A committee of the Nepalese parliament has cleared anti-money laundering legislation that the country needs to enact within the next three weeks.

If this and two other new laws are not endorsed by parliament in that time, Nepalese letters of credit (L/Cs) may become unacceptable across the globe.

Money laundering

Nepal is responding to the threat of a global warrant from the Financial Action Task Force (FATF) on money laundering.

The new anti-money laundering legislation is one of three new pieces of legislation that the Nepalese parliament must enact within the next few weeks.

More legislation

The two other acts relate to mutual legal assistance with other countries and extradition arrangements.

Nepal also has to sign up to two UN conventions - one on terrorist financing and the other on organised crime - if it is to fend off action by FATF.

Consequences

If the global anti-money laundering watchdog issues a global warrant against Nepal, then L/Cs issued by the country's banks could become unacceptable in global banking circles.

A FATF warrant could also stop the flow of money transfers to and from Nepal.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.