· Formulated by Legislative Parliament
· "high-ranking official of an international organization" refers to individuals such as directors, deputy directors, or equivalent roles, who are key in policy-making and organizational effectiveness
· ICSFT The International Convention for the Suppression of the Financing of Terrorism is a UN treaty (1999) aimed at preventing and criminalizing terrorism funding globally.
· The Tokyo Convention (1963) addresses crimes and disruptive acts on board civilian aircraft, granting jurisdiction to the state of registration and empowering aircraft commanders to ensure safety.
· The SAARC Regional Convention on Suppression of Terrorism (1987) promotes regional cooperation among SAARC nations to combat terrorism through measures like extradition and information sharing.
· BFIs should not open and transact create dummy account
· Should not open or operate SHELL bank from Nepal or it’s territory. Shell bank is a bank without a physical presence in any country, often used for illicit activities like money laundering due to lack of direct supervision.
· Non-financial professionals or businesses: Casino or Internet Casino Business/ businessman, real estate business/ man, dealing with high-net-worth items(HNI) (gold, silver, etc.), person like Notary public, auditor, accountant involved in other people’s business as stated earlier.
· Following specified non-financial professionals or businesses are not required to identify and verify the listed clients under certain circumstances.
o Casinos are not required to get information about customers involving in transactions of equal or less than Rs.2.00 lac in a day
o Entries dealing with HNI are not required to take information of the customer making transaction equal or less than Rs.10.00 lac in a day
· High Risk Customers:
o Take approval from managerial level to establish relationships with such customers or for existing customers immediately upon know
o Frequently observe their, their family members and nearer person’s transactions.
· Can obtain information about customers from third parties if BFI is third party is reliable about getting information, if all documents are readily available for BFI from third parties or if all documents are easily available upon request of BFI to third parties. But can’t rely on such parties if the customer is involved or accused in AML CFT case
- **Wire Transfers**: Must include meaningful originator information such as:
- Name, account number, transaction ID, address, birth date, birthplace, citizenship number, or customer ID number.
- Beneficiary name, account number, and/or transaction ID.
- **Enhanced Scrutiny**: Required if originator information is not provided.
- **Sender and Beneficiary Info**: The bank must ensure complete sender and beneficiary information is included before initiating a transaction and remains throughout the payment chain.
- **Business Profile Alignment**: Fund transfers should align with the customer’s business profile.
- **Batch File Transfers**: Same requirements apply for wire transfers through batch files.
- **Correspondence Banking**: The bank must comply with:
- National and international standards (e.g., FATF recommendation 16, Wolfsberg Group standards).
- Local regulations regarding correspondence banking.
- **Request for Information (RFI)**: The bank must respond promptly to RFIs from other entities and request missing information when needed.
- **Freezing Action**: The bank must prohibit transactions with designated persons/entities per UN Security Council resolutions (e.g., resolution 1267 and 1373) to prevent terrorism financing.
Not required above details for amount below Rs.75,000.00
· BFI should perform for Cross-border correspondent banking (CB)
o Get information about Respondent financial institution, it’s work. Grab public information like it’s reputation, had faced any legal penalties
o Get approval from higher authority before establishing relationship with CB
o Check if such BFI works with Shell bank and don’t allow their account to be used by shell bank
· Record of information should be kept for 5 years regarding Special transactions like high volume transaction whose economic or legal motive is not clear or with entities from countries identified as non-compliant with international anti-money laundering and terrorism financing standards are closely monitored or restricted.
· Keep records for 5 years
o Record related to customer of Beneficial owner
o accounting records and business documents of BFIs
o Documents related to transactions done within or outside of the country
o Records related to attempt of the transaction
o STR related documents
· Fine:
o Issue Written warning
o Rs.10.00 lac to Rs.5.00 Cr for Casino and BFIs seeing the impact of not following rule and for other Rs.1.00 lac to Rs.1.00 Cr
o Stop operating or cancelling the license
· If BFI is fined by regulatory body, BFI should penalize the concern staff if he/she is liable for the penalty of the institutions
· BFI can go to high court if levied penalty does not seem to be applicable within 35 days from the date of penalization.
· Suspension of employee for the period-if found guilty and is inside jail and lawsuit filed under court.
· Should self-declarefor cash or BOE carried with self at customs offices or at the courier, cargo, post office if is to dispatch from such offices for the amount excess than prescribed by NRB (equal or above USD 5000.00as per NRB FOREX Circular, check once)
· Custom officials or office personnel can open the parcel and check if found suspicious.
· While freezing the fund/ assets, assets under single or joint ownership must be frozen, if related to organization, organizations assets/ fund too
· Information to regulatory body (RB)is must within 3 days after freezing such assets/ fund and RB to ministry of finance within the next 3 days
· Fine by Finance ministry to Individual or corporate house is upto Rs.10.00 lac
· If assets/ fund found not to be freeze for people involve in AML CFT, person is treated as he/she is also involved in such case and penalized accordingly
· Person funding in AML related crime, individuals shall be fined double the amount of the loss incurred (बिगो) and jail from 2 years to 10 years
· individuals involved in conspiracy in the case related to AML (षडयन्त्र गर्ने व्यक्तिलाइ) will face half of the total penalties
· A person directly involved in CFT related crime, individual shall be fined five times the amount of the loss incurred (बिगो) {if loss amount is determined - विगो खुलेको} and if loss is not determined fine upto Rs.1.00 Cr. and jail from 3- 20 years
· If Nepal Govt. staff or BFIs staff involved in financing AML CFT related task, fine is same as above 3 points plus 10% extra additional
· If anyone leaked information related to AML CFT case, jail up to 1-3 months or fine up to Rs.1.00 lac or both
· If anyone tries to destroy information related to AML CFT crime, jail up to 1-3 months or fine up to Rs.0.50 - 1.00 lac or both. And helper in such an act will be punished for half.
· If anyone tries to create hurdle (बाधा विरोध) in AML CFT crime, jail up to 6 months or fine up to Rs.5,000.00 or both based on the investigation officer's report.
· If someone files a false complaint with intent to harm or inconvenience without valid reason, they may be fined up to Rs.10,000.00 based on the investigation officer's report.
· Informants who report offenses related to money laundering or terrorist financing and assist in investigations will receive a reward of 10% of the proven loss amount or up to ten lakh rupees, whichever is lower. If more people equally divided the before stated amount.
Link to ACT : Money Laundering Prevention Act 2064 from NRB
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