Nepal has no options but to endorse acts
KATHMANDU, JUN 10 -
With just nine days left for the plenary of the Financial Action Task Force (FATF), Nepal is running out of time to endorse three crucial bills on anti-money laundering to avoid being blacklisted by FATF.
What has made Nepal’s position weaker this time is that the country is unlikely to get the same support that it got from the diplomatic community during FATF’s Paris plenary if it failed to endorse the three bills — Mutual Legal Assistance, Organised Crime and Extradition Treaty.
Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said the diplomatic offices, which backed Nepal’s efforts
to avoid FATF blacklisting last time, have clearly said that Nepal has to find a solution itself in the next FATF plenary scheduled to be held in Rome, Italy, from June 18 to 24.
“We requested our governments to lobby in Nepal’s favour last time considering the country’s critical political situation. Now, you have to work yourself,” Khatiwada quoted diplomats saying. Khatiwada, however, didn’t divulge names of the diplomatic offices that conveyed such messages.
Prime Minister Baburam Bhattarai had reached to ambassadors of the G7 and other key countries to explain Nepal’s efforts to comply with anti-money laundering measures during last FATF plenary held in Paris on February 2012.
Not only have the diplomatic communities, even the Financial Information Units (FIU) of most of the countries, said they can no longer lobby in favour of Nepal in Italy. “Around 20 of the three dozen FIUs to whom we had requested last time have said they can no longer help Nepal,” said Dharmaraj Sapkota, chief of FIU at NRB.
This means Nepal has no other alternatives to passing the three bills as soon as possible. Nepal had committed to introduce the acts within 2010, but has so far failed to do so. Nepal was also warned of possible blacklisting during the recent meeting of the regional review group of FATF’s International Cooperation Review Group (ICRG) in New Delhi.
If blacklisted, Nepal’s financial system will lose its credibility as FATF has warned its member countries to take stringent measures against countries failing to address their anti-money laundering deficiencies. Among some consequences include non-acceptance of the letters of credit by foreign banks. Even if foreign banks hold transactions with Nepali banks, the business will be costly and Nepal will have to struggle to get foreign aid and investment, officials say.
In the absence of a parliament, the government will have to bring the acts through ordinance. Given the Maoist hardliner faction against the bills, bringing the acts through ordinance would not be an easy task.
Finance Secretary Krishna Hari Baskota indicated that the government is most likely to bring the acts through ordinance. “As Nepal will be in a serious trouble if it fails to bring the three acts, I have been lobbying with top government officials, including the Prime Minister, for bringing the acts as any cost,” said Baskota.
Source: The Kathmandu Post
