Valley
State entities keep financial intel body in dark
Some of the government entities have been found to be poor in reporting to Financial Information Unit, the country’s financial intelligence wing which takes up and forwards cases of suspicious financial transactions for further investigation.Prithvi Man Shrestha
Some of the government entities have been found to be poor in reporting to Financial Information Unit, the country’s financial intelligence wing which takes up and forwards cases of suspicious financial transactions for further investigation.
According to the Financial Information Unit, a national agency responsible for receiving, processing, analysing and disseminating financial information and intelligence on suspected money laundering and terrorist financing activities, government agencies have been slow to report suspicious transactions.
Government agencies, such as the Office of the Company Registrar, Land Revenue Offices and Department of Customs, have been designated as reporting entities in line with the Money Laundering Prevention Act.
Other reporting entities are all banks and financial institutions, money changers and remitters, cooperatives, insurance companies, and securities business persons, dealers in precious stones and metals, casinos, independent accountants and legal professional, notary public, trust and company service providers.
Though there have been reports of suspicious financial transactions in the past, the Centre for Investigative Journalism-Nepal on January 16 had exposed how Nepal’s businessmen were stashing wealth in offshore companies and bringing their dirty money into the country in the name of foreign direct investment. The expose had listed at least 55 Nepalis and non-resident Nepalis, saying they were parking their dirty money at offshore companies in tax havens.
“We are hardly receiving reporting about suspicious transactions from the government entities,” said Ramu Poudel, director at the Financial Information Unit. “We can call it non-existent.”
In the last fiscal year 2017-18, the financial intelligence unit received as many as 45,93,5817 reports on threshold transactions (transactions above certain threshold by the FIU). The number of reporting of suspicious transactions stood at 887.
“Around 80-90 percent of reporting of both threshold transactions reporting and suspicious transactions came from banks,” said Poudel.
But, government agencies concerned said they have started reporting lately only. They also said that they had little knowledge about what types of transactions should be reported to the FIU.
“When there are frequent transactions and massive up and down in share prices of particular companies, we report to the FIU,” said Arjun Prasad Khanal, deputy registrar at the Office of Company Registrar (OCR). “There are not many such cases. So, very few of them have been reported to the FIU.”
He, however, said that the OCR was working on a regulation which would enable it to bring the owners of the companies who do a lot of transactions by being largely remaining invisible in public. “As there is a risk related to money laundering in their transactions, we aim to bring them under greater supervision,” said Khanal.
Although the Customs Department deals with entire transactions of exports and imports, it has hardly reported about suspicious transactions.
Toyam Rana, director general at the department, said they don’t know how to categorise the transactions of exporters and importers as suspicious. “International payment is done largely through the banking channel and the banks can identify any suspicious transaction by those involved in international trade.”
After analysing the reported suspicious transactions, the FIU passes the cases on to law enforcement agencies such as the Department of Money Laundering Investigation, Commission for Investigation of Abuse of Authority, Nepal Police, Department of Revenue Investigation, Inland Revenue Department, foreign FIUs and other competent authorities as per their mandate and nature of the case.
In the last fiscal year, the FIU forwarded 312 cases to different law enforcement agencies. According to Jiwan Prakash Sitaula, director general of the Department of Money Laundering Investigation, the information from the FIU has been helpful in conducting further investigation into money laundering cases. “Recently, we filed two cases on money laundering based on information provided by the FIU,” he said.
He said that the department could investigate into more cases of money laundering provided that the FIU is reported by more reporting entities.