A parliamentary committee has given its approval to an anti-money laundering bill, marking a preliminary step toward aligning existing laws with international standards. The Law, Justice, and Human Rights Committee of the House of Representatives made a few modifications to the Amendments to Some Laws related to the Anti Money Laundering and Business Promotion Bill.
This development is particularly crucial because Nepal is under pressure to address deficiencies identified in the recent Mutual Evaluation Report by the Asia Pacific Group on Money Laundering (APG). The report raised concerns about Nepal’s compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) policies and recommended legislative changes as a priority.
The bill endorsed by the parliamentary committee aims to amend 19 different laws to align with international AML/CFT standards. Notably, the cap on deposits allowed in cooperatives, initially set at Rs2.5 million, was removed, as the committee believes the deposit amount should be a matter of individual choice.
Additionally, the bill includes a provision to prevent the establishment of new casinos within five kilometers of international borders, extending the existing limit from three kilometers. This change is intended to curb potential cross-border criminal activities associated with casinos.
Despite the committee’s endorsement, the bill must still pass through both houses of parliament and receive authentication from the President to become law. The delay in passing such legislation has been criticized by the APG as a lack of high-level political commitment.
Nepal’s actions concerning anti-money laundering laws, enforcement measures, and penalties for major offenders will be closely monitored by international agencies, with the possibility of FATF greylisting looming in the absence of swift and comprehensive action.
The FATF, a global anti-money laundering agency, sets standards for AML/CFT. A plenary session is expected to take place in late October, during which the FATF will address the concerns raised in the APG report regarding Nepal’s legislative and enforcement shortcomings in these areas. The report highlighted the absence of clear provisions for risk assessment in the Money Laundering Prevention Act and the failure to explicitly criminalize the financing of travel for the purpose of terrorist activities. Furthermore, shortcomings in targeted financial sanctions against those involved in terrorism were also pointed out by the APG.
By FCCT Editorial Team
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