The government is going to work with a five-year strategy to improve the situation related to money laundering.
The first meeting of the Money Laundering Steering Committee chaired by Finance Minister Barshaman Pun passed the draft of the strategy with amendments on Wednesday. The strategy will be implemented once approved by the Council of Ministers.
In the meeting held at the ministry under the chairmanship of the Finance Minister Pun, the committee members including Minister for Law, Justice and Parliamentary Affairs Padam Giri, Chief Secretary Dr. Baikuntha Aryal, Governor of Nepal Rastra Bank Maha Prasad Adhikari, Attorney General Dinmani Pokharel, Coordinator of the Coordination Committee under the Steering Committee and Secretary of the Office of the Prime Minister and Council of Ministers Lila Devi Gadtaula and Member Secretary of the Steering Committee and Secretary of the Ministry of Finance Dr. Ram Prasad Ghimire participated.
According to the Ministry of Finance, the name of the strategy to be implemented in the current fiscal year 2024/25 is “National Strategy and Action Plan on Prevention of Financial Investments in Money Laundering and Terrorist Activities”.
Mahesh Acharya, joint secretary and chief of Economic Policy Analysis Division of the Ministry of Finance, said that the strategy emphasises the issue of providing stability to the country’s financial system and overall economy from the risk of financial crimes.
According to him, it will work to reduce financial crimes such as corruption, revenue evasion, hundi and cryptocurrency transactions.
Similarly, issues for controlling drug trafficking, organised crime, criminal profit, internal terrorism, fraud, theft, counterfeit currency trading, black market and smuggling, and other crimes are also included in the strategy.
Last year, the Asia Pacific Group (APG) working in collaboration with the Financial Action Task Force (FATF), an international organisation that monitors money laundering issues, conducted a technical assessment of the money laundering situation in Nepal.
After the mutual evaluation conducted by APG in October 2022, Nepal made technical (legal, policy and structural) reforms and suggested the effectiveness in the field of money laundering. Nepal is also a member state of APG.
Based on the suggestions of FATF and APG, Nepal has amended the Money Laundering Prevention Act through the Parliament. The APG delegation is coming to Nepal again in October for the next phase of study.
Both of those organisations have been suggesting implementing the existing legal system and amended those systems accordingly to improve the situation related to money laundering.
The FATF has been warning that if the current situation is not improved, Nepal may fall into the risk (grey list) in regard to money laundering.
In case of being on the ‘grey’ list of asset laundering, the credit of the country at the international level will fall, as well as the reduction in foreign aid, loans and investments, and international banking transactions will be challenging.
Similarly, there is a danger that the remittance flow will decrease and the hundi business will increase and there will be a crisis in the economy as a whole, said the Ministry.
In the previous session of the Parliament (February 7, 2024, the House of Representatives passed ‘the Bill, 2080 to amend certain laws related to the Prevention of Money Laundering and Promotion of Business Environment’.
Through this, 19 different laws related to money laundering have been amended and made up-to-date.
Through the bill, the Export Import (Control) Act 2013, Ship Registration Act 2027, Land Revenue Act 2034, Tourism Act 2035, Building Act 2055, Securities Act 2063, Nepal Rastra Bank Act 2058, Human Trafficking and Transportation (Control) Act, 2064, Criminal Assets and Instruments (Seizure, Control and Confiscation) Act 2070, Mutual Legal Assistance Act 2070, Prevention of Organized Crime Act 2070, Electricity Regulatory Commission Act 2074, Cooperatives Act 2074, Foreign Investment and Technology Transfer Act 2075, Insurance Act 2079, National Civil Crime (Code) 2074 and National Civil Criminal Procedure (Code) Act 2074 have been amended.
The Act has made provisions such as increasing the jurisdiction of the police in matters such as collection of information and prosecution related to money laundering, regulation of casinos, inclusion of money laundering in criminal offences.
The Act has also included transactions carried out through electronic and digital means under the scope of money laundering. In Section 7 (b) of the Act, there is a provision that there will be a Steering Committee under the chairmanship of the Finance Minister.
The Act empowers the Steering Committee to prepare drafts of policies and programmes related to money laundering, the work to be done for money laundering, the creation of necessary mechanisms for that, as well as the coordination and monitoring of all agencies of the federal, provincial and local governments.
For the implementation of the Money Laundering Prevention Act, the committee can also take action in addition to giving instructions.
Similarly, the Steering Committee will approve the National Risk Assessment Report on Money Laundering sent by the Coordinating Committee and prepare an annual report on Money Laundering and submit it to the Council of Ministers.
