The government has ramped up efforts to align its policies and programs to remove Nepal from the grey list of the Financial Action Task Force (FATF) by mid-February 2026.
According to an official from the Ministry of Finance (MoF), the government is preparing a work procedure and implementation framework to achieve this goal. A key focus will be conducting a detailed study to reduce informal economic activities and gradually transition businesses from the informal to the formal sector.
Strengthening Anti-Money Laundering Measures
The second FATF Plenary held last month kept Nepal on the grey list, along with 24 other countries, citing major weaknesses in addressing risks associated with illegally earned money. FATF emphasized the need for Nepal to enhance surveillance on high-risk financial transactions, particularly in cooperatives, casinos, and the mining sector. It also called for capacity building in anti-money laundering institutions and improved coordination among relevant government bodies.
The government has repeatedly committed to addressing these concerns within a year. The International Monetary Fund (IMF), in its recent approval of an extended credit facility installment, also urged Nepal to take the matter seriously and act swiftly.
Policy Framework and Upcoming Plans
The government’s policies and programs—integral to its annual budget—will serve as an overarching framework to guide sub-national governments in streamlining economic activities. The MoF has expedited preparations for the upcoming fiscal year’s policies and programs, aiming to finalize them by mid-April.
President Ram Chandra Paudel is set to present these policies and programs in a joint session of the House of Representatives and the National Assembly on May 29. These efforts reflect Nepal’s commitment to implementing strategic reforms to ensure financial transparency and economic stability while working toward its removal from the FATF grey list.
