FATF Places Nepal on Grey List Again Over AML/CFT Deficiencies

The Financial Action Task Force (FATF) has once again placed Nepal on its grey list due to strategic deficiencies in its anti-money laundering (AML) and countering the financing of terrorism (CFT) measures. The decision was announced during the FATF Plenary and Working Group Meetings in Paris on February 21. Nepal joins Laos on the grey list, while the Philippines has been removed, bringing the total number of countries under increased monitoring to 25. Nepal was previously greylisted from 2008 to 2014 but was removed after implementing legal and institutional reforms. The grey list, officially termed “Jurisdictions under Increased Monitoring,” includes countries working with FATF to address deficiencies in their AML/CFT frameworks. While Nepal has made legislative improvements, enforcement gaps remain a concern. Finance Minister Bishnu Paudel stated that Nepal is committed to addressing these issues and aims to exit the grey list ahead of schedule. FATF’s assessment highlights the need for Nepal to strengthen financial oversight, enhance investigations, and improve regulatory enforcement. Experts warn that greylisting could impact Nepal’s international financial transactions, making it harder to secure loans and investments. Despite these challenges, Nepal Rastra Bank Governor Maha Prasad Adhikari remains optimistic, citing ongoing reforms as a pathway to eventual removal from the grey list.