Nepal at Risk of ‘Graylisting’ for Allowing Money Laundering
Nepal could be added to FATF’s greylist as the global AML watchdog has found a number of deficiencies in the countries’ Anti Money Laundering and Countering Terrorism Financing (AML/CTF) standards.
The Asia Pacific Group on Money Laundering recently visited Nepal to do its mutual analysis, however, the only progress that has been made as of December 16th will be included in the assessment report.
Nepal was placed on the FATF’s “greylist” from 2008 to 2014, however, changes in its AML regulations allowed the country to be removed from the list in 2014.
The government currently needs to amend 15 laws in order to comply with AML requirements; the process started but wasn’t finished before the term of the country’s House of Representatives ended.
The effects of a greylisting include the potential for future blacklisting, which would result in the nation losing access to the top banks of the world and the rest of its legal international trade.
Despite returning to compliance in 2014, Nepal had just avoided being blacklisted in 2012 after last-minute diplomatic efforts.
There were a number of deficiencies in Nepal including insufficient oversight of non-financial industries including real estate and gaming.
The Katmandu Post was informed by the secretary for the Prime Minister’s Office that “they have identified the biggest risk in the casinos […] these sectors are poorly regulated and suspicious transactions there are hardly reported”.
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