The Financial Action Task Force (FATF) - the international watch-dog against money laundering - is preparing to remove Nepal from its watch list within few months, thanks to the government´s last minute effort to endorse the required regulation on money laundering.
The FATF established in 1989 sets the standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the international financial system.
The cabinet had recently approved two regulations on Mutual Legal Assistance, and Listing and Delisting Individuals, Groups and Organizations recently as international requirement. It saved the country from getting backlisted by the FATF.
“To our great relief, the FATF is working to remove Nepal from the watch list as we have fulfilled its requirement by approving the two necessary regulations before its meeting in Paris,” Shanta Raj Subedi, secretary at the Ministry of Finance (MoF), told Republica. “The FATF officials are satisfied with the progress that we have made in taking necessary legal preparation to combat money laundering.”
According to Subedi, a team from FATF will pay on-site visit to Nepal in December to take account of Nepal´s preparation in implementing the legal provisions against money laundering.
Nepal will be permanently deleted from the watch list if the team gives report to FATF about the effective implementation status of anti-money laundering laws.
"We have averted the risk of being blacklisted by the FATF. Now, we have challenge of implementing the laws on anti-money laundering," added Subedi.
The plenary meeting of FATF held in Paris on October 16-18 could have blacklisted Nepal had the country failed to approve the crucial regulations ahead of the meeting.
Nepal had made high-level political commitment to cooperate with Asia Pacific Group of FATF to fight money laundering by formulating necessary laws.
Nepal has enacted Mutual Legal Assistance, and Extradition Ordinance, Confiscation, Freezing and Control of Assets Act and made second amendment to the Money Laundering Act.
Despite this, the FATF had demanded that Nepal make additional commitment to fight money laundering by making legal provisions on adequately criminalizing money laundering and terrorist financing, establishing and implementing adequate procedures to identify and freeze terrorists´ assets, and implementing adequate procedures for the confiscation of funds related to money laundering, among others.
Though other deficiencies were fulfilled, Nepal had not approved regulations on Mutual Legal Assistance Regulations, and Listing and Delisting of terrorists until the first week of October.
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