Kathmandu - Nepal has been re-listed in the Financial Action Task Force (FATF) grey list due to inadequate progress in combating money laundering and terrorist financing. This marks the country’s return to the grey list, having previously faced similar scrutiny between 2008 and 2014.
The FATF’s decision reflects concerns over entrenched fiscal mismanagement, political corruption, and a lack of robust enforcement mechanisms. Political meddling in agencies responsible for tackling financial crimes, such as the Department of Anti-Money Laundering and the Commission for Investigation of Abuse of Authority, has hindered effective action. High-profile corruption cases remain unresolved, with only minor offenders being prosecuted.
To exit the grey list, Nepal must meet FATF’s recommendations, including improving oversight of banks, cooperatives, casinos, and real estate; cracking down on illegal hundi providers; enhancing money laundering investigations; and increasing prosecutions. However, implementation has been delayed due to weak political will and politicized institutions.
Finance Minister Bishnu Paudel has pledged immediate reforms to address FATF concerns. Experts warn that failure to act could damage Nepal's international reputation, deter foreign investment, and undermine economic stability. Ensuring a clean and efficient fiscal sector is crucial not only for global credibility but also for the country's sustainable growth and development.
