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Anti-money laundering is an international network of laws, rules and procedures aimed at making money appear legitimate. For centuries, governments and law enforcement agencies have tried to fight crime by chasing money. 

The Financial Action Task Force (FATF), an international organization formed to combat money laundering, has given Nepal a year to avoid the ‘gray list’ in money laundering cases. 

Immediate assessment 

Nepal’s mutual evaluation group, the APG, is reviewing Nepal’s progress in January. 

Based on its report and Nepal’s response, the FATF will decide whether to keep Nepal on its ‘gray list’. As the deadline approaches, the government should not feel like it hastily amended the law. 

The FATF also identifies countries that lack adequate financial infrastructure to prevent corruption and other financial crimes. In the case of Nepal, it has recently become public that the government has proposed to amend the Cooperatives Act, 2074 and the Nepal Rastra Bank Act, 2058, less than a year after amendments. The recent Cabinet meeting passed an ordinance to amend some Nepal Acts related to cooperatives, indicating that the Cooperatives Act and the Nepal Rastra Bank Act may be amended. 

FATF blacklist 

The FATF blacklist is a list of countries that the financial watchdog has declared ‘non-cooperative’ in its efforts to address money laundering and terrorist financing concerns. The list helps identify financial weaknesses that hinder anti-money laundering compliance within an organization. 

Failure to meet the required action points in a timely manner places a country on the FATF blacklist as a ‘country under enhanced monitoring’. The blacklist is an official document based on findings related to financial crime and its prevention. Taking into account regulatory criteria, the FATF can remove a country from its blacklist based on the financial infrastructure of a particular sector. 

Due to the state of illegal activities related to terrorism and nuclear weapons, only a few countries are currently on the FATF blacklist. Looking back, the House of Representatives of Nepal unanimously passed the Money Laundering Bill paving the way for amendments to laws such as the Export-Import (Control) Act-2013, the Ship Registration Act-2027, the Revenue Act-2034, the Tourism Act-2035, the Building Construction Act-2013. Other relevant laws include the Securities Act-2063, Nepal Rastra Bank Act-2058, Human Trafficking and Transportation (Control) Act-2064, Criminal Assets and Equipment (Forfeiture, Control and Confiscation) Act-2070, Prevention of Money Laundering Act-2064, Prevention of Organized Crime Act-2070, 2079, Cooperatives Act-2074, Foreign Investment and Technology Transfer Act-2075 and the Electricity Regulatory Commission Act-2074. Looking back, the plenary session of the FATF held last June pledged to address the weaknesses pointed out by the APG by amending various laws. 

After the House of Representatives approved the Money Laundering Bill, Nepal took a major step to reduce the risk of being graylisted by the Financial Action Task Force (FATF). 

Institutional governance

In this context, the regional organization on money laundering—Asia Pacific Group (APG)—assessed that institutional governance in cooperatives was weak last year and the risk of money laundering was high. 

The government tried to amend the act to control the transactions of cooperatives. Last year, the government proposed to set a limit of personal savings in cooperatives at Rs 2.5m, but it was removed when it was passed by the parliament. Similarly, there is a provision for the regulation, monitoring and supervision of organizations with transactions up to Rs 250m by the local level, up to Rs 500m by the province, and more than Rs 500m by the federal department. 

The Nepal Rastra Bank Act was also amended to include the Nepal Rastra Bank in the financial governance and risk-based supervision of cooperatives with a share capital or annual turnover of more than Rs 500m, at the request of the department. 

Despite the increase in the number of cooperatives that are in trouble due to failure to return the savings of their members, the government has not been able to do anything for security. 

Advisory panel 

The advisory task force formed under a member of the National Planning Commission to solve the problems seen in cooperatives last year also suggested that the monitoring of large-scale cooperatives through Nepal Rastra Bank should be carried out immediately and a regulatory authority should be formed in the long term. The ‘Parliamentary Inquiry Committee on Misuse of Savings by Cooperatives’ formed under the Parliament had also suggested setting limits on savings and loan transactions by cooperatives and forming a regulatory authority. 

It should be recalled that the APG, in its mutual evaluation report, pointed out the need for Nepal to pass an amendment that would give the authority to investigate money laundering to the relevant criminal investigation agency. 

Once adopted, Nepal should accelerate implementation and significantly enhance the capacity of effective competent authorities to carry out new/modified functions.

Nepal and the gray list 

Nepal was on the Gray List from 2008 to 2014. A series of improvements in the anti-money laundering regime, including the Anti-Money Laundering Act, 2008, and other laws, finally removed Nepal from the list in 2014. 

Although FATF does not enforce regulations or impose penalties, its recommendations and guidelines play an important role in helping financial institutions combat money laundering and terrorist financing. 

FATF Gray List Jurisdictions under enhanced monitoring—also known as the FATF Gray List—include countries with “strategic weaknesses” in combating financial crime. Countries on the list represent a high risk of money laundering and terrorist financing; they are required to formally commit to improving the regulatory infrastructure to prevent financial crime. 

These efforts include creating an action plan to address the need for anti-money laundering measures across the country, developing a central regulatory unit that works with other financial institutions and businesses to combat illicit flows of money, and effectively implementing the “anti-money laundering” standards. 

In addition to efforts to effectively implement the “anti-money laundering” standards, graylisted countries are increasingly monitored by the FATF itself or other regional bodies designated by the FATF. 

These bodies report on the country’s progress in meeting anti-money laundering compliance. Although graylisted countries represent a lower risk than the jurisdictions on the blacklist, the World Bank and other financial institutions may impose certain restrictions. 

Like the blacklist of countries graylisted by the FATF, the FATF Gray List is updated regularly to take into account the state of financial crime in a particular country. 

In 2020, the FATF Gray List included around 18 countries. Laundering laws on the legalization of inherited wealth should be softened, and self-declaration of inherited wealth should be made more explicit. The lawmakers also raised the question of whether the accountability is to FATF or to the Nepali people. 

It is said that Nepal has failed in implementation—the system for investigation, prosecution, asset seizure and prevention of money laundering is not efficient. 

A country like ours cannot remain isolated from the international economy. Similarly, foreign donors can impose more stringent conditions on aid and grants after the country is blacklisted. 

If the ordinance is brought before the next FATF plenary meeting, it will be considered a major step forward. Enacting a law will be even better.  

Otherwise, Nepal will remain a country that has failed to fulfill its commitments. Nepal must continue to implement its action plan to address these shortcomings, namely: adequately criminalizing money laundering and terrorist financing; establishing and implementing adequate procedures to identify and freeze terrorist assets; implementing adequate procedures to confiscate money related to money laundering; implementing and enforcing appropriate mutual legal assistance laws; ensuring a fully operational and effectively functioning Financial Intelligence Unit. It seems that adequate suspicious transaction reporting obligations should be established to prevent money laundering. 

Overall, the responsibility of the concerned bodies to take the necessary initiatives to protect Nepal from the gray list lies with the concerned bodies. 

If strong policies and government lobbying are required for this, initiatives should be taken at the regional and bilateral levels for liberalization in Nepal. 

Corruption, tax evasion and human trafficking are the biggest ML threats in Nepal. 

They have the greatest potential to generate income and produce negative economic and social impacts. According to the opinion of some people, there should be no provision in the current provision to allow some unaccounted assets to be made white by paying taxes on illegally acquired assets. This is also related to VDIS and ancestral property. 

Recently, the government has decided to form a seven-member task force to make the work against money laundering and terrorist financing more effective. According to the decision taken by the meeting of the Money Laundering Control Committee, the coordinator of the National Coordination Committee will be the coordinator of the task force. The task force is also expected to coordinate among agencies involved in money laundering and terrorist financing control.

Nepal, a landlocked country situated between India and China, faces unique challenges due to its geographical location and rugged topography. The nation’s landscape is characterized by three distinct regions: the high Himalayan Mountains in the north, the mid-hill regions and the southern plains (Tarai). These diverse terrains pose significant logistical challenges for domestic distribution and access to international markets. With over 80 percent of its population residing in rural areas and dependent on agriculture, Nepal’s economic growth hinges on improving infrastructure to facilitate connectivity, trade and development. 

Despite these challenges, Nepal’s strategic position as a bridge between two of the world’s largest economies offers immense potential for growth. To harness this potential, public-private partnerships (PPPs) are critical in addressing infrastructure gaps and enhancing the logistics sector. 

Below are actionable policy guidelines for establishing an effective PPP framework:

Institutional framework 

A dedicated PPP unit: The government must set up a dedicated PPP unit or agency to oversee project implementation, provide technical support and standardize logistical practices for logistics service providers. This unit will coordinate provincial and national transport initiatives to ensure harmonization and efficiency. 

Legal and regulatory environment: Introducing PPP-specific legislation is essential to define clear frameworks for contract enforcement, risk-sharing and dispute resolution. These laws will provide confidence to private investors and international donors. 

Decentralization: An empowering provincial government is key to managing localized PPP projects. Each province should focus on developing infrastructure tailored to its production centers, whether for manufacturing or agriculture. This includes establishing and investing in transport hubs, warehouses, and equipment suited to the geographical terrain, such as all-weather roads and specialized vehicles for mountain regions.

Project selection and prioritization 

Feasibility studies: Conducting rigorous feasibility studies is vital to prioritize infrastructure projects such as roads, railways, airports and multimodal connectivity. The studies should consider environmental, technical and financial aspects to ensure sustainability. Key projects should include centralized logistics hubs in major cities like Kathmandu, Birgunj, Biratnagar, Kakarvitta and Bhairahawa, with efficient links to border points for customs and warehousing. 

Alignment with national goals: PPP projects should align with national plans, such as Nepal’s five-year plans, focusing on reducing isolation of remote areas, improving trade and promoting economic growth through efficient distribution of goods and services.

Risk allocation and management 

Risk-sharing mechanisms: Clear guidelines for risk-sharing between public and private sectors are crucial, particularly given Nepal’s susceptibility to natural disasters like landslides, floods and earthquakes. 

Utilization of resources: The government should leverage public land for long-term leases and offer financial guarantees for projects that may not be immediately profitable but have high social and economic value. Blended financing models combining public, private and donor investments can provide the necessary funding and technical assistance. 

Capacity-building: Investing in capacity-building is crucial for both government officials and local communities. Train government personnel in PPP project design, negotiation and management. Provide employment and training opportunities to local populations to ensure inclusivity and skill development. Engage communities, NGOs, and private sector stakeholders in decision-making to foster trust and collaboration.

Technology and innovation 

Renewable energy solutions: Focus on small-scale hydro, solar and wind energy projects to power remote areas and reduce dependency on non-renewable resources. 

ICT and digital connectivity: Develop digital solutions to bridge connectivity gaps, such as internet access and e-commerce platforms for rural communities. 

Resilient engineering: Adopt innovative engineering solutions such as modular bridge systems and climate-resilient road designs to overcome geographic and climatic challenges.

Environmental and social sustainability

Environmental safeguards: Ensure regular environmental impact assessments (EIAs) to mitigate risks to the ecosystem during infrastructure development. 

Community benefits: Design projects to deliver tangible benefits, such as improved market access, healthcare and education for remote populations. 

Green logistics: Promote eco-friendly technologies like electric trucks, solar-powered warehouses and sustainable building materials.

Digital platforms

Develop a central digital platform for data collection, goods tracking and information sharing among stakeholders. Enable real-time updates on traffic, warehouse capacities and customs clearance to improve efficiency. Introduce e-payment systems for tolls, customs and other fees to reduce inefficiencies.

Cross-border trade facilitation

Given Nepal’s dependency on its transit neighbors, harmonizing customs procedures with India and China is critical. Collaborate on reducing delays at border points, such as Birgunj-Raxaul in the south and the Rasuwagadhi-Kerung crossing in the north.

Monitoring and evaluation

Transparent and robust monitoring mechanisms are essential for PPP success. Define key performance indicators such as reduced transport costs, increased trade volumes and time savings. Engage independent bodies for audits and evaluations. Ensure transparency through public disclosure of contracts, progress reports and financial data.

Conclusion

Nepal’s landlocked status and challenging terrain may appear to hinder its development prospects, but they also offer opportunities for innovation and collaboration. Developing a well-structured PPP framework can bridge infrastructure gaps, enhance logistics and connect Nepal’s remote regions with domestic and international markets. 

By implementing these policy guidelines, Nepal can unlock its potential as a trade hub, fostering sustainable economic growth and improving the quality of life for its citizens.

As Donald Trump prepares for his second, non-consecutive term as President of the United States, there is significant attention on how his administration’s policies will impact immigrants, Nepali Americans and the broader US-Nepal relationship. 

In this changing landscape, initiatives like the United Nepali Political Action Committee (UNPAC), AMN-USA Media and Healing Together are stepping forward to address critical needs and provide resources to underserved communities. 

So, what lies ahead for immigrants? The Trump administration’s approach to immigration has historically been restrictive, and similar policies are expected in his second term: 

Work visas and family immigration: Stricter policies on H-1B visas and family-based immigration pathways could significantly impact Nepali professionals and families. 

Refugee and asylum policies: Reduced refugee quotas may hinder opportunities for Nepali and Southeast Asian refugees seeking resettlement. 

Support for undocumented immigrants: Programs like DACA remain at risk, leaving undocumented Nepali students and workers in uncertain situations. 

Organizations like UNPAC, a non-partisan platform advocating for the Nepali diaspora, are critical in ensuring that these voices are represented in national policy-making. 

Impact on Nepali Americans: The Nepali American community is resilient, but the challenges ahead will require focused efforts in key areas: 

Representation and awareness: The newly-launched AMN-USA Media is working to connect and empower the Nepali diaspora through news, entertainment and cultural programming. By amplifying their stories and addressing their concerns, AMN-USA seeks to foster a united and informed community. 

Mental health and community services: Healing Together, an initiative founded by a disabled veteran and a Nepali American professional, provides mental health and emotional well-being services tailored to Nepali speakers and Southeast Asian communities. 

This initiative is especially critical for immigrants facing cultural transitions, trauma and stress. Healing Together aims to bridge the gap in culturally appropriate mental health services and create a safe space for those in need. 

Civic engagement: Nepali Americans are becoming increasingly involved in US politics, and through platforms like UNPAC, they can continue advocating for equitable policies that address immigration, education and economic opportunities. 

Nepal and the United States have enjoyed a strong relationship centered on economic aid, education, and cultural exchange. Under Trump’s leadership, the bilateral relationship could evolve in several ways: 

Strategic positioning: Nepal’s location between India and China makes it a valuable partner in the US’ Indo-Pacific strategy. Programs like the Millennium Challenge Corporation (MCC) Compact may see renewed focus. 

Trade and investment: Nepal could benefit from increased trade opportunities, especially in tourism and export industries, provided it navigates geopolitical challenges effectively. 

Community support abroad: US immigration policies will impact Nepalese citizens seeking education, employment or settlement. Efforts like Healing Together will play a crucial role in supporting Nepali immigrants, addressing their mental health needs and helping them integrate into US society. 

Cultural exchange and collaboration: Platforms like AMN-USA Media can strengthen cultural ties between the US and Nepal, fostering greater understanding and cooperation. 

Conclusion 

Donald Trump’s second term brings both challenges and opportunities for immigrants, Nepali Americans and Nepal. While restrictive immigration policies may pose difficulties, initiatives like UNPAC, AMN-USA Media and Healing Together provide hope, resources and a sense of unity for the community. 

Nepali Americans have the tools to rise above these challenges by engaging civically, advocating for equitable policies and supporting one another. For Nepal, this is a critical moment to strengthen ties with the US in areas like trade, mental health and strategic partnerships. Together, these efforts can create a brighter future for the Nepali diaspora and the relationship between the two nations.

In any given year, there are very few occasions to talk about volunteerism, about the “duty to serve”. These are topics that should be truly embedded in our lives and should be seen as one of the main focuses of our daily conversations.

Considering the staggering and mounting problems societies around the world are facing, it is not an exaggeration to imagine citizens to be driven by their own lives’ goals but also engaged in the pursuit of the common good.

As idyllic as it might sound, it should not be unthinkable to foster a sense of community belonging in which volunteering and serving others become a natural thing to do, a sort of duty that is not a burden but a personal relief that gives people joy and satisfaction.

Instead, there is a dearth of celebrations for a “holistic giving culture”, barring a few exceptions like the International Volunteer Day (Dec 5) and the Nelson Mandela International Day (July 18).

July 18 is another call for action to remember the contributions of Mandela, the father of modern, free and democratic South Africa often referred to as Madiba—his clan name.

There is another special occasion that is normally celebrated only in the USA on the third Monday of each January: Martin Luther King Day or MLK Day. Martin Luther King Jr was the quintessential icon of the civil rights movement, who fought against segregation and a racial system that basically was a form of apartheid. Both Madiba and Martin Luther King Jr picked tough battles against political systems at a very high personal cost.

These were against apparently insurmountable roadblocks, structures of power which, by design, were alienating and discriminating against large parts of populations living in their respective nations that, in both cases, happened to be people of color.

Madiba initially had chosen to take a violent path against the white supremacist regime of South Africa but years and years of detention made him understand that the only way forward was peace obtained through dialogue and reconciliation.

Martin Luther King Jr instead was crystal clear from the outset about the changes he and with him, many others, were envisioning for a different, more just and truly united America, could materialize only through nonviolent civil disobedience. Driven by his Christian faith, King Jr said, on 19 Aug 1967, in Atlanta, “power at its best is love implementing the demands of justice, and justice at its best is power correcting everything that stands against love.”

In one of his most important public addresses titled ‘Remaining Awake Through a Great Revolution’, delivered at Morehouse College Commencement, on 31 March 1968, King Jr shared: “It is no longer a choice, my friends, between violence and nonviolence. It is either nonviolence or nonexistence”.

“Nonviolence is the answer to the crucial political and moral questions of our time; the need for mankind to overcome oppression and violence without resorting to oppression and violence. Mankind must evolve for all human conflict a method which rejects revenge, aggression and retaliation. The foundation of such a method is love,” he said during his Nobel Peace Prize acceptance address on 10 Dec 1964, in Oslo.

King Jr knew deeply that nonviolence and peaceful resistance were the only methods which could have resulted in a better, more human nation.

Violence would have brought only more blood and with it, an unending cycle of revenges and retribution. King Jr invested in building a real organized movement because creating a more equal society was not just his job. Rather, it was a collective effort of a myriad of citizens, including numerous white Americans, who stood for justice and against bigotism, racism and hatred.

King Jr and many others, who even laid their lives for the societal changes they were envisioning, had realized that those changes could only materialize with a dedication at building people’s skills, starting with principles and values-based leadership.

There are many definitions of leadership but to me what counts the most is that leadership starts with personal endeavors, with a personal commitment at trying to be better not just for self-improvement but also for the enhancement of the society.

One of the most famous quotes of King Jr that has been one of the central messages of MLK Day since its initial nationwide observance in 1986 was: Everybody can be great because everybody can serve.

To serve others, you need to be driven by unassailable and universal principles and values and by doing something for others, you will always end up learning something, enhancing your leadership capabilities.

“You don’t have to have a college degree to serve. You don’t have to make your subject and your verb agree to serve. You only need a heart full of grace, a soul generated by love,” is another nugget of wisdom from King Jr.

It is indeed paramount to think about embedding our society with a culture of service, a culture of helping each other.

The concept of “duty to serve” could be imagined as a call for action in which people are neither compelled nor obligated to help others but make a personal choice to dedicate some of their time, skills and energies to the society.

State agencies in Nepal and elsewhere should facilitate and make it possible for citizens from all walks of lives to be involved and be engaged in public lives, driven not by a spirit of self-interest but by altruistic aims. Volunteerism, unfortunately, is too often discounted and neglected. Nepal is also a striking example and itself a contradiction.

The country has high social capital but state agencies are not doing enough to capitalize on it. By the way, what happened to the draft National Volunteering Policy that was supposed to be endorsed years ago?

With or without such a policy, it is never late to talk about volunteerism and service and it is never a lost cause to talk about ways to promote them.

MLK Day is a federal holiday in the USA; it should be embraced universally.

And let’s not forget that we cannot avoid talking about key and inalienable rights when we talk about volunteerism.

Certainly, you can also volunteer in authoritarian regimes and many of these nations do promote volunteering and yet, theirs is just a very convenient and disingenuous approach.

Because what’s the point of genuinely serving others if you do not have freedoms and your rights are not respected?

That’s what King Jr fought for, let’s not forget it.