Anti-money laundering, terrorist financing measures:APG chief warns of blacklisting Nepal

KATHMANDU, APR 30 -

The Financial Action Task Force (FATF)—a global anti-money laundering body formed by G-20—may blacklist Nepal if it fails to meet its commitment regarding anti money laundering and terrorist financing by June 23 when FATF’s holds its annual meeting.

This is the warning issued by Asia Pacific Group on Money Laundering (APG) Executive Secretary Gordon Hook during his meeting with Speaker Subas Nembang on Friday. APF is an anti-money laundering body that monitors this region on compliance of anti-money laundering measures. Nepal is an APG member.

As per Nepal’s commitments, it will have to get two international UN conventions—Convention against Transnational Organised Crime and International Convention of the Suppression of Financing of Terrorism—endorsed by Parliament. The Parliament should also pass laws including Anti-Money Laundering Act (First Amendment), Extradition Bill and Bill on Organised Crimes.

Except the Extradition Bill, the other bills have reached Parliament. The Cabinet is yet to endorse the Extradition Bill. FATF has also repeatedly asked Nepal to meet its commitments.

During his meeting with the speaker, Hook said Nepal should pass two bills at least—Mutual Legal Assistance and Anti-Money Laundering Act (First Amendment)—to avoid the possibility of being blacklisted.

According to a government official, who was present at the meeting with the speaker, Hook admitted that he was worried about the possibility of Nepal being blacklisted like North Korea and Iran.

Officials said in case of getting blacklisted, Nepal will find it difficult to get foreign aid from international organisations like the World Bank and International Monetary Fund. Foreign banks may not trust the letters of credit (LC) issued by Nepali banks. This in turn will create difficulties for Nepali businessmen at the international trade level. Businessmen here may have to face harassment at foreign customs offices, with those authorities not allowing Nepali goods to go through the green channel. Nepali nationals may also face hassles while undergoing immigration procedures in other countries. Nepal itself has issued a circular to Nepali banks to be overly cautious while doing business with citizens and agencies of North Korea and Iran.

Nepal had assured both APG and FATF that it would fulfil its commitment within December 2010, but it failed. Speaker Nembang told Hook that Nepal is still unable to endorse the bills and conventions due to political stalemate. He added that he would draw the attention of Prime Minister Jhala Nath Khanal and top political leaders towards the matter.

Hook, who arrived here Thursday, also met Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari and expressed concerns over Nepal’s failure to comply with international norms on money laundering. During the meeting, Adhikari assured Hook that he would do his bit to bring all parties together on this issue.

Last year, FATF had categorised Nepal among 20 countries as seriously deficient in combating money laundering and terrorist financing, alleging that Nepal was posing a risk to the international financial system.



Posted on: 2011-04-30 08:37

http://www.ekantipur.com/2011/04/30/top-story/anti-money-laundering-terrorist-financing-measures/333289.html