Nepal is facing the risk of being greylisted by the Global Anti-terrorism body, the Financial Action Task Force (FATF). The trouble is due to several deficiencies in legislation and enforcement of the country’s laws related to Money Laundering and terror Financing. According to details provided by the Kathmandu Post, Nepal is struggling to address the issues in their laws so that the government can bring the regulations into complete compliance.
So far, the nation has recognized 15 weak laws which could lead to the greylisting of the country. Further, as per information, the greylisting, as mentioned earlier, could damage Nepal’s economy. The nation is already struggling and heavily reliant on foreign Aid, imports and remittances. In such a situation, greylisting from the FATF could lead to further issues, like the lack of trade opportunities and a downgrade of global ratings.
In such a situation, the already shrinking economy of Nepal can land in further trouble. According to the report of Kathmandu Post, Asia Pacific Group on Money Laundering (APG), a regional anti-money laundering body that functions similarly to the Paris Based organization FATF, recently visited Nepal. The members of the regional group were in Nepal for two weeks. The trip aimed to assess Nepal’s response to money laundering and terror financing.
The APG officials have stated that they plan to present the findings by December 16 in their evaluation report. They added that the information puts Nepal in a vulnerable position, where they risk being grey-listed if not directly blacklisted.
Here, it is worth noticing that Nepal was previously on the Global Anti Terror Body’s greylist for six years, spanning 2008-2014. The nation was previously able to make several legislative changes and advancements and come out of the greylist. Presently, Nepal needs to amend 15 legislations to become compatible with the FATF standards of money laundering and terror funding laws.
A Senior official of Nepal Rastra Bank has offered their views on the problem faced by the nation. He acknowledged that the risk of being greylisted is real as the government is dealing with deficiencies in legislation and execution of the money laundering and terror funding laws.
Reportedly, the Blacklisting of an economy by the FATF denotes the nation for being at high risk of money laundering and terror funding and urges immediate action.
Meanwhile, the FATF uses the term greylist to denote a nation with strategic deficiencies in its regime to fight money laundering and terror funding.
Greylisting of a nation does not necessitate sanctions. However, after the FATF informs international banking institutions that there is increased risk in doing business with these nations.
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