Thinking About Money Laundering in Nepal? 4 Things Why Nepal Government Must Take Action!

Money Laundering in Nepal:- Money laundering is the big crime act in Nepal and whoever involves in this scene will be behind the bars. Actually, money laundering refers to the process of hiding the money and profit from any criminal activities.

It simply means to hide the ownership of that money and assets which come as an illegal way and now, you are trying to make it legal through various processes and procedures.

It will totally dismiss the name of the true owner of that money which comes from the crime scene and keep it safe for the future to make it white. It’s a kind of dirty asset and profit and there are thousands of examples in Nepal these days where everyone wants to wash their hand.

Through this process, anyone can change the source of money especially, politician plays a big role to do these work.

We can see news about corruption and smugglings of illegal substances within the country and outside the country through different means of transportation. Politicians and big businessmen used this type of trick a lot to hide the source of black money and try to change it in white through various processes.

Well, we are talking about Nepal than each year lots of corruption cases we can listen and see by our politicians by using their power. Money laundering in Nepal is not new by the way, if you view the history than from the early days, it is an exit. You cannot imagine its impact on the economy of a country and in addition, developing countries like Nepal.

Who has lots of black and illegal money than he or she will surely try to make it white so, they can use it legally inside the country? Money laundering simply shows your income generate from legal sources so that it won’t come under the investigation of the crime department.

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There are many sources related to it like economic scams, drug dealing, credit card fraud, and other many more illegal things that are strongly prohibitive in Nepal. Nepal will be soon in the list of the most corrupt politician in the world because the half budget of the country goes into their pocket and I am not talking about the whole system.

Money laundering is just like an insect that eats the whole county economy from inside and acts as nothing happens. There are various anti departments also available in Nepal for money laundering and they are working well by catching many criminals with live activities.

Nowadays, it is not big and new news for people to listen to the illegal crime happening in every part of the country. For example, if a government officer earns Rs 30000 per month than after his assets calculate there will be more than crore in their bank balance.

It is totally doubtable and the government must take action in this direct corruption of high position people. There are many steps and procedure to convert your black money into white and every people who want to do that goes through this process.

Money Laundering in Nepal
Money Laundering in Nepal

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There are some stages in money laundering because you cannot make it legal until some procedure won’t apply in it but it is considered as a crime against the country’s economic system.

When we are talking about it than the first step is the placement and talking about placement than it is a transfer of money from the danger zone to a safe place. Whenever any corrupted money is handed in people’s hands than his first step is to send that money in some safe place.

It will help those criminals to keep themselves out of the situation of investigation from the anti-corruption department. They will transfer that illegal money in less suspicious places so, nobody ever can think of that place for investigation.

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So, all this process is the first step of money laundering and also known as placement. Well, after money is being transferred to a foreign land or anywhere safe place than the second step start for it which we called layering. In layering, those criminals will transfer their money to the bank account of their relatives and close friends.

It is very necessary to make an entry in a bank account of that money in a small account which will not come in the eyes of anyone. If it is too much large amount than criminal will divide that money and save in financial institution through others account in various country.

Now, they will show by taking a loan from that money and again deposited into the same bank which seems it as a legal transaction. This is known as the layering of money laundering which is quite popular in Nepal as well and we know that corrupted money used to transfer into Swiss banks.

Finally, there is the last process left to make it white and used in a legal way anywhere in the world and that process is integration. So, in integration, the statement is clear to that money as totally fine to use in the legal market and now it becomes white.

It is the process where black money comes out as white and it also shows it very easily on its paper. Now, a criminal who has completed the process of money up to integration then they can use it formally without any law restriction.  

After the money becomes white then neither any department neither officer nor police can do anything about their money and them. Overall, you can understand it as a cycle of making black money into white but with the full process and using ideas and mastermind.

The government each time failed in Nepal to find the location of placement of many smugglers and they get away with that money and important items. Nepal is the historical country and many traffickers of drugs and historical ornament used to sell in the market with lots of money and through this process, they make it legal financial income which helps them to do those criminal activates even more in future.

Department of Money Laundering in Nepal
Department of Money Laundering in Nepal

The government of Nepal most take strong action on these activities and create more techniques to catch them with secrete mission.

Let’s talk about the department of money laundering in Nepal

Nepal has a good department of money laundering investigation or in other words DMLI for checking and supervising this criminal act in Nepal. it also helps to prevent the criminal cases of money laundering in Nepal so that country will be fast forward in economic development.

We know that the root of financial terrorism of Nepal is corruption while passing a budget which becomes super lower when reaching at the edge. This investigation department has its own vision for the country and the society and that is to make free money laundering country and reduce the fear of financing problems.

DMLI plays a vital role in Nepal’s economic state and contributes a lot to take it in another level. It is simple that corruption is everywhere in every country but there are types of corruption like if it will make an impact on the development of country and distribution of budget or just a simple one with little income source for a particular person.

It has an extraordinary mission for our country Nepal to make it strong in the financial sector as well as make it free from any type of money laundering inside the country. They are planning to make a legal financial system that involves the international sector as well and trying to increasing the area of the department.

May be many security systems will be changed and upgrade in order to protect more financial sector and they will implement every rule as soon as possible for money laundering. They are also trying to work with other financial institutes because that is the place where chances of money laundering are as high as possible.

They are even providing their details to everyone so that if any suspicious happen than they can inform DMLI. Money laundering will not stop until people become totally aware of it because everyone tries to earn money from any source even that is the illegal way.

Desire to earn a high amount of money creates corruption and smuggling which hamper both personal life as well as country later. This investigation department is working day and night for the sake of the people and stops many crime scenes as they can.

People these days become so clever to transfer and hide money from the government and also make it white within a month. But we can listen to many news related to these smugglers get caught with 70kg gold in the airport and other many more news so, as far DMLI is also doing better than ever.

Due to the strong security system and tracking device, they are winning the match against money laundering day by day which shows their dedication also. There is too much financial dismiss in our political system and that is the reason any development work never finished in time.

The commission is not only for high post people but people from lower levels also take it to do work in an illegal way. We can find everywhere politics but after DMLI becomes active than crimes are decreasing these days.

Government strategy to fight with money laundering

Now, the government is coming up with various ideas and combating skills to stop money laundering inside the country. There are few provisions which allow our police offers also can investigate these criminal act related to money laundering.

There is always been a fear to the government about blacklist because there are many countries being blacklisted after increasing the case of money laundering and criminal act.

Once your country becomes blacklisted than everything will be slow down like development work, there will be no help and support from the international platform, the tourism sector got destroyed and other many more problems.

Nobody ever wants to visit any blacklisted country due to the danger of other illegal activities inside the country. Various Nepalese experts have given their view upon the blacklist and also suggest that implementation will be the solution to avoid the blacklisted country.

Nepal is trying hard and still, it gets a chance to avoid blacklist and keep a distance from it but as we know, the situation of progress in Nepal may take it into the blacklist. On the other hand, money laundering also becomes the main issue in Nepal which is another problem arising and the government must think of its solution as fast as possible.

The financial action task force which works for the international money laundering problem alert Nepal to increase the level of combat skills and force otherwise there is a high chance to be in the blacklisted country. They show totally unsatisfied with the result of Nepal in money laundering issues and give their review on it to decrease the case sooner.

Now, after that government of Nepal is concerning to implement new techniques and strategies to fight with money laundering, financial terrorism, and smuggling by changing some policies. It also becomes so important as well due to the risk of the blacklist and economic condition of the country.

Taskforce Asia pacific group will review the money laundering and financial sector of Nepal in 2020 and 2021 AD but according to the Nepal money laundering community, it is really so slow progression due to unsystematic policies.

Well, as we are talking about the act in the previous year for money laundering than investigation department cannot interfere in the property of anyone without their permission and strong proof.

This type of law helps criminals to escape easily and hide their black money in a safe place without knowing anyone.

So, the government of Nepal takes a decision and with the help of the investigation of the laundering department, it has changed some law in favor of the country. This new law helps any investigation sector to investigate the accused property and money of anyone who becomes suspicious in the eye of the national investigation department of money laundering.

From this year, they don’t need any permission and strong proof to search the source of anyone’s huge property. This is the best solution as well because if you have a legal source than there will be no problem but difficult for illegal source people.

New policies for money laundering actually refers that if any official government registered a complaint file against anyone then that person or company will be investigated.

These official agencies are Nepal police, department of revenue investigation, foreign employment department, commission investigation authorities, and other many more which can complain file against any money laundering suspicious action to government.

Nepal police get full support and power from the government of Nepal in this strategy for checking and registered file for all criminals involved in money laundering crime.

But for money laundering, police offers need to be qualified enough to handle sources of black money and against any false proof so, the strategy also suggests upgrading the skills of Nepal police according to the importance of the situation.

They will give more information and technique to the Nepal police to coordinate with the department of national money-laundering investigation agencies. Well, CIB as a central investigation bureau will be the main platform for all department agencies to exchange the information they have with each other.

It will be the best way to share information under the perfect control of the law and police department so that it won’t leak as well. The strategy of government used the maximum potential to keep the record of a criminal act in safe hands which we can see the sharing platform of CIB.

It has also stated that if there are any cases that are at high risk and almost have every proof for money laundering than whole agencies will work together to arrest those criminals.

They will also work jointly if any huge alert comes in any cases so that it will be easy for the whole department to take out a solution. According to the act of 2008, only the department of money laundering has permission to act upon money laundering case but after a new strategy, it has amended the previous law.

After the change in the previous law, there is also another change which includes that individual should have only one account in one back and if there is any transactions above 1lakh than it must be done through digital accounting.

This one is very important and plays a vital role to prevent money laundering as well because every transaction through digital account keeps a record and only legal money can transfer through it.

There will be no chance to transfer corrupted and illegal money through it which will be hard for a criminal to physically transfer huge amounts of money in different places. There are many ways like every transaction should be digitalized and can use through the mobile app.

You also need to carry out every state financial transaction by bank account which will be a big help for the government to get information of legal and illegal transfers. Government strategy is planning to form a whole set of process which is related to money laundering in Nepal.

It is also planning to involve all strategies in the public and every training sector. Even the government offers as well need to sign in every contract of property evaluation which is very important for the reputation of the country as well.

The whole strategy will be check and supervise by the prime minister office and the cabinet of government and auditor general will audit all those records and files.

Audit general will keep checking the progress of those departments and agencies with the proper records to combat money laundering. There will be four various types of mechanisms will use by the high-level government minister to prevent the criminal activities related to financing terrorism and money laundering in a country.

All of them are government plans and part of the strategy to keep safe the economic condition of the country. The whole strategy is the responsibility of the various department and every government agency and many investigation bodies of the government will be empowered soon as well.

The Minister of finance states that in the situation of anonymity in the cabinet of the country about roles and key factors of officials. The central bank is the trustful and most important bank in Nepal so; finance minister is planning to bring all remittance related work under this bank.

Nepal rastra bank will supervise all remittance related work of remittance companies, agents, and branches. This will help to control the money balance in-country through the central bank and there will be no chance to do money laundering from the international level.

These days’ people are using remittance to bring and send illegal money from the international market which can be a big problem for the government of Nepal. So it brings a solution with the combination of Nepal rastra bank by handling remittance and its detailed information as well.

Nepal rastra bank will also provide the link of nonresident Nepali Association, the foreign ministry, immigration department, and other official agencies to make people more alert and informed. Government strategy also explains about giving remittance orientation training to every people who wants to go for foreign employment.

Any transaction made through softer will have a good record with every detail so, it becomes mandatory for all financial institutions and banks to keep it in software. The same strategy will be implemented in the security board of a country and other saving financial cooperative to prevent money laundering action in these sectors.

Anyone who does not belong to the financial sector should be strictly watching and monitor their purchase of assets and property. Now, the government becomes super active in the field of money laundering by taking action in every part of the country related to private and official sectors.

Special monitoring is everywhere either in government work or financial work of an individual which decreases the percentage of corruption. Investigation can be done through modern technology like their computer details and property evaluation without knowing them if anyone is strongly suspicious in case of money laundering.

From now won every official and bank work, you need to provide actual identification while registering anything inside the country, and under the suspicious cases, you cannot leave the country as well. There are many cases from remittance where people involved in money laundering so, this is the overall strategy of the government to practically stop money laundering in Nepal.

Financial offenses get protected by the political administration

As we are talking about money laundering in Nepal, it is not effectively implementing in many big financial sectors like transportation and university as you can see in the previous year.

Political parties come to rescues them otherwise they take out some excuses and threats like closing their business permanently. Government just wants to prevent the country from blacklisted so, it only shows interest but never takes any action for them.

Last time as the investigation of the money laundering department publish a report for the federation of transport entrepreneurs to stop the unnecessary protest but they come out by saying that they will shut down the whole transportation system in the country.

Others are medical colleges where they are taking too much money from students and government complaints filed against them in court. They take some excuse and those files were still in freeze condition in the Supreme Court of Nepal which has no result yet.

The government gets terrified when it comes to the huge businesses of the country because they may lose a large amount of tax if those companies and colleges were shut down. But on the other hand, they are doing a crime by taking more fees from students than the government limit and now, they are rejecting the truth of those criminal acts.

There are politicians who take a commission from them and support them in the crime scene with their full power and position. That is also the main reason for money laundering in Nepal which is increasing day by day. Some of the government authorities state that those people who involve in crime scenes are now in a suspicious investigation and their bank account has been freeze.

But all those are just the game of dirty politics where some say that it’s the work of the investigation department of money laundering and we have handed this case to them.

In reality, they all are part of the commission which may be the big reason for the blacklist of Nepal in future days. One of the best examples of it is that in 2075, the national committee of prime minister has handed the report of three medical colleges in the department of investigation of money laundering.

Those colleges have charged three billion money from all student and now they are under the crime act but as soon as they start to refund the money of some student than the whole case got dismissed.

Well, we can assume that from the past year, those colleges have been doing these illegal activities and in the future, they will do it too but the government becomes silent in this case.

They are afraid that they will shut down their business than it will be a financial loss for the country but nobody cares about the people inside the country. This has been the main problem of a country that they made proper laws but never take put it practically and equally inside the country.

One of the prime subject and example of money laundering in about famous businessmen who has transfer lots of money in his bank account and clams that were a foreign investor.

He represents that money by showing the source as foreign investing through various international stakeholder and government become so silent in this case. Even, the department of money laundering investigation becomes numb for 5 years without checking the reality and the information is true or not.

These types of excuses are still available in Nepal and if you are well rich to give more commission to politics than the case will never come out in social media as well. There are still many cases of suspicious money laundering are pending in government files and nobody ever tries to fix it neither the government nor any department of investigation.

Many years ago CIJ as a center for investigative journalism and ICIJ investigate the whole cases of money laundering in Nepal where they find evidence of suspicious work of various businessmen in Nepal by establishing a business in a foreign country.

they also got that various businessmen have an account in Swiss bank which gives direction to something illegal activities but as a reply from the money laundering department of investigation, they are still working in it.

They have submitted cases and order businessmen to show the details of their property and document the source of money but they are not replying enough things. The whole scenario seemed like a preplan of everyone and they are just trying to provide protection for many people.

The government really needs strong determination and action to solve the problem of money laundering in Nepal from its root. Actually the department of money laundering needs to focus even more and investigate as many as cases they have so it will help to prevent our country from Nepal from the blacklisted country list as well.

May be within 1 year Nepal government should ready itself to show the reports and solution strategy of money laundering. Last year as well, 48 years old men get caught for financial terrorism in Nepal, and the investigation department has a case crime file against individuals.

According to the government, every transaction will be held through digital tools and from the bank which somehow decreases money laundering. It is also the responsibility of the government and investigation department to give pressure to the Supreme Court for a fast decision.

There are more than hundreds and thousands of cases are still on and it is taking a long time to solve the case of money laundering. Fake statement and excuses are the main problems lie in the surface of money laundering in Nepal.

Especially, businessmen get it easily because it will be easy for them to show the income as foreign investors and departments of money laundering will never investigate its real source.

There is no any well research sector and manpower from the side of the government to check the property evaluation at the international level which makes it easy for every businessman if they are importing money illegally inside the country till now.

Anti-money laundering efforts

Due to the lack of digital payment through banks and other means, Nepal becomes one of the top money-laundering countries in the world. Its economical condition which is totally unstable lacks long-run government and its vision on development work, totally weak bureaucracy.

Open border with India and other many more defaults in the system. The government of Nepal has never been a healthy and stable government till now which directly affects the country’s economic and infrastructural development.

Nepal is now under the watch list of FATF which is an international anti-money laundering task force and takes control over all countries of criminal activities.

Due to the fear of blacklisted, Nepal made law on money laundering under great pressure but change some of the strategies in 2014 AD. After certain changes in law and provisions on anti-money laundering like you cannot open two accounts of the same person in a particular bank.

Even bankers and money laundering departments of investigation can report any suspicious transaction through banks which also helps them to keep eye on high-risk transactions. The criminal source of money is increasing day by day in Nepal which creates large numbers of problems and fear to be in a blacklist.

The government is preparing to take control in every financial sector of Nepal like remittance and banking system. It is also called the anti-money laundering process because in this way there is totally less chance to involve in money laundering by anyone.

Well, the government try to handwork the source of importing and exporting things and cash in the hand of Nepal rastra bank which will keep every record.

News rules and the law has given the power to the department of investigation on any banking transaction related to incoming cash and bank relation with sources. 

Now, the united nation has launched a software name goAML which help every investigation department to know the source of financing terrorism and money laundering in all over the world.

Many industries and big business has held up to 10% of the total economy of the country and that is also the main reason for the government to hesitate for investigation for big businessmen.

Money laundering is not only the problem of Nepal but the whole world is threatened by it which is also the major reason for financial destruction.  Various international departments come forward in order to stop money laundering worldwide and they are doing their best to decrease it from every country.

Well, after Nepal has changed the format and law of money laundering recently than, it comes as a strong strategy and sustainable solution on money laundering. Nepal is also suffered from much financial terrorism and economic unbalance and it will take time to overcome everything in future days.

Money laundering really shows the state of our national security and also motivates us to make it more strong show that in future such crime will never happen again.

As we are talking about the problem than the same goes for banks that don’t have advance and strong technology to keep records of many transactions. There was no software of international level and other necessary digital equipment to track the false money and their placement as well.

To implement an anti-money laundering system, one needs to totally focus on the security of the country like an open border with India and other inside security problems. The main problem that comes up with money laundering is in law as a low rate of punishment for the criminal.

Well, after they found guilty court will provide some charge and some minimum year of jail than again they will start their action after relief. Punishment should be stronger than till now than only they will realize their crime so, the government still needs to change some law in order to stop the crime.

Anti-money laundering has to face other challenges like political pressure and different protection from the government. Yes, of course, there are other parties that are loyal to the country and try to save it from blacklist but we cannot deny the fact to have an opposite party to protect crime as well.

Money laundering is walking just like a freelancer because there are many powerful political leaders to protect it from the crime scene and there will be easy to do the placement.

There are more than 10 bodies created by the government of Nepal to control money laundering but due to the lack of coordination and internal political conflict in Nepal, it becomes too hard to work together.

May be lack of unity among these governmental bodies create many unnecessary arguments and anti-money laundering cannot implement properly.

Well, overall as we think about the system of government of Nepal in money laundering than it is not a satisfying result till now. There is always been a lack of good guidance and sustainable decision which bring totally down our economic system.

Fully exposing the individual of the crime scene and with strong punishment may bring some good chances in the money laundering issue otherwise it will keep remaining like this forever.

Political parties inside the country need to work under government instruction in a faithful manner so that national problems settle down at first. The national issue most be our main agenda and we need to work for it before anything inside the country so, money laundering needs to be clear from roots.

The most affected part of the nation by financial terrorism and money laundering is the budgets of Nepal where most of the money gets into commission. There are still many projects of government which are pending but the money for that work is already finished.

There are many examples that prove the weakness of the government and its actions for the infrastructure of work. Implementation of anti-money laundering needs an enormous amount of focus and hard-working people in the parties rather than just talking one.

Now, it becomes a challenge for the government of Nepal to reduce the rate of money laundering in Nepal otherwise there is a high chance to be in a blacklist. Money laundering needs a good solution and decision than only our country will be free from corruption and the black market.

Related terms and post

  • sampatti suddhikaran bibhag
  • anti money laundering act Nepal
  • trade based money laundering in Nepal
  • meaning of anti money laundering in Nepal
  • money laundering in Nepal 2077

Author: Abhishek Ojha

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Jitendra Sahayogee

I am Jitendra Sahayogee, a writer of 12 Nepali literature books, film director of Maithili film & Nepali short movies, photographer, founder of the media house, designer of some websites and writer & editor of some blogs, has expert knowledge & experiences of Nepalese society, culture, tourist places, travels, business, literature, movies, festivals, celebrations.

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