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🇳🇵 Nepal /Crime & Justice

APG warns Nepal over weak anti-money laundering progress, flags risk of further downgrade

From Kathmandu Post · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • A delegation from the Asia/Pacific Group on Money Laundering (APG) has warned Nepal that insufficient progress in combating money laundering could lead to a further downgrade from the FATF grey list.
  • The APG delegation noted limited progress on Nepal's action plan, particularly in regulation, investigation, and prosecution across various sectors including banking, cooperatives, and real estate.
  • Officials expressed dissatisfaction with Nepal's implementation and reporting of progress, urging intensified efforts to meet the action plan's timeline.

The recent visit by a delegation from the Asia/Pacific Group on Money Laundering (APG) has cast a shadow over Nepal's efforts to improve its financial transparency and escape the FATF's grey list. While the delegation acknowledged Nepal's commitment, their assessment, as reported by officials familiar with the meetings, indicates a stark reality: progress has been alarmingly limited.

They are dissatisfied not only with implementation but also Nepal’s inability to properly report the progress already made.

— an official involved in the meetingsDescribing the APG delegation's assessment of Nepal's progress on its anti-money laundering action plan.

This situation is particularly concerning for Nepal, as being placed on the grey list already impacts international financial relations and investor confidence. The APG's warning about a potential blacklist is a serious one, threatening to isolate the country further economically. The dissatisfaction expressed by the APG, not just with the pace of implementation but also with Nepal's ability to accurately report its achievements, points to deeper systemic issues within the country's financial regulatory framework.

The APG also appears dissatisfied with progress in regulation, investigation and prosecution related to the banking and financial sector, cooperatives regulation, banking offences, real estate transactions, precious metals trading, corruption, tax evasion, human trafficking, environmental and wildlife crimes, and money laundering through shell companies.

— an official involved in the meetingsDetailing the specific areas where the APG found Nepal lacking.

From Kathmandu Post's perspective, this serves as a critical wake-up call. The failure to adequately address shortcomings in areas like banking regulation, cooperative oversight, and the prosecution of financial crimes, including money laundering through shell companies and human trafficking, highlights a significant gap between stated intentions and on-the-ground execution. The urgency now is for the government to not only intensify efforts but also to ensure genuine, measurable improvements that satisfy international standards, lest Nepal face even more severe international repercussions.

Officials said the APG acknowledged Nepal’s efforts to exit the grey list but stressed that the measures taken so far were inadequate and had not produced sufficiently effective results.

— officials present during the meetingsSummarizing the APG's overall feedback on Nepal's efforts.
DistantNews Editorial

Originally published by Kathmandu Post in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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