KATHMANDU, March 16: The government has ramped up efforts to align its policies and programs to delist Nepal from the grey list of the Financial Action Task Force (FATF) within mid-February 2026.
According to an official of the Ministry of Finance (MoF), the policies and programs will incorporate preparation of the work procedure and its implementation framework to remove the country from the grey list.
“For this purpose, the policies and programs will focus on a detailed study to minimize the economic activities of the informal sector. In this regard, the ministry will be forwarding effective measures to transform the informal sector businesses to the formal sector gradually,” the source said.
FATF’s Grey List: A Wake-Up Call for Nepal
The policies and programs of the government is considered one of the major components of the government’s annual budget. Apart from talking about the allocation of the state’s financial resources in the budget, it outlines the government’s strategic direction and related specific initiatives for the concerned fiscal year. “The policies and programs this year are being proposed to act as the umbrella framework to guide the sub-national governments to streamline their economic activities.”
The second FATF Plenary held last month decided to keep Nepal along with 24 other countries under its grey list. The FATF has pointed out the country’s major weaknesses in being apathetic to risks of illegally earned money as the reason for adding Nepal to the grey list.
The intergovernmental body, which combats money laundering and terrorist financing, has raised concerns over the need for Nepal to increase government surveillance based on risk intensity regarding the transactions being made in cooperatives, casinos, mines and mineral resources. It has also pointed out the need for capacity building of anti-money laundering bodies in various government institutions and effective coordination among these organizations.
Following the development, the government has expressed its commitments time and again to keep the country out of the negative listing within the next one year. The International Monetary Fund, while approving its remaining installment under the extended credit facility on Friday, also cautioned the government to take the matter seriously and to take prompt action over the issue.
According to the MoF, the government has expedited preparation of the policies and programs for the next fiscal year and has sought to complete it by mid-April. President Ram Chandra Paudel will then present the policies and programs of the government in a joint meeting of the House of Representatives and the National Assembly on May 29.
