Crime ordinance gets President stamp

KATHMANDU, FEB 16 -

President Ram Baran Yadav on Friday endorsed the ordinance on Organised Crime which is expected to help the country avoid blacklisting by the Financial Action Task Force ( FATF ), the global anti-money laundering body.

The President endorsed the ordinance as per the country’s commitment to the international community and the national interest, according to a statement issued by the President’s office.

Although the government had promised to introduce the Act within 2010, it had been failing to do so due to its other priorities, and difference of opinion about the ordinance among the ruling political parties.

“With the endorsement of the ordinance , we have fulfilled our promises to the international community. It should definitely help Nepal avoid blacklisting by FATF ,” said Bhesh Raj Sharma, secretary at the Ministry of Law and Justice.

A blacklisting would mean Nepali financial institutions would lose their credibility in the international arena, and foreign banks may not honour letters of credit issued by them. It would also diminish Nepal’s prospects of getting foreign aid and investment.

Sharma said the endorsement of the ordinance was necessary even for the domestic purpose as the country does not have a single Act to address organised crimes. After Nepal endorsed the Convention against Organised Crime last year, Nepal was in urgent need for introducing the Act in line with the convention.

Government officials had been emphasising the need for endorsing the ordinance before the FATF ’s plenary scheduled to be held on February 18-24. The plenary is responsible for blacklisting countries for their anti-money laundering and combating financing of terrorism (AML/CFT) deficiencies.

Prime Minister Baburam Bhattarai, Finance Minister Barsaman Pun and senior officials of the Nepal Rastra Bank (NRB), finance and law ministries had also asked the President to endorse the ordinance forwarded by the government about a month ago. Government officials were also lobbying with foreign diplomats to avoid blacklisting.

Given Nepali officials being questioned about the country’s failure to fulfil its past commitments, the President’s endorsement of the ordinance has come as a relief for the officials scheduled to visit Paris to take part in the plenary. The Nepali team will be led by NRB Deputy Governor Maha Prasad Adhikari in the Paris plenary.

Despite few progresses in other areas, FATF has been insisting that Nepal should have the laws that criminalise money laundering and terrorist financing adequately. Nepal was warned of severe consequences during a face-to-face between Nepali officials and officials of FATF ’s Regional Review Group (RRG) in Hong Kong on Jan 14-18.

Making an assessment of Nepal, FATF has mentioned the country’s deficiencies in effectively criminalising money laundering and terrorist financing and has also mentioned that Nepal has failed to adopt adequate measures to identify and freeze terrorist assets and confiscate them.

Other deficiencies pointed out by FATF are the failure to enact and implement appropriate mutual legal assistance legislation, ensure a fully operational and effectively functioning financial information unit and establish adequate suspicious transaction reporting obligations.

Source: The Kathmandu Post