The warning came at a meeting of the Financial Action Task Force (FATF), of which Nepal is a regional member, in Paris last week where it was reviewing the progress on fighting money laundering and terrorism financing. [break]
During the meeting, Nepal informed the FATF about the ratification of UN Convention on Suppression of Terrorism Financing and UN Convention against Transnational Organized Crime, and formation of separate department to oversee money-laundering, among others.
However, the Task Force asserted that mere ratification will not ensure effective implementation of those conventions and asked us to put in place a mechanism to implement them, said a Ministry of Finance (MoF) official, who attended the meeting.
“Besides, we were informed that our Ministry of Foreign Affairs has not yet notified United Nations about the ratification of those two UN conventions,” he added.
FATF members also pointed out a number of laws and recommendations of Asia Pacific Group on Money Laundering that Nepal has long committed to put in place, but has not done so far.
“Now, we will now need to formulate a law that categorically depicts UN-adopted procedures and actions for controlling financing of terrorism activities,” said Khum Raj Punjali, director general of Department of Money Laundering Investigation.
Likewise, Nepal will also need to amend laws on anti-corruption, incorporating provisions and spirit of global convention on anti-corruption that the country ratified earlier this year.
It will need to put in place law on controlling organized crime, mutual legal assistance, and extradition agreements with FATF members for effectively dealing against persons involved in money laundering and terrorism financing.
“The FATF has set a fresh timeline, seeking us to implement its recommendations by February 2012, when it is meeting again in Rome, Italy,” said a source. “If we failed to cite substantial progress on those recommendations then, FATF has warned it will tag us as high risk country,” he told Republica.
Nepal was notified as ´high risk´ country and ran the risk of being blacklisted by the global anti-money laundering body about nine months ago after the government dragged its feet on implementing commitments it made in the international forum.
However, it had managed to escape the risk and improved its ranking after Parliament on June 24 ratified UN Conventions to check terror financing and the flow of dirty money.
“Fulfilling fresh and long due commitments will test political leaders´ sensitivity again. We hope we will be able to make substantial progress this time round,” said the source.
In case a country is blacklisted, countries across the globe will not honor its letter of credit and business transactions. This will affect its international trade, movement of its citizens across the globe and foreign assistance as well.
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