Nepal and Laos Added to FATF Grey List Amid Political Unrest and Calls for Reform

Nepal has re-entered the FATF grey list, prompting demands for Prime Minister KP Sharma Oli’s resignation due to the government’s failure to address anti-money laundering deficiencies. The FATF warned of potential sanctions if issues persist for two years. Concurrently, the Philippines has been removed from the grey list, while Laos shares Nepal’s new status. Lawmaker Arjun Narshingh KC has proposed demonetizing high-denomination banknotes to combat illicit activities.

Nepal’s recent inclusion on the Financial Action Task Force (FATF) grey list has raised significant political tensions, particularly with the opposition party, CPN-Maoist Centre, demanding the resignation of Prime Minister KP Sharma Oli. This marks a second occurrence for Nepal on the grey list, which highlights countries with shortcomings in anti-money laundering and counter-terrorism financing measures, following a previous listing from 2008 to 2014.

During a recent session in the House of Representatives, opposition MP Madhav Sapkota criticized the governing body’s inability to avert this designation, insisting on the Prime Minister’s resignation. The FATF’s decision, made during its plenary meeting in Paris from February 17–21, was attributed to Nepal’s failure to fully implement essential structural, legal, and policy reforms necessary to combat financial misconduct.

Should Nepal remain non-compliant over the next two years, it could face severe international transaction limitations and sanctions. In light of this situation, Nepali Congress lawmaker Arjun Narshingh KC proposed the demonetization of NPR 500 and 1000 banknotes as a means of curtailing illicit financial operations, advocating for parliamentary discussions and corruption investigations to preserve Nepal’s international credibility.

Simultaneously, it is noted that the Philippines has successfully been removed from the FATF grey list, contrasting with Nepal and Laos, which have newly joined. This development is likely disappointing for South Africa, which had sought the removal of its own designation. Furthermore, it remains that Russia’s suspension from the organization continues post its invasion of Ukraine.

In summary, Nepal faces considerable political unrest following its re-listing on the FATF grey list, with demands for governmental accountability. The international body highlighted significant deficiencies in Nepal’s anti-financial crime frameworks, resulting in potential repercussions if issues remain unaddressed. This situation underscores the urgent need for reform to restore Nepal’s standing in the global financial community.

Original Source: resonantnews.com