Financial Action Task Force (FATF) has said Nepal has to enact five ordinances related to anti-money laundering (AML) urgently as parliamentary statutes.

A recently-concluded plenary meeting of the global anti-money laundering body in Paris has given until March 25 to Nepal to comply with the instruction to come out of FATF’s regular oversight. “If we enact the five ordinances, Nepal will come out of FATF’s regular oversight,” said Maha Prasad Adhikari, deputy governor of Nepal Rastra Bank (NRB), who took part at the FATF meeting in Paris. “Once that is done, the risk of being blacklisted will be over.”

In its report, the FATF has complemented Nepal for its efforts to improve the AML/CFT regime. However, Nepal is still on its grey list.

Till now, the parliament has endorsed two ordinances—Anti-Money Laundering and Mutual Legal Assistance. Three other bills— Proceed of Crime, Seizing, Freezing and Confiscation of Properties, Extradition, and Organised Crime Control—are yet to be endorsed.

According to officials, the government is required to come up with a replacement bill which will ensure these ordinances come up as acts. Senior government officials said the Ministry of Law has already prepared a replacement bill for the ordinance on Mutual Legal Assistance, while the Ministry of Finance is said to be preparing a similar bill for the Anti-Money Laundering ordinance and ordinance on Proceed of crimes seizing, freezing and confiscation of properties.  

According to the FATF report, Nepal has made significant progress in improving its AML/CFT regime by adequately criminalising money laundering and terrorist financing, establishing and implementing adequate procedures to identify and freeze terrorist assets, implementing adequate procedures for the confiscation of funds related to money laundering, enacting and implementing appropriate mutual legal assistance legislation, ensuring a fully operational and effectively functioning financial intelligence unit, and establishing adequate suspicious transaction reporting obligations for money laundering and terrorist financing.

“The FATF was able to confirm all of the technical requirements are in place and Nepal’s strong commitment to implementing the reforms. However, Nepal’s recently elected Parliament will need to consider the ordinances and ratify them as permanent parliamentary statutes. The FATF encourages Nepal to urgently enact the ordinances as Parliamentary statutes within the statutory timeframe. Until then, the FATF will continue to monitor Nepal,” states an FATF statement.

During the plenary, FATF President asked the Asia Pacific Group on Money Laundering (APG) when Nepal would endorse the ordinances from the parliament. 

In the latest FATF plenary, three countries—Bangladesh, Vietnam and Antigua Barbuda—were been removed from regular oversight. However, Pakistan, Indonesia and Myanmar are still blacklisted.