FATF gives Nepal till June to avoid blacklisting

KATHMANDU, Feb 23:

Nepal faces blacklisting by the Financial Action Task Force (FATF) if Nepal failed to come up with an amended Anti Money Laundering (AML) law that criminalizes money laundering and terrorist financing.

Baikuntha Aryal, joint secretary at the Ministry of Finance (MoF), said a plenary of International Cooperation Review Group (ICRG) under the FATF that concluded on Friday in Paris issued strong warning to put Nepal under ´Public Statement´ better known as ´black-listing´ if Nepal failed to include sufficient provisions against money laundering and terrorist financing in AML act by June 2013. Nepal now in FATF´s ´gray´ list meaning Nepal is in the process of enacting necessary laws seriously against money laundering.

ICRG´s four-day meeting concluded Friday in Paris reviewing the status of implementation of AML in FATF member countries. The meeting decided to put Nepal under status-quo (gray position) setting the June deadline to endorse the amended AML.

"In the absence of parliament, we have no option other than to make second amendment to the AML through ordinance by June 2013 to avoid blacklisting," Aryal told Republica. The proposed second amendment of the act, which is being given final touches by the Ministry of Finance, has reportedly incorporated sufficient measures to criminalize money laundering and terrorist financing.

Issuing strong warning to Nepal on Thursday, FATF -- the international watchdog on anti-money laundering -- gave June 2013 deadline to pass the second amendment of the Anti-money Laundering Act to avoid blacklisting.

If blacklisted Nepali banks will not be able to do international banking transactions.

President Ram Baran Yadav last week had endorsed an ordinance against organized crime forwarded by the government to demonstrate Nepal´s commitment to international community to fight against financing on criminal activities.

Though Nepal has already endorsed two of the three bills -- Extradition Bill and Mutual Cooperation Bill -- the third one, bill against organized crime, had failed to get parliament´s approval due to strong opposition from the Mohan Baidya-led faction of the UCPN (Maoist).

Source: Republica