Nepal, kathmandu, asia, gaming

Nepal could be at risk of being greylisted by the Financial Action Task Force (FATF), after the body found a number of deficiencies that the nation is struggling to remedy in order to be in compliance with anti-money laundering and terrorism financing standards.

Nepal recently welcomed a delegation of the Asia Pacific Group on Money Laundering to conduct its mutual evaluation, but only progress made until December 16th would be included in the evaluation report.

Nepal had previously been greylisted by the FATF between 2008 and 2014, but amendments to its anti-money laundering law and enactment of further legislation allowed for its removal from the list in 2014.

Currently some 15 laws need to be amended in order for the country to be in line with FATF anti-money laundering standards, with the process commenced but not completed before the term of the nation’s House of Representatives expired.

The preliminary report on the nation by the APG is expected in February, while another visit by the officials to the nation should take place in April, before a final report is issued.

The consequences of a greylisting are the possibility of a future blacklisting, which means the country would lose access to the world’s major banks and lose the majority of its legitimate international trade.

Despite its return to compliance in 2014, Nepal had been close to blacklisting in 2012, but narrowly succeeded avoiding it after last-minute diplomatic negotiations.

According to reports, Nepal’s shortcomings found by APG included lack of adequate supervision in non-financial sectors including the gaming sector, real estate and others.

The secretary for the Prime Minister’s Office told the Katmandu Post that “they have identified the biggest risk in the casinos […] these sectors are poorly regulated and suspicious transactions there are hardly reported”.

APG officials also believe that those involved in money laundering and corruption are rarely prosecuted.