Anti-Money Laundering: Officials above secy level to face greater scrutiny
KATHMANDU, MAR 07 -
With the government set to amend the Anti-money Laundering Act 2008, officials above the secretary level will face greater scrutiny in their financial transactions. The government is amending the AML Act 2008 in line with the recommendation of Financial Action Task Force (FATF), the global anti- money laundering body.
The FATF’s revised recommendation in February 2012 had urged for enhanced customer due diligence of politically exposed persons (PEPs) who may represent higher risks of corruption by virtue of the position they hold. “In a draft ordinance, we have defined PEPs as persons holding position above secretary,” said Tek Prasad Dhugana, joint secretary at the Ministry of Law and Justice.
As per the order of precedence recently prepared by the government, President, Vice-president, prime minister, chief justice, chairman of Parliament, ministers, lawmakers, Army chief, chief of constitutional bodies, vice-chairman of National Planning Commission, Nepal Rastra Bank governor and vice-chancellors of universities rank above the secretary level.
The government was forced to bring these officials under greater scrunity in the wake of the new FATF recommendation called for enhanced due diligence of domestic PEPs along with PEPs from international organisations and their families and close associates.
Having made the decision, the Finance Ministry has sent a draft to the Law Ministry for necessary changes in language. The government has to introduce the amended Act before FATF’s next plenary in June. Failure to do so will result in Nepal being blacklisted, the global anti- money laundering body has warned.
Besides bringing PEPs under greater scrutiny, the proposed ordinance has also provisioned for customer due diligence for wire transfers. “In the draft, we have proposed to make the customer due diligence (CDD) a requirement in case the amount being electronically transferred is more than Rs 75,000,” said Dhungana. “Any firm engaged in electronic transfer of such amount has maintain records of a sender, his account number, date of birth and name of beneficiary.”
Likewise, the proposed ordinance has also made a provision which requires anybody holding foreign currencies and precious metals exceeding certain amount to declare that to the concerned authorities. “Otherwise, the customs can confiscate such cash and precious goods to be deposited in the state coffers,” said Dhungana, one of drafters of the ordinance.
He said that they have fixed the amount of foreign exchange to be self-declared. “We have made a provision that the amount can be fixed by the NRB in consultation with the Finance Ministry,” he added.
The proposed ordinance has also made a provision that the Foreign Ministry should inform about terrorists and terrorist organisations declared by the United Nations Security Council to the country to prevent their investment and flow of money inside the country.
Dhungana said that they incorporated such provisions in the draft after the FATF made it national obligation to keep a close eye on such persons and organisations.
The proposed ordinance will also define predicate offenses of money laundering as crime. Predicate offense means those activities that would lead to money laundering , such as corruption, tax dodging, organised crimes and human trafficking. “Although the existing Act has also covered various crimes as predicate offenses, there is not a full list of crimes defined as predicate offense the FATF has included in the existing Act,” said Dhungana. According to the FATF, predicate offenses include participation in an organised criminal group and racketeering; terrorism, including terrorist financing; trafficking in human beings and migrant smuggling and illicit trafficking in narcotic drugs.
Source: The Kathmandu Post
