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Nepal endorsed an anti-money laundering bill as the initial step to combat financial crime and enhance the strength of jurisdiction to make the country’s financial ecosystem compatible with international standards.
The Nepal House of Representative Committee for the Law, Justice, and Human Rights approved amending new rules in the AML measures related to a business promotion and anti-money laundering bill. After the various deficiencies pointed out in the Mutual Evaluation Report by the Asia Pacific Group on Money Laundering (APG), it is essential for Nepal to introduce a rigorous change in the legal framework. These amendments in the country’s compliance procedure will assist in aligning with the CFT and AML standards. The report advised,” Nepal should pass the Amendments to Some Laws relating to the Anti Money Laundering and Business Promotion Bill. When passed, Nepal should expedite implementation and significantly enhance the capacity of impacted competent authorities to undertake their new and modified anti-money laundering and combating terrorist functions.”
The law approved by the Nepal parliament amends the 19 laws to make the country’s financial safeguard measures compatible with the international obligations standards. Chairperson of the house committee, Lawmaker Bimala Subedi, stated, “whilst passing the bill, we have removed the proposed cap on deposits to be kept in the cooperatives. We removed the cap because it is a matter of individual’s choice how much money one wants to deposit in any financial institution.” The government previously proposed limiting cooperative investment amounts to Rs 2.5 million. The restriction was designed to reduce risks to depositors because cooperatives are not well-regulated.
The bill has to pass both houses of parliament before being issued as the official legalisation, currently, it is only endorsed by the committee. The bill will become law after the President authenticates it. The APG stated that the delay in approving strict regulatory measures is the breakdown of the Nepal government and demonstrates a lack of political commitment to prevent money laundering. A Government official stated,” amendments to anti-money laundering laws, actions by enforcement agencies to implement the amended laws, and action against big offenders by the state are necessary to avoid Nepal’s greylisting by the Financial Action Task Force (FATF) over the next one year.”
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