Anti-money laundering measures: Govt agencies apathetic

KATHMANU, JUN 15 -

Despite rising fears of Nepal being blacklisted by the Financial Action Task Force (FATF), a global anti-money laundering body, government agencies that are asked to report suspicious transactions to the Financial Information Unit

(FIU) are apathetic towards their responsibility.

The Anti-Money Laundering Act has assigned FIU to keep records of suspicious financial transactions that may be used for money laundering and terrorist financing. The unit under the Nepal Rastra Bank (NRB) also works as the focal point for international relations on anti-money laundering.

Although FIU issued a directive in the name of 12 government agencies and offices under them on April 2010, only one office is regularly reporting, while two others are partially reporting.

Government offices failing to report to FIU are the offices under the Department of Customs, Inland Revenue Department, Department of Transport Management, Department of Commerce, Department of Industries, Department of Education, Department of Immigration, Postal Service Department and Metropolitan cities, Sub-Metropolitan cities and other municipalities.

According to FIU, the Company Registrar’s Office has been reporting regularly, while land revenue offices and cooperatives are reporting partially. “We are repeatedly writing to them to remind them of their responsibilities, but to no avail,” said Dharma Raj Sapkota, chief of FIU.

FIU said major land revenue offices of Kathmandu and Lalitpur are not reporting. As per the FIU directive, the offices are required to report regularly about the details of land transactions worth over Rs 3 million and land and house worth over Rs 5 million in a prescribed format within seven days of transactions. They also have to report suspicious transactions as well.

“From the Kathmandu Valley, only the Bhakatpur office has been reporting regularly. The Chabhil Land Revenue Office recently sent us a detail of suspicious transactions,” said Sapkota. “Only 11 customs offices out of 83, mainly from remote districts, are reporting regularly.”

But recently transferred chief of Dillibazzar Revenue Office Hari Krishna Timilsina claimed that they were reporting regularly.

Offices under the Inland Revenue Department (IRD) are required to report about persons involved in tax evasion through difference means. But Laxman Aryal, deputy director general of IRD, said he is not sure whether offices under IRD are reporting regularly.

As per the FIU directive, customs offices should report about smugglers and those involved in under valuation and their transactions. “Despite frequent reminders through letters, they are not complying with the directions,” said Sapkota, adding that about four dozen cooperatives of the Valley are reporting to FIU on a regular basis.

The major concern for Nepal is the Asia Pacific Group on Money Laundering (APG) has included these deficiencies in its initial mutual evaluation report of Nepal which will be presented at the FATF plenary to be held in Maxico from June 20 to 24 and could be a strong reason for blacklisting Nepal. “In our clarification on the matters raised by the APG report that was sent to us for our views, we have defended our records,” said Sapkota.

Posted on: 2011-06-15 09:21

PRITHVI MAN SHRESTHA, http://www.ekantipur.com/2011/06/15/business/anti-money-laundering-measures/335733.html