Govt steps up effort to pass organised crime ordinance
KATHMANDU, FEB 14 -
With the Financial Action Task Force (FATF) plenary approaching nearer, the government has stepped up its efforts to get the ordinance on Organised Crime endorsed to avoid a possible blacklisting by the global anti-money laundering body.
Finance Minister Barsa Man Pun met President Ram Baran Yadav on Wednesday to request the head of the state to endorse the ordinance, which the government had forwarded about a month ago. During the meeting, Pun reminded the president that the ordinance should be endorsed before the FATF plenary that begins on February 18.
Finance Ministry officials say Nepal has to endorse the ordinance before February 15 to ensure the inclusion of the country’s progress report in the assessment report being prepared by FATF’s Regional Review Group.
The government has also been lobbying with the diplomatic community here to avoid any possible blacklisting. A source said there has been consensus among the government officials to lobby with ‘whoever diplomats they meet in whatever circumstances’.
A close aide of the President said the latter was concerned about possible consequences, but he was still trying to get political consensus before he okays the law.
On Sunday, Prime Minister Baburam Bhattarai had also urged the President to endorse the ordinance. Two weeks ago, senior officials of the Finance Ministry, Law Ministry and Nepal Rastra Bank met the president on the issue.
“We informed him about the possible bad consequences if the ordinance was not endorsed,” said a member of the delegation who met the president. “He looked to be in a dilemma as the opposition parties have asked him not to endorse any ordinance sent by the current government .”
The ordinance on Organised Crime could have been endorsed if the government had sent it to the president last June when the ordinances on Mutual Legal Assistance and Extradition were endorsed. The government had withheld the ordinance at that time due to a division within the ruling political parties.
Meanwhile, if Nepal were to be blacklisted by FATF, the country’s financial institutions would lose their credibility in the international arena, and foreign banks may not honour letters of credit issued by them. Blacklisting will also diminish Nepal’s prospects of getting foreign aid and investment.
The country is currently on the grey list and it could be downgraded to the dark grey list. Being put in the grey list means Nepal is in the process of passing the relevant laws, and it could slide into the dark grey zone if this does not happen on time, said government officials.
“We have to send progress reports on endorsing the ordinance to the regional review group (RRG) of the FATF before the beginning of its meeting scheduled to take place from Feb 18-22,” said Baikuntha Aryal, joint secretary at the Finance Ministry. “The RRG will then incorporate Nepal’s progress report in its assessment report to be presented at the plenary.”
Nepal was warned of possible severe consequences during a face-to-face meeting between Nepali and RRG officials held in Hong Kong from Jan 14-18.
“They have been asking us informally about the progress on the ordinance,” said Aryal. Nepal had promised to endorse the Act on Organised Crime by 2010, but it has not been fulfilled even though two years have passed since the country gave its commitment to the inter- government al anti-money laundering body.
Since the FATF’s last plenary held in June 2012, Nepal has made progress in a number of areas. A proposal for organisational restructuring of the Department of Money Laundering Investigation is awaiting the cabinet’s nod and work to automate the Financial Information Unit at Nepal Rastra Bank is moving ahead. Likewise, the Insurance Board and the Securities Board of Nepal have issued separate anti-money laundering directives to the companies they regulate.
However, officials said that the FATF’s emphasis was on the ordinance on Organised Crime, and it has been repeatedly reminding Nepal that it is yet to criminalise money laundering and terrorist financing effectively.
Making an assessment of Nepal, the FATF has mentioned its deficiency in effectively criminalising money laundering and terrorist financing and has also mentioned it has failed to adopt adequate measures to identify and freeze terrorist assets and confiscate them. Other deficiencies pointed out by the FATF are 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
