22/02/2025
🚨 Nepal Grey Listed by FATF 🚨
On February 21, 2025, Nepal was once again placed on the Financial Action Task Force (FATF) grey list, signalling ongoing challenges in the country's fight against money laundering and terrorism financing.
Historical Context: Nepal’s journey with the FATF has been a complex one. Initially grey-listed in 2008 due to weaknesses in its Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) systems, the country worked hard to implement reforms, including stronger laws and better enforcement mechanisms. This commitment to change resulted in Nepal being removed from the grey list in 2014.
Challenges Faced in 2023 and 2025: Despite earlier progress, ongoing concerns around enforcement and regulatory systems led to renewed scrutiny. In 2023, reports indicated that Nepal risked grey listing again. By February 2025, the FATF placed Nepal back on the list due to insufficient progress in addressing critical AML/CFT issues.
What This Means: Being placed on the FATF grey list has serious implications:
📉 Economic Impact: Potential reduction in foreign investments, higher borrowing costs, and disruptions in financial transactions.
⚖️ Increased Compliance Burden: Financial institutions face higher costs to comply with global standards.
🌍 International Reputation: The grey listing brings international scrutiny, affecting Nepal's financial standing.
Looking Ahead: To remove itself from the grey list, Nepal must:
1. Strengthen its legal frameworks and enforcement mechanisms.
2. Improve international cooperation on financial crime prevention.
3. Take concrete steps to address FATF's concerns and demonstrate its commitment to global standards.
The road ahead for Nepal will require significant effort, but with continued reform and international collaboration, the country can work toward regaining its position on the global financial stage.
