Check Money Laundering

While Nepal celebrated National Anti-Money Laundering Day with the slogan ‘Transparency in Financial Activities: Commitment to Anti-Money Laundering,’ it is still likely to be listed as a high-risk country in money laundering and subject to international supervision. The Asia Pacific Group (APG) of the Financial Action Task Force (FATF), the body that monitors money laundering, has stated that Nepal is likely to fall into the gray list. Dozens of laws and regulations have been amended to address legislative deficiencies to control money laundering and terrorist financing. However, it is still a challenge for the government to control this invisible financial crime.  

Money laundering affects the economy in a multiple ways, controlling which and bringing the criminals to legal action is important to ensure good governance and financial integrity. Money laundering undermines the integrity of the financial system, increases corruption and supports organised crimes. So the government should work to control this illegal modus operandi of turning black money into white. Money laundering is an illegal activity in which money earned through illegal activity like drug trafficking, terrorist funding and other criminal activities is disguised to make it appear to be obtained from legal sources. It involves disguising and manipulating the source of illicitly earned money to make it appear to be earned through legal means and using it in legitimate financial systems. 

Nepal government has formulated necessary laws, regulations and structures and taken forward the work of investigation and prosecution of those involved in money laundering. Still it has failed to improve in the number pointed out by the APG of which Nepal is a member. Governor of Nepal Rastra Bank Maha Prasad Adhikari said that Nepal is likely to be listed as a high-risk country in terms of money laundering and come under international monitoring. So the anti-money laundering system must operate effectively to uphold financial integrity by preventing criminally acquired assets from entering the financial system. 

In this regard, Prime Minister KP Sharma Oli has highlighted the need for collaboration among concerned institutions, regulatory bodies, law enforcement agencies, and judicial entities to effectively curb financial crimes. The implementation of laws, policy and regulations, aimed at curbing money-laundering, is not as effective as expected. The government should focus on implementing laws to criminalise money laundering and align national regulations with international standards such as the FATF's recommendations. The government should take strict action against those who acquire wealth through illegal means. The agencies involved in combating money laundering should perform their duties diligently and there should be effective coordination among them.

 Despite massive financial reforms, money laundering through the exploitation of the loopholes in digital platforms has posed significant challenges. Like corruption, money laundering discourages foreign investment, and destabilises financial system and society as a whole. It is necessary to check the malaise to keep orginaised crimes and detrimental activaties at bay.  Ethical business practice discourages such an illegal economic transactions. People lack literacy regarding money laundering and its operation, so the government should conduct awareness-raising programmes on it among the people. Likewise, we need to comply with international agreements and formulate and implement the laws and regulations to prevent this menace.