Finance Minister Bishnu Paudel placed the blame on the previous administration for Nepal’s inclusion in the FATF grey list.
Nepal’s Finance Minister Bishnu Paudel has assured that the country will be removed from the Financial Action Task Force (FATF) grey list for money laundering and terrorist financing before the stipulated two-year deadline.
Addressing lawmakers during Wednesday’s parliamentary session, Paudel placed the blame on the previous administration for Nepal’s inclusion in the FATF grey list. He emphasised the government’s commitment to completing all necessary reforms within the given timeframe.
“We are under intensive monitoring, commonly known as the grey list. The government is fully committed to fulfilling all required procedures and ensuring Nepal’s removal from the list within the designated period,” Paudel said. “Though this government alone was not responsible for Nepal’s inclusion in the grey list, we will take serious and sincere steps, and the results will speak for themselves.”
“The government is fully committed to fulfilling all required procedures and ensuring Nepal’s removal from the list within the designated period.”
Bishnu Paudel, Finance Minister
The Finance Minister also promised to present a white paper in parliament soon, detailing the government’s strategy for compliance with FATF regulations. He expressed confidence that Nepal’s name would be removed from the list well before the deadline.
This marks the second time Nepal has been placed under FATF’s increased monitoring. The country was previously on the grey list from 2008 to 2014. The latest decision was made during the FATF plenary meeting held in Paris from 17-21 February.
The FATF, a global anti-money laundering watchdog, announced on 21 February that Nepal and Laos had been added to its list of jurisdictions subject to increased monitoring. The grey list, officially termed “jurisdictions under increased monitoring,” includes countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CFT) regimes. However, it also acknowledges that these countries are actively working with the FATF to resolve these issues.
If Nepal fails to meet FATF standards within two years, it risks being blacklisted, which would result in severe restrictions on international financial transactions and increased scrutiny from global financial institutions. The country must demonstrate significant improvements in legislative frameworks, law enforcement, and measures against illicit financial activities to avoid such consequences.
Nepal’s placement on the grey list stems from its failure to fully implement necessary legal, policy, and structural reforms despite some progress. The country was initially given a deadline of October 2024 to meet FATF requirements, following an extension in July 2023. However, FATF determined that Nepal had not sufficiently addressed the outstanding deficiencies by that deadline, leading to its continued placement on the list.
To ensure compliance and expedite Nepal’s removal from the grey list, the government will need to enforce stricter measures to regulate and manage illegally acquired assets. Finance Minister Paudel reiterated that Nepal would not wait until the last moment to act and would work proactively to restore confidence in the country’s financial system.
