feb. 2. The Paris-based anti-money laundering body has showing concern over Nepal’s failure to implement anti-money laundering laws and rules that are already in place.
While describing Nepal as being seriously deficient in AML and CFT in its recent global report, the FATF has blamed Nepal of posing a risk to the international financial system by failing to correct its financial regime to curb money laundering and terrorism financing.
In its report, the FATF has asked Nepal to address the deficiencies by (1) Adequately criminalising money laundering and terrorism financing, (2) Establishing and implementing adequate procedures to identify and freeze terrorist assets, (3) Implementing adequate procedures for confiscation of funds related to money laundering, and (4) Enacting and implementing appropriate mutual legal assistance legislation.
Posted on: 2010-05-19 08:08
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