KATHMANDU: The government has formulated a five-year national strategy and action plan to prevent financial investment in money laundering and terrorist activities.

This new action plan aims to enhance preventive and regulatory measures in sectors such as banking, cooperatives, securities, real estate, precious metals, and casinos. These areas are considered high-risk for serious financial crimes and money laundering.

Studies and assessments related to money laundering, terrorist financing, and the manufacture or expansion of weapons of mass destruction indicate that the legal and institutional structures need significant improvements. The findings suggest that risk-based regulation, supervision, investigation, prosecution, and confiscation measures should be tightened.

According to the action plan, a risk-based regulation, supervision, and prompt corrective action system will be developed. The action plan has accorded high priority to key institutions in banking, remittances, securities, cooperatives, real estate, casinos, and precious metals. The regulatory body will be responsible for implementing these measures. The central bank will adopt preventive measures for new trends in financial transactions and crimes, including cash transactions, foreign currency transactions, hundi, casinos, real estate, illegal trade of precious metals, involvement of high-ranking individuals, cross-border transactions, business-based money laundering, and virtual assets.

The action plan will be implemented from the new fiscal year starting from July 16 and aims to control and investigate criminal activities that misuse legal provisions, conceal real wealth, and involve multiple countries. A registry will be established to reveal the identity of the true owners. Standards for declaring or identifying the real wealth of individuals or firms legally will be prepared by the Ministry of Industry, Commerce, and Supplies by mid-April.

Relevant agencies and organizations will be given access to the real wealth register by July 2025. The company registrar's office will establish an electronic register of real wealth by July 2027. Additionally, standards for preventing, controlling, confiscating, and recovering criminal assets will be created and implemented by July 2025.

Organisations related to the financial sector will develop detailed procedures to identify the real owners based on capital, turnover, and risk.

The action plan, approved by the cabinet meeting on July 1, includes several coordination mechanisms. A sectoral coordination mechanism will operate under the coordination of the governor, an investigation coordination mechanism under the deputy attorney general, a counter-terrorism mechanism under the home secretary, and an implementation coordination and facilitation committee under the joint secretary of the Office of the Prime Minister and Council of Ministers.

These mechanisms will determine the regulatory approach to prevent money laundering, terrorism, and financial investment in weapons of mass destruction based on risk. They will also coordinate and facilitate the implementation of national policies, strategies, and laws, ensuring resources, manpower arrangements, and functional autonomy of the financial information unit. Furthermore, they will enhance the efficiency of the regulatory body, improve coordination and cooperation at the implementation level, issue necessary guidance, evaluate performance, and submit an annual report to the directorate committee.