Govt told to control informal money transfers

KATHMANDU, Sept 18: An evaluation team of Asia Pacific Group on Money Laundering (APGML) has advised the government to take strong steps to control informal money transfers, hundis, as it has threatened to portray Nepal as one of the vulnerable countries on money laundering in the region.

The team has also raised serious concerns over poor state of government machinery to control financial crime and suggested the government to do the needful in building the capacity of the financial and crime regulators.
It has further asked Nepal to speed up formulation of appropriate policies and comply with its commitment to ratify crucial international conventions on controlling the financial crime.

The APGML team had visited 42 government, public and private sector entities, including Department of Revenue Investigation and Nepal Police, to evaluate the status and capacity of Nepal to fight money laundering and possible transfer of money to terrorist organizations.

The team is scheduled to submit its report in a month, but on Friday it shared its major findings and concerns to the top Finance Ministry officials.

During the presentation, the team mainly expressed surprise over the huge gap in government´s commitment to control money laundering and private sector´s resistance to it. It also pinpointed the failure of the government in formulating appropriate policy and legislation, despite its international commitment to do so about a decade ago.

Going by the commitment, Nepal needs to rectify international conventions against corruption, organized crime and financial crime. It also requires the government to put in place numerous policies and regulations to control money laundering.

But the government has lagged behind in complying with its commitments. And the private sector too has been opposing steps taken by the government to track movement of money in the financial system.

“There seems to be a lack of trust among the private sector and the government. Nepal should work to end this situation and put in place new laws and policies at the earliest to bolster its commitment to fight financial crimes,” the team said in the presentation.

Likewise, the team also raised concerns over low capacity, technological support and resources of crucial government agencies to deal with the networks of global financial crimes.

Department of Revenue Investigation, Nepal Rastra Bank and Nepal Police are the key institutions entrusted to control illicit transfer of money to and from the country and fight international financial crimes.

The team, however, has noted that these institutions are reeling under the lack of expertise, technological support and capacity. It has strongly suggested the government to adopt new technology, train human resources and build their institutional capacity of those agencies.

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