Political Fallout in Nepal Following FATF Grey List Inclusion
Nepal’s addition to the FATF grey list has led to political unrest, with the opposition demanding Prime Minister KP Sharma Oli’s resignation. The FATF cited Nepal’s insufficient progress in combating financial crimes as the reason for the designation. Lawmakers proposed measures such as demonetizing high-value banknotes to address illicit financial activities. Meanwhile, the Philippines was removed from the list, while Laos joined along with Nepal.
The recent inclusion of Nepal on the Financial Action Task Force (FATF) grey list has triggered political upheaval, with the opposition party, CPN-Maoist Centre, calling for Prime Minister KP Sharma Oli’s resignation. This situation marks Nepal’s second appearance on the grey list, initially being listed from 2008 to 2014 due to deficiencies in its anti-money laundering and counter-terrorism financing measures.
During the House of Representatives session, opposition MP Madhav Sapkota criticized the government’s inability to avert this designation, emphasizing the importance of accountability. The FATF reached its decision during its plenary meeting in Paris from February 17 to 21, attributing it to Nepal’s failure to implement essential reforms necessary to combat financial crimes effectively. If these issues remain unresolved within two years, Nepal could face more severe international sanctions and restrictions.
In response, Nepali Congress lawmaker Arjun Narshingh KC suggested the demonetization of NPR 500 and 1000 banknotes as a strategy to mitigate illicit financial transactions. He underscored the urgency of conducting parliamentary discussions and investigations into corruption to enhance Nepal’s international standing and integrity.
In the broader context, the recent FATF update revealed that while the Philippines has been removed from the grey list, Nepal and Laos have been newly added. This development is particularly disappointing for South Africa, which sought to escape similar designation. Furthermore, the FATF has maintained Russia’s suspended membership due to the ongoing conflict stemming from its invasion of Ukraine.
In conclusion, Nepal’s reinstatement on the FATF grey list has resulted in political discord and calls for leadership accountability, notably from the CPN-Maoist Centre. The FATF’s decision highlights significant deficiencies in Nepal’s anti-money laundering efforts and indicates potential consequences if remedial measures are not undertaken within the stipulated timeframe. Moreover, developments in the FATF’s categorization of other countries illustrate a shifting landscape regarding international financial compliance.
Original Source: resonantnews.com
