The move is a way forward to avoid FATF’s greylisting of the country; however implementation side still poses challenge   

KATHMANDU, Feb 8: The House of Representatives (HoR) on Wednesday endorsed the Anti Money Laundering and Business Promotion Bill. The move is likely to avoid Nepal falling in the greylist of the Financial Action Task Force (FATF).

The federal parliament passed the bill at a time when the country was facing an increasing risk of being greylisted for its inability to implement the necessary laws in  compliance with the international standards and policy regarding anti money laundering and combating financing of terrorism (AML/CFT). The parliamentary committee on Law, Justice and Human Rights had endorsed the bill earlier on October 11. The bill will take full shape after it receives final approval from the National Assembly and gets authentication from the president.   

The amendments to some laws relating to the Anti Money Laundering and Business Promotion Bill that was endorsed by the HoR include 19 different laws to make them compatible with international standards on AML/CFT. These include Land Tax Act 1977, Tourism Act 1978, Building Act 1998, Nepal Rastra Bank Act 2002, Securities Act 2007 and Human Trafficking and Transportation Control Act 2007.

Similarly, amendments to the Insurance Law (Amendment Bill) 2023, Cooperatives Act 2017, Foreign Investment and Technology Transfer Act 2019, Electricity Regulatory Commission Act 2017 and Prevention of Organised Crime Act 2013, among others, are incorporated in the new provision.

The government has been under pressure to introduce legislations to address many deficiencies pointed out by the recent Mutual Evaluation Report about Nepal prepared and unveiled by the Asia Pacific Group on Money Laundering (APG) in September, 2023. The APG has described the delay in passing the legislation by Nepal's parliament as a lack of high-level political commitment.

By pointing out many deficiencies of Nepal, the report recommended urgent legislative changes as a major ‘to do list’ to address the shortcomings. The report has even stressed on the need to expedite implementation of the laws along with significantly enhancing the capacity of the authorities concerned in the line.

The FATF is the global anti-money laundering agency which sets standards regarding AML/CFT. Expressing its commitment to amend the necessary anti-money laundering laws, Nepal had urged the agency to provide a grace period of one year before keeping the country in the greylist. 

 
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