Swindlers’ list

  • The promise of a ‘serious probe’ devoid of any strategy is frustratingly familiar

Jan 25, 2019-

When the Centre for Investigative Journalism-Nepal released its report revealing how over 50 Nepalis exploited secretive tax regimes and broke the country’s law by investing in different offshore companies, sections of the public eagerly anticipated a swift and stringent response from the government. And when the Prime Minister’s Office directed the Financial Information Unit under Nepal Rastra Bank to expedite ‘a probe into businesses and businesspeople’ last week, those steps appeared to be making ground—at least upon cursory examination. The promise of a ‘serious probe’ devoid of any comprehensive strategy is not only wholly inadequate but also frustratingly familiar.

An almost parallel call was made three years ago, when the Panama Papers, leaked by the International Consortium of Investigative Journalists, revealed the names of more than 20 Nepalis parking their wealth in a number of tax haven countries and territories. A day after the Panama Papers were exposed in April 2016, the Department of Money Laundering Investigation promised it would ‘begin a probe’ after calling a meeting of key stakeholders including the Financial Information Unit of Nepal Rastra Bank, the Department of Revenue Investigation and the Nepal Police. Following the meeting, the head of the Department of Money Laundering Investigation promised to adopt a ‘risk-based supervision system’ and claimed that the Financial Information Unit and the Central Investigation Bureau of the Nepal Police would ‘conduct an investigation’. As recent revelations have indicated, the investigations reaped minimal results in the last two years.

In this discouraging context, the call for a probe is far from enough. Until the probe is supplemented with a clear and targeted strategy, the call is meaningless and can not be deemed an adequate response to the Centre for Investigative Journalism-Nepal’s report. One would also think that a necessary prerequisite for a probe would be a well-monitored committee to issue it. At the risk of adding yet another example to its (now growing) list of hollow and foundationless promises, the officials concerned must demonstrate their claimed commitment through tangible results.

As Nepal’s third mutual evaluation report by the Financial Action Task Force (FATF), a global anti-money laundering watchdog, is nearing its 2020 deadline, time is of the essence—especially as the country faces potential blacklisting. In 2010, when FATF included Nepal in its list of ‘nations that failed to comply with the action plan related to anti-money laundering and combating financing of terrorists’, the government leapt into action, making tangible strides in improving anti-money laundering strategies. In response to the pressure, Parliament devised several legislative measures to monitor money laundering—including the endorsement of the Anti-Money Laundering Act and the establishment of the Department of Money Laundering Investigation in 2011. After being removed from the FATF’s watch list in June 2011, the government seemingly forgot about its commitment to the cause. In the seven years of existence, the Department of Money Laundering Investigation has filed a meagre 40 money laundering cases at the Special Court, and most of them against petty or more low-profile violators. In the past three years, only 10 cases were filed, most of them related to minor charges. This points to a dismal conclusion: Issues related to money laundering only seem to matter when global monitoring organisations intervene.

To avoid a perpetually repeating historical cycle, it is vital for officials to back up the call for a probe with a concrete and tangible strategy. Too often in Nepali governance, the act of issuing actions—even if they are ambiguous and myopic—is deemed a progressive step forward. And too often, these issued actions are later relegated to a long list of broken promises that have also succumbed to the government’s habitual lack of follow-through. If the ruling party claims to differ from its predecessors, its handling of this case is a concrete opportunity to demonstrate how.

Published: 25-01-2019 07:13

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