KATHMANDU:- Nepal continues to remain on the monitoring list, or ‘grey list’, of the Financial Action Task Force (FATF) which has pointed out the need for further improvements despite ongoing reform efforts to remove Nepal from the list.
The international anti-money laundering and terrorist financing watchdog on June 19 this year decided to continue keeping Nepal in grey-list.
Although Nepal has taken some steps toward strengthening its anti-money laundering and counter-terrorist financing framework, the progresses are inadequate to meet international standards, said the FATF.
The FATF has advised Nepal to continue implementing its FATF action plan to address its strategic deficiencies and improve understanding of major risks related to money laundering and terrorist financing.
The inter-governmental body has also stressed the need for strategic reforms and stronger implementation mechanisms.
The policy-making watchdog recommended risk-based supervision and corrective measures in sectors including commercial banks, high-risk cooperatives, casinos, dealers in precious metals and stones and the real estate sector.
The FATF has suggested Nepal to strengthen efforts to identify and prevent illegal financial transactions, including hundi operations, enhance the capacity of agencies responsible for investigating money-laundering cases and improve effeteness of prosecution process.
It may be noted that Nepal was placed on the grey list in February 2025 for two years due to shortcomings in compliance with anti-money laundering laws.
It had previously exited the grey list in 2014 after implementing regulatory reforms.
Since the inclusion in the list yet again in 2025, the country has been working on a 15-point reform plan designed to strengthen its anti-money laundering system and improve financial transparency.