KATHMANDU, JANUARY 28
Finance Minister Rameshore Prasad Khanal has said that removing Nepal from the Financial Action Task Force (FATF) Gray List is a shared responsibility of all concerned authorities and stakeholders.
Speaking at a programme organized to mark National Anti-Money Laundering Day 2082 BS under the theme "Money Laundering Prevention: Transparency and Fiscal Discipline," the minister said Nepal aims to complete all required reform measures and lay a strong foundation for exiting the Gray List within a year. He expressed confidence that the reform process could be completed by the end of 2026.
Khanal said the government's economic reforms are not driven by external pressure but are intended to strengthen transparency, good governance and corruption-free institutions. He noted that lower foreign investment inflows reflect weak confidence in Nepal's financial system and stressed the need for reforms to create an investment-friendly environment.
The finance minister also emphasized the need for more effective investigation and prosecution of money laundering cases, calling for strong evidence-based cases and timely seizure of illicit assets. He raised concerns over transparency in both the financial and capital markets, reiterating that the ceiling on cash transactions would remain unchanged despite private sector concerns.
Since January 15, corporate transactions exceeding Rs 500,000 have been required to go through the banking system, effectively limiting cash-based dealings.
Also speaking at the programme, Minister for Law, Justice and Parliamentary Affairs Anil Kumar Sinha said the current situation presents both a challenge and an opportunity for reform. He said an action plan has been formulated to remove Nepal from the Gray List within a year and called for collective efforts to ensure its effective implementation.
Attorney General Sabita Bhandari said Nepal has made clear international commitments to combat money laundering and has given high priority to the formulation and implementation of relevant laws. She stressed the need for risk-based monitoring and regulation in line with FATF standards, noting that traditional investigation methods are inadequate. She said her office is undertaking required actions to support Nepal's removal from the Gray List.
Nepal Rastra Bank Deputy Governor Bom Bahadur Mishra warned that remaining on the Gray List could lead international financial institutions to tighten transactions with Nepal, increasing remittance costs and potentially causing broader economic and social challenges. He said the Gray List could also be viewed internationally as a weakness in controlling financial crimes.
Similarly, Gajendra Kumar Thakur, Director General of the Department of Money Laundering Investigation, said eliminating money laundering is not the responsibility of a single agency. He said more than 50 government agencies and over 80,000 reporting and indicator institutions are involved in the sector.
Thakur said illegal transactions and potential terrorist financing could account for three to five percent of Nepal's GDP, noting that the country's largely cash-based economy, weak enforcement, limited skilled human resources and technological gaps pose major challenges. He said risks are particularly high in real estate and gold and silver transactions, calling for stronger risk-based regulation, legal reforms, enhanced inter-agency coordination, expanded international cooperation and improved monitoring of the digital economy.
(With inputs from RSS)
