KATHMANDU, April 8: Greater policy harmonization among government agencies has been urged to curb the flow of dirty money.
As some world leaders are under pressure to resign over the Panama Papers leak concerning international illicit money flows, government agencies in Nepal have started debating policy harmonization. "Nepal Investment Board approves mega foreign investments but it now has to be extra careful to investigate backgrounds before approving foreign investments," according to a high source at the Department of Money Laundering Investigation (DMLI).Likewise, banks and financial institutions also have to check the backgrounds before handling any transactions or opening accounts for foreign or domestic investors, the source said, adding that Article 6 of the Anti-Money Laundering Act has restricted the opening of accounts for shell companies -- offshore bogus companies -- and carrying out any transactions with them. "If found out, the banks and financial institutions will be punished under the Act."
Though banks and financial institutions already have to report transactions of over Rs 1 million or suspecious transactions to the Financial Information Unit (FIU) under the central bank, the Panama Papers leak has again raised a serious question over the possibility of such institutions becomng involved 'unknowingly'.
Banks and financial institutions have to be extra careful now, the source told Republica.
Likewise, the government has also to seriously take stock of registered companies to curb the flow of dirty money, the official suggested. "Though Nepal has committed itself to curb the flow of dirty money -- earnings through corruption, tax evasion and black marketing -- the government itself is promoting black marketing and institutional corrpution, and this could damage the economy in the long run."
Meanwhile, the Department of Money Laundering Investigation (DMLI) on Wednesday called on stakeholders including the revenue administration, the central bank's Financial Information Unit (FIU) and the police, to discuss the possibility of dirty money flowing into the country from offshore shell firms, and also the possible Nepali names in the Panama Papers leak.
According to DMLI chief Damodar Regmi, the meeting discussed the seven Nepalis fingured by the Panama Papers leak. "We are seriously discussing financial connections, transactions and the possibility of tax evasions," he said, adding that the department has restarted the profiling of names that have figured in the Panama Papers although the leak has not identified any of the names. "It has, however, claimed that the names will be published in May," Regmi added.
Last year also, the central bank, the Revenue Investigation Department (RID) and DMLI had tried to investigate names that had figured in rumours following revelations of illegal outflow of money to a Swiss Bank.
Such investigations are very tricky, Regmi said, adding that without any authentic information it's impossible to track the flow of dirty money and the activities of bogus companies. "However, we have restarted the process of profiling names and restarting investigations," he added.
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